M/s.MIR Holistics (P) . Ltd, Cochin V. The ADCIT(TDS), Cochin

ITA 59/COCH/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8571 (ITAT-COCHIN)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 12-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 08-02-2016
• Court: TRIBUNAL
• Department Lawyers: K P GOPAKUMAR
• Assessee Lawyers: ABRAHAM JACOB
• Keywords: Question of law; Non-deduction of tax; Reasonable cause
• Section: 273B; 201(1)

Judgement Text

ITA NO.59/COCH/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE.K, JM ITA NO.59/COCH/2016 (ASST YEAR :2010-11 ) M/S. MIR HOLISTICS (P) LTD., MM BUILDING,KALABHAVAN ROAD, ERNAKULAM NORTH, PIN-682 018. THE ADDL. COMMISSIONER OF INCOME-TAX(TDS), KOCHI. ( ASSESSEE APPELLANT) VS (REVENUE -RESPONDENT) PAN NO. ASSESSEE BY SHRI ABRAHAM JACOB, CA REVENUE BY SHRI K P GOPAKUMAR, SR DR DATE OF HEARING 12/05/2016 DATE OF PRONOUNCEMENT 20 /05/2016 ORDER PER B.P. JAIN, AM: THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE LD. CIT(A)-III, KOCHI DATED 30/11/2015 FOR THE ASSESSMENT YEAR 2010-11 . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE HON. COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIED IN SUSTAINING THE PENALTY LEVIED BY THE ASSESSING AUTHORITY. 2. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN DENYI NG THE FACTS AND CIRCUMSTANCES OF THE CASE WHICH WAS CLEARLY EXPLAIN ED BY YOUR APPELLANT. 3. THE LEARNED CIT HAS CONVENIENTLY OVERLOOKED THE GENUINE REASONS WHICH PREVENTED YOUR APPELLANT FROM PAYING THE TDS ON TIM E. ITA NO.59/COCH/2016 2 . 4. IT IS SUBMITTED THAT THERE IS NO DELIBERATE IN TENT TO EVADE PAYING OF TDS AND THE SAME WAS PAID ALONG WITH INTEREST BY YOUR A PPELLANT. THIS FACT THE AUTHORITIES BELOW SHOULD HAVE BEEN CONSIDERED JUDIC IALLY. 5. THE FINDING OF THE ASSESSING OFFICER THAT THE T DS HAVE BEEN USED FOR BUSINESS IS AN IN CORRECT AND IRRELEVANT OBSERVATI ON. THE DELAY IN PAYMENT OF TDS DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE YOUR APPELLANT. 6. THE AUTHORITIES BELOW IS NOT JUSTIFIED IN NOT CO NSIDERING THE VARIOUS DECISIONS OF HONOURABLE COURTS MENTIONED BY YOUR APPELLANT. 7. THE LEARNED CIT IS ERRED IN SUSTAINING THE PENALTY LEVIED BY THE ASSESSING AUTHORITY. IN VIEW OF THE ABOVE AND ANY OTHER GROUND URGED AT THE TIME OF HEARING IT IS PRAYED THAT THE PENALTY LEVIED U/S. 271C MAY BE QUA SHED. 3. THE ASSESSEE IN THE PRESENT CASE HAS BELATEDLY DEP OSITED THE TAX DEDUCTED AT SOURCE TO THE CENTRAL GOVERNMENT ACCOUNT AND ACC ORDINGLY, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AND LEVIED PE NALTY OF RS.16,16,000/- U/S. 271C OF THE ACT. IT WAS CONFIRMED BY THE LD. CIT( A). 4. THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF M/S. MIR REALTORS PVT. LTD. IN I.T.A. NO. 58/COCH/2015 D ECIDED BY US FOR THE ASSESSMENT YEAR 2010-11 ON EVEN DATE AND THEREFORE, OUR ORDER THEREIN IS IDENTICALLY APPLICABLE TO THE FACTS OF THE PRESENT CASE, EXCEPT THAT THE AMOUNT OF THE PENALTY SHALL BE SUBSTITUTED AT RS.16,16,000 /-. FOR THE SAKE OF ITA NO.59/COCH/2016 3 CONVENIENCE, WE REPRODUCE HEREINBELOW OUR ORDER IN THE CASE OF MIR REALTORS (P)LTD. IN I.T.A. NO.58/COCH/2016. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE FACTS OF THE CASE. BEFORE THE ASSESSING OFFICER VIDE LETTER DATED 18/0 7/2013 AND BEFORE THE LD. CIT(A) VIDE LETTER DATED 17/11/2015, IT WAS EXPLAIN ED THAT DUE TO THE GLOBAL FINANCIAL MELTDOWN AND CONSEQUENT REDUCTION IN SALE S THE ASSESSEE WAS FACING SEVERE FINANCIAL CRISIS. AS A RESULT, SALAR Y COULD NOT BE PAID IN TIME AND MANY OF THE STAFF LEFT THE SERVICE AND AS A RESULT PROPER RECORD AND DETAILS COULD NOT BE MAINTAINED FOR FEW MONTHS WHICH RESULT ED IN DELAY IN REMITTING THE TDS AND FILING OF THE RETURNS. IT WAS ONLY DURI NG THE AUDIT AND FINALIZATION OF THE ACCOUNTS THAT THEIR AUDITOR POINTED OUT THESE F ACTS THAT TAX COULD NOT BE REMITTED IN THE PRESCRIBED TIME AND AS SOON AS THE AUDITOR POINTED OUT THE MISTAKE, IT WAS DEPOSITED. 6. IT WAS ARGUED THAT THE ASSESSEES BUSINESS IS MAINLY IN THE AREA OF REAL ESTATE DEVELOPMENT AND THE ASSESSEE HAS BEEN FACING LOT OF ISSUES DUE TO THE UNFAVOURABLE MARKET CONDITIONS AND COST INCREASE. THE COMPANY IS SUFFERING CONTINUOUS LOSSES DUE TO THE ADVERSE BUSINESS CONDI TIONS AND ACUTE COMPETITION FROM SIMILAR PLAYERS IN THE INDUSTRY. THE MAJOR PORTION OF INTEREST BEARING FUND OF THE COMPANY IS BLOCKED IN THE UNFIN ISHED RESIDENTIAL PROPERTY (WORK IN PROGRESS). DUE TO THE CONTINUOUS LOSSES A ND ACUTE FINANCIAL CRISIS, THE STAFF MEMBERS INCLUDING THE PERSONS RESPONSIBLE FOR MAINTAINING ACCOUNTS AND FILING OF TAX RETURNS LEFT THE SERVICE OF THE COMPA NY. THE MANAGEMENT OF THE COMPANY WAS IN DARK FOR FEW MONTHS WITHOUT KNOWING THE STATUS OF STATUTORY COMPLIANCES WITH REGARD TO PAYMENT OF TDS AND FILIN G OF TDS STATEMENTS ETC. AS THE PERSON RESPONSIBLE FOR STATUTORY COMPLIANCES LEFT THE SERVICE OF THE COMPANY. DURING THE COURSE OF AUDIT, THE AUDITORS POINTED OUT THAT TAX DEDUCTED AT SOURCE (TDS) FOR THE FIRST 3 QUARTERS O F THE FINANCIAL YEAR 2009-10 WERE NOT DEPOSITED. THEY ADVISED THAT THE PAYMENT OF TDS SHOULD BE MADE IMMEDIATELY ALONG WITH APPLICABLE INTEREST AND CORR ESPONDING TDS STATEMENT SHOULD ALSO BE FILED. 7. IT WAS ARGUED BY THE LD. COUNSEL FOR THE ASSES SEE THAT AS PER THE AUDITED FINANCIAL STATEMENTS FOR THE YEAR 2009-10, THERE WA S AN ACCUMULATED LOSS OF RS.118.74 LAKHS AS AGAINST THE PAID UP CAPITAL OF R S.75 LAKHS AND THE NET WEALTH OF THE COMPANY WAS (-) RS.43.74 AND THE NET CURRENT ASSETS WAS (-) RS.44.96 LAKHS AS UNDER: ITA NO.59/COCH/2016 4 RS. TOTAL CURRENT ASSETS : 2794. 56 LAKHS LESS TOTAL CURRENT LIABILITIES : 2839.52 LAKHS NET CURRENT ASSETS : (-)44.96 LAKHS COPY OF THE ANNUAL REPORT INCLUDING AUDITED FINANCI AL STATEMENTS FOR THE IMPUGNED YEAR ARE PLACED ON RECORD AT PB PG. NOS. 1 1-33. IN THE ABOVE SITUATION, THERE WAS NO POSITIVE CURRENT RATIO IN T HE COMPANY, WHEREAS THE CURRENT RATIO FOR REASONABLE WORKING CAPITAL POSITI ON SHOULD BE ATLEAST 1.33 WHICH IS A MATTER OF ACCEPTED BUSINESS PRACTICE. TH E ASSESSEE HAD CURRENT LIABILITIES WHICH WERE MUCH HIGHER THAN THE CURRENT ASSETS AND THE ASSESSEE HAD TO BORROW FUNDS EVEN TO PAY SALARY TO THE STAFF . DURING THE IMPUGNED YEAR, THE ASSESSEE WAS FACING ACUTE FINANCIAL CRISI S AND UNABLE TO PAY THE SALARY TO THE STAFF AND ALSO TO MEET THE OTHER WORK ING CAPITAL NEEDS. THIS IS ONE OF THE MAJOR REASONS FOR THE RESIGNATION OF SEVERA L STAFF FROM THE COMPANY INCLUDING THE ACCOUNTANTS AND PERSON RESPONSIBLE FO R STATUTORY COMPLIANCES OF MAKING TDS PAYMENTS AND FILING OF TDS STATEMENTS/RE TURNS. 8. THE MANAGEMENT OF THE COMPANY AFTER THE ADVISE OF THE AUDITORS, IMMEDIATELY TOOK URGENT STEPS TO REMIT THE TDS AMOU NT AND TO FILE RETURNS WHICH WERE ARRANGED WITH GREAT DIFFICULTY AND THE E NTIRE TDS DUES WITH APPLICABLE INTEREST FOR THE 3 QUARTERS AMOUNTING TO RS.13,86,718/- WAS PAID VOLUNTARILY WITHOUT RECEIVING ANY NOTICE FROM INCOM E TAX DEPARTMENT OR LEVY OF ANY PENALTY. THE PAYMENT OF TDS AND INTEREST DUE T HEREON WAS MADE IN THE LAST QUARTER WHICH WAS WELL WITHIN THE FINANCIAL YE AR ITSELF. THE DELAY IN PAYMENT OF TDS IS VERY NOMINAL, ON AN AVERAGE OF J UST 5 MONTHS. EVEN THIS NOMINAL DELAY IS DIMINISHING MONTH AFTER MONTH AND FOR THE THIRD QUARTER, PRACTICALLY THERE WAS NO DELAY AND THE PAYMENT HAS BEEN MADE SUO MOTO BY THE ASSESSEE. THE DELAY OCCURRED DUE TO THE CIRCUM STANCES BEYOND THE CONTROL OF THE ASSESSEE. IT WAS ALSO ARGUED THAT TH ERE WAS NO DISALLOWANCE OF ANY EXPENDITURE U/S. 40(A)(IA) EVEN IF THE PAYMENT OF TDS IS DELAYED . IN OUR VIEW, THE CIRCUMSTANCES AS DISCUSSED HEREINABOVE, C ONSTITUTE GOOD AND SUFFICIENT REASONABLE CAUSE FOR THE SHORT DELAY IN REMITTING THE TDS TO THE CREDIT OF CENTRAL GOVERNMENT. 9. THE ASSESSING OFFICER HAS RELIED UPON THE DECI SION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF M/S. US TECHNOLOGIES INTE RNATIONAL PRIVATE LTD. VS. CIT (2010) 195 TAXMAN 323 PB PG. NOS. 35-37WHEREIN IT W AS HELD AS UNDER: ITA NO.59/COCH/2016 5 WE ARE UNABLE TO ACCEPT THIS CONTENTION BECAUSE TH E FIRST PART OF CLAUSE(B) OF SECTION 271C(1), I.E., FAILURE TO PAY WHOLE OR A NY PART OF TAX AS REQUIRED TAKES IN THE TAX DEDUCTED UNDER CLAUSE (A) UNDER AN Y OF THE PROVISIONS OF CHAPTER XVII-B. SO MUCH SO IN OUR VIEW, FAILURE TO DEDUCT OR FAILURE TO REMIT RECOVERED TAX, BOTH WILL ATTRACT PENALTY U/S. 271C OF THE ACT. SO MUCH SO THE CONTENTION OF THE APPELLANT FAILS AND WE UPHOLD THE FINDING OF THE TRIBUNAL, DISMISSING THE CHALLENGE AGAINST LEVY OF PENALTY. HOWEVER IN PARA 4 OF THE ABOVE JUDGMENT, IT HAS BEE N UPHELD BY THE HONBLE HIGH COURT OF KERALA AS UNDER: WE FEEL RECOVERY AND REMITTANCE OF TAX, THOUGH WIT H DELAY BUT WITH INTEREST BEFORE DETECTION IS CERTAINLY A MITIGATING CIRCUMST ANCE FOR WAIVER OR REDUCTION OF PENALTY. FURTHER, IF FULL AMOUNT OF T AX WITH INTEREST WAS PAID BEFORE LEVY OF PENALTY, WE FEEL QUANTUM REDUCTION I S CALLED FOR BY THE ASSESSING OFFICER. THEREFORE, WE DIRECT THE ASSESS ING OFFICER TO RECONSIDER THE QUANTUM OF PENALTY BY GIVING ONE MORE OPPORTUNITY T O THE ASSESSEE TO FURNISH FACTS IN THE LIGHT OF OUR OBSERVATIONS ABOVE. THE APPEAL IS ACCORDINGLY, DISPOSED OF UPHOLDING THE ORDER OF THE TRIBUNAL ON THE LEVY OF PENALTY, BUT WITH DIRECTION TO THE ASSESSING OFFICER TO GRANT FU RTHER REDUCTION IN PENALTY, IF ANY, NEW FACT OR CIRCUMSTANCE IS BROUGHT TO THE NOT ICE OF THE ASSESSING OFFICER BASED ON OBSERVATIONS ABOVE OR OTHERWISE IN TERMS OF SECTION 273B OF THE ACT. 10. IT WAS ALLEGED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS RETAINED THE TAX DEDUCTED AT SOURCE DURING THE YEAR AND HAS UTIL IZED THE SAME FOR THEIR BUSINESS PURPOSES. IT WAS EXPLAINED AND ARGUED BY THE LD. AR THAT IT IS NOT THE CASE THAT THE APPELLANT HAD RECEIVED MONEY BY WAY O F TDS FROM THE EMPLOYEES AND RETAINED THE MONEY WITH ITSELF BY NOT PAYING THE TDS TO THE CREDIT OF CENTRAL GOVERNMENT WITHIN THE PRESCRIBED TIME. AS A MATTER OF FACT, THE ASSESSEE HAD RAISED LOANS FOR MAKING THE PAYMEN T TO THE EMPLOYEES IN THE FORM OF SALARY AND THE ASSESSEES LIABILITIES WERE MUCH MORE THAN THE ASSETS AND SHOWING NEGATIVE RESULTS AS DISCUSSED HEREINABOVE. THEREFORE, THERE APPEARS TO BE NO UTILIZATION OF THE FUNDS FOR THE BUSINESS PUR POSES. THE ASSESSEE HAS MENTIONED THAT THE ASSESSEE HAS EXTENDED FULL CO-OP ERATION TO THE DEPARTMENT AND HAS APPEARED ALL THE TIME AND HAS RESPONDED TO ALL THE NOTICES ISSUED BY THE DEPARTMENT. IT WAS ALSO EXPLAINED THAT TDS OF THREE QUARTERS WHICH ARE IN DISPUTE WERE DEPOSITED WITH INTEREST AND THE CONNEC TED RETURNS WERE FILED IN ITA NO.59/COCH/2016 6 MARCH, 2010 WHEREAS NOTICE U/S. 274 R.W.S. 271C WAS ISSUED AFTER A LONG GAP OF OVER THREE YEARS AS ON 22-05-2013. 11. IT WAS ALSO SUBMITTED THAT THE DEPARTMENT HA D NOT PASSED AN ORDER U/S. 201(1) R.W.S. 221 OF THE ACT HOLDING THE ASSESSEE I N DEFAULT. HAD THERE BEEN NO GOOD AND SUFFICIENT REASONS FOR DELAYED PAYMENT OF TDS, THE REVENUE WOULD HAVE TREATED THE ASSESSEE COMPANY AS ASSESSEE IN D EFAULT AND LEVIED PENALTY U/S. 221OF THE ACT. 12. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. MITSUI & CO. LTD., 140 TAXMAN 430 (PB PG. NO. 39) REFERRED TO PARA 5 WHERE THE TRIBUNAL HELD AS UNDER: IN THE PRESENT CASE ADMITTEDLY, THE DEPARTMENT HAS NEITHER TREATED THE ASSESSEE COMPANY IN DEFAULT U/S. 201(1) NOR IT LEVI ED ANY PENALTY FOR NON- DEDUCTION AND PAYMENT OF TAX UNDER PROVISO TO SECTI ON 201(1) READ WITH SECTION 221 OF THE INCOME TAX ACT. THE ASSESSEE CO MPANY ALSO PAID INTEREST SUO MOTO AS REQUIRED U/S. 201(1A) FOR THE DELAYED P AYMENT. IT IS, THEREFORE, INFERRED THAT THERE EXISTED GOOD AND SUFFICIENT REA SONS FOR NON-DEDUCTION OF TAX AT SOURCE FROM THE SAID AMOUNT IN JAPAN. HAD T HERE BEEN NO GOOD AND SUFFICIENT REASONS FOR NON-DEDUCTION OF SUCH TAX AN D PAYMENT THEREOF, THE REVENUE WOULD HAVE TREATED THE ASSESSEE COMPANY IN DEFAULT AND LEVIED PENALTY U/S. 221 OF THE INCOME TAX ACT. MOREOVER, THE PAYMENT OF THE AMOUNT OF SHORT TAX DEDUCTION AND INTEREST THEREON WAS A M ITIGATING FACTOR FOR NOT TAKING ACTION U/S. 221. WHEN NO ACTION HAS BEEN TAK EN BY THE REVENUE FOR LEVY OF PENALTY U/S. 221 AND DELAY IN PAYMENT OF TA X HAS BEEN FULLY COMPENSATED BY PAYMENT OF INTEREST NO FURTHER ACTIO N IS JUSTIFIED U/S. 271C OF THE INCOME-TAX ACT, LOOKING TO THE RATIO OF THE AFO RE-CITED DECISION OF THE HONBLE JURISDICTIONAL DELHI HIGH COURT. 13. . THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS . MITSUI & CO. LTD., 140 TAXMAN 430 VIDE PARA 10 OF ITS ORDER AT PB PG. 40 FURTHER HAS HELD AS UNDER: THE ARGUMENTS WITH REGARD TO RETENTION HAS BEEN CO NSIDERED BY THE TRIBUNAL IN DETAIL AND SUPPORTED BY THE DECISION OF THE GUJA RAT HIGH COURT IN CASE OF CIT VS. S.G. PGNATALE (1980) 124 ITR 391. THE TRI BUNAL HAS , IN GREAT DETAIL, EXAMINED THE FACTS AND ALL THE MATERIAL ON RECORD A ND HAS ARRIVED AT A CONCLUSION. IT IS NOT POSSIBLE FOR US TO SAY THAT THE FINDING RECORDED BY THE ITA NO.59/COCH/2016 7 TRIBUNAL IS PERVERSE. THEREFORE, THE APPEAL IS DIS POSED OF AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. 14. THE ITAT, BANGALORE BENCH B IN THE CASE OF INDO NISSIN FOODS LTD. VS. JOINT COMMISSIONER OF INCOME-TAX, 3 SOT 495 WHERE THE CON TENTION RAISED WAS THAT NO ORDER HAS BEEN PASSED AGAINST THE ASSESSEE-COMPANY OR NISSIN ON THE LIABILITY UNDER THE ACT IN AS MUCH AS THE ASSESSEE COMPANY HA D NEVER BEEN HELD TO BE AN ASSESSEE IN DEFAULT U/S. 201 OR SECTION 221 OF THE ACT. SECTION 201(1) PRESCRIBES LIABILITY FOR FAILURE TO DEDUCT TAX AND DECLARES THE ASSESSEE IN DEFAULT IN CASES WHERE GOOD AND SUFFICIENT REASON IS FOUND TO EXIST, THE ACTION UNDER THESE SECTIONS IS MITIGATED. ULTIMATELY, THE ITAT, BANGALORE BENCH IN THE CASE OF INDO NISSIN FOODS LTD. VS. JOINT COMMISSIONER OF IN COME-TAX, 3 SOT 495 VIDE PARA 24 AT PB PG. NO.48 HELD AS UNDER: 24. ON THE ISSUE OF NOT PASSING ORDER U/S. 201(1) BEFORE INITIATION OF PROCEEDINGS U/S. 271C, WE ARE INCLINED TO AGREE WIT H THE ASSESSEES CONTENTION AND RELY ON THE DECISION OF THE TRIBUNAL DELHI C BENCH IN MARUBERI CORPN. (LIAISON OFFICE) VS. JOINT CIT (2002) 83 ITD 577 (DEL.) AND THE DECISION OF TRIBUNAL BANGALORE BENCH IN I.T.A. NOS. 137 TO 140/ BANG/2002. ON THIS GROUND ALSO, THE ORDER OF PENALTY STANDS VACATED. SIIMILAR VIEWS WERE TAKEN BY THE ITAT, DELHI BENCH IN THE CASE OF SAHARA INDIA FINANCIAL CORPORATION LTD. VS. ADDL. COMMISSIONER O F INCOME-TAX, (2009) 30 SOT 149 (DELHI). 15. . IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND OUR F INDINGS HEREINABOVE, WE FIND THAT THERE IS A REASONABLE CAU SE ESTABLISHED BY THE ASSESSEE FOR REMITTING THE TDS BELATEDLY TO THE CRE DIT OF THE CENTRAL GOVERNMENT ACCOUNT AND THEREFORE, WE DIRECT THE ASSESSING OFFI CER TO CANCEL THE PENALTY LEVIED U/S. 271C OF THE ACT. OUR VIEW IS SUPPORTED BY THE DECISION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. BANK OF NOVA SCOTIA (2016) 66 TAXMANN.COM 175 AT PB PG. NOS. 52&53 REPRODUCED HER EINBELOW: KURIAN JOSEPH, J. THE SHORT ISSUE PERTAINS TO T HE ASSESSMENT OF PENALTY U/S. 271-C OF THE INCOME TAX ACT, 1961. AGAINST THE ORD ER OF ASSESSING OFFICER, THE RESPONDENT TOOK UP THE MATTER IN APPEAL AND THE COM MISSIONER OF INCOME TAX (APPEALS) DELETED THE LEVY OF PENALTY. ITA NO.59/COCH/2016 8 2. THE MATTER WAS PURSUED BY THE REVENUE BEFORE THE INCOME TAX APPELLATE TRIBUNAL. THE INCOME TAX APPELLATE TRIBUNAL VIDE OR DER DATED 31.03.2006 ENTERED THE FOLLOWING FINDINGS: 1.1. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMIS SIONS. IN THE INSTANT CASE WE ARE NOT DEALING WITH COLLECTION OF TAX U/S. 201(1) OR COMPENSATORY INTEREST U/S. 201(1A). THE CASE OF THE ASSESSEE IS THAT THESE AM OUNTS HAVE ALREADY BEEN PAID SO AS TO END DISPUTE WITH REVENUE. IN THE PRE SENT APPEALS WE ARE CONCERNED WITH LEVY OF PENALTY U/S. 271-C FOR WHICH IT IS NECESSARY TO ESTABLISH THAT THERE WAS CONTUMACIOUS CONDUCT ON THE PART OF THE ASSESSEE. WE FIND THAT ON SIMILAR FACTS HONBLE DELHI HIGH COURT HAVE DELETED LEVY OF PENALTY U/S. 271C IN THE CASE OF CIT VS. MITSUI & COMPANY LTD. 2 72 ITR 545 . RESPECTFULLY, FOLLOWING THE AFORESAID JUDGMENTS OF HONBLE DELHI HIGH COURT AND THE DECISION OF THE ITAT, DELHI IN THE CASE OF TELEVISI ON EIGHTEEN INDIA LTD.,WE ALLOW THE ASSESSEES APPEAL AND CANCEL THE PENALTY AS LEV IED U/S. 271-C. 3. BEING AGGRIEVED, THE REVENUE TOOK UP THE MATTER BEFORE THE HIGH COURT OF DELHI AGAINST THE ORDER OF THE INCOME TAX APELLATE TRIBUNAL. THE HIGH COURT REJECTED THE APPEAL ONLY ON THE GROUND THAT NO SUBS TANTIAL QUESTION OF LAW ARISES IN THE MATTER. 4. ON FACTS, WE ARE CONVINCED THAT THERE IS NO SUBS TANTIAL QUESTION OF LAW, THE FACTS AND LAW HAVING PROPERLY AND CORRECTLY BEEN AS SESSED AND APPROACHED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS BY THE INCOME TAX APPELLATE TRIBUNAL. THUS, WE SEE NO MERITS IN THE APPEAL AND IT IS ACCORDINGLY DISMISSED. 16. IN THE CIRCUMSTANCES AND FACTS OF THE CASE, AL L THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED AND WE DIRECT THE ASSESSING OF FICER TO CANCEL THE PENALTY LEVIED U/S. 271C OF THE ACT. 17. THE APPEAL OF THE ASSESSEE IN I.T.A. NO. 58/ COCH/2016 IS ALLOWED. ITA NO.59/COCH/2016 9 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN I.T.A . NO. 59/COCH/2016 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-05- 2016. SD/- SD/ - (GEORGE GEORGE K.) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : COCHIN DATED: 20/ 05/2016 GJ COPY TO: 1. M/S. MIR HOLISTICS (P) LTD., MM BUILDING,KALABH AVAN ROAD, ERNAKULAM NORTH, PIN-682 018. 2. THE ADDL. COMMISSIONER OF INCOME-TAX (TDS), KOC HI. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-III, KOC HI. 4. THE COMMISSIONER OF INCOME-TAX, 5. THE DR/ITAT, COCHIN BENCH. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN ITA NO.59/COCH/2016 10 1.DATE OF DICTATION : 19/05/2016 2.DATE ON WHICH THE TYPED DRAFT IS PLACED 20/05/2016 BEFORE THE DICTATING MEMBER OTHER MEMBER: 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR . PS/PS: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER : 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. PS/PS : 6. DATE ON WHICH THE FILE GOES TO BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO HEAD CLERK: 8. DATE ON WHICH THE FILE GOES TO ASSISTANT REGISTR AR 9. DATE OF DISPATCH OF THE ORDER: