Punjab Infrastructure Development Board, Chandigarh V. Commissioner of Income Tax (TDS), Chandigarh

ITA/408/2019

AI Insights

The case involves multiple appeals by the Punjab Infrastructure Development Board against the orders of the Income Tax Appellate Tribunal, which had upheld penalties for non-collection of Tax at Source (TCS) under Section 206C of the Income Tax Act. The primary legal contention was whether the Board, acting as a nodal agency and not a tax collector, was liable to collect TCS on toll fees. The Tribunal's earlier decisions had relied on the premise that the Board was responsible for collecting and depositing TCS, which the Board contested, arguing that it acted merely as a facilitator and not as a tax collector. The High Court, after reviewing the submissions and the nature of the agreements between the Government of Punjab and the Concessionaire, sided with the Board, leading to the setting aside of the penalties.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 685435 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 20-11-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax, New Delhi vs Eli Lilly and Company (India) Private Limited
• Laws Referred To: Income Tax Act, 1961, Punjab Infrastructure Development & Regulation Act, 2002
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AMANPREET SINGH
• Assessee Lawyers: DEEPAK AGGARWAL
• Keywords: Infrastructure development; Interest; Penalty; Tax Collection at Source
• Section: 260A; 206C(7); 271CA

Judgement Text

" ITA No. 408 of 2019 IN THE HIGH COURT OF PUNJAB AND HARYANA AT 1. ITA No. 4 Punjab Infrastructure Development Board, Chandigarh Commissioner of Income Tax (TDS), Chandigarh 2. ITA No. 410 of 2019 (O&M) Punjab Infrastructure Development Board, Chandigarh … Appellant Commissioner of Income Tax (TDS), Chandigarh 3. ITA No. Punjab Infrastructure Development Board, Chandigarh … Appellant Commissioner of Income Tax (TDS), Chandigarh 4. ITA No. 412 of 2019 (O&M) Punjab Infrastructure Development Board, Chandigarh … Ap Commissioner of Income Tax (TDS), Chandigarh CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE Present: SANJEEV PRAKASH SHARMA, J. adjudication. statutory body enact Development & Regulation Act, 2002. These appeals under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’), have been filed by the appellant against the order passed by the Income Tax Appellate ITA No. 408 of 2019 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Pronouncement : 20 ITA No. 408 of 2019 (O&M) unjab Infrastructure Development Board, Chandigarh versus Commissioner of Income Tax (TDS), Chandigarh ITA No. 410 of 2019 (O&M) Punjab Infrastructure Development Board, Chandigarh … Appellant versus Commissioner of Income Tax (TDS), Chandigarh ITA No. 411 of 2019 (O&M) Punjab Infrastructure Development Board, Chandigarh … Appellant versus Commissioner of Income Tax (TDS), Chandigarh ITA No. 412 of 2019 (O&M) Punjab Infrastructure Development Board, Chandigarh … Ap versus Commissioner of Income Tax (TDS), Chandigarh CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHIST Mr. Deepak Aggarwal, Advocate, for the appellant. Mr. Amanpreet Singh, Senior Standing counsel for Income Tax Department. SANJEEV PRAKASH SHARMA, J. These are four appeals which have been taken up together for adjudication. The appellant - Punjab Infrastructure Development Board is a statutory body enacted under Section 18 of the Punjab Infrastructure Development & Regulation Act, 2002. These appeals under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’), have been filed by the appellant against the order passed by the Income Tax Appellate -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT Reserved on : 11.11.2024 te of Pronouncement : 20.11.2024 unjab Infrastructure Development Board, Chandigarh … Appellant versus Commissioner of Income Tax (TDS), Chandigarh … Respondent Punjab Infrastructure Development Board, Chandigarh … Appellant versus Commissioner of Income Tax (TDS), Chandigarh … Respondent Punjab Infrastructure Development Board, Chandigarh … Appellant versus Commissioner of Income Tax (TDS), Chandigarh … Respondent Punjab Infrastructure Development Board, Chandigarh … Appellant versus Commissioner of Income Tax (TDS), Chandigarh … Respondent CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA SANJAY VASHISTH Deepak Aggarwal, Advocate, for the appellant. Amanpreet Singh, Senior Standing counsel for Income Tax appeals which have been taken up together for Punjab Infrastructure Development Board is a ed under Section 18 of the Punjab Infrastructure Development & Regulation Act, 2002. These appeals under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’), have been filed by the appellant against the order passed by the Income Tax Appellate Tribunal, Amanpreet Singh, Senior Standing counsel for Income Tax appeals which have been taken up together for Punjab Infrastructure Development Board is a ed under Section 18 of the Punjab Infrastructure Development & Regulation Act, 2002. These appeals under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’), have been filed by the Tribunal, VARINDER SINGH 2024.11.22 14:35 I attest to the accuracy and authencity of this order/judgment ITA No. 408 of 2019 Chandigarh Bench, Chandigarh on 29.03.2019 for the assessment years 2008 2011-12. 2. are being taken from 2010-2011. The assessing officer has treated the appellant as assessee in default and interest under Section 206C (7) of the Act was charged and a demand was raised vide order dated 2 appellant was dismissed taking into consideration the provisions of Section 206C (7) of the Act, which obliges the person, who is responsible for collecting tax and failed to pay it, would be liable to pay simple interest @ 1%, on part thereof on the amount of such tax from the date on which such tax was collectable upto the date on which the tax was actually paid. The appellant was alleged to have received a sum of of toll fee. As per Section 206C (7) of the collect tax @ 2%. The tax to be collected at source collected and deposited, the appellate authority held the assessing officer to be right in treating the person responsible as assessee in default demand was confirmed. 3. cause notice dated Section 271CA of the Act Financial Year 2007-08 2008-09 2009-10 2010-11 ITA No. 408 of 2019 Chandigarh Bench, Chandigarh (hereinafter to be referred as ‘the Tribunal’) on 29.03.2019 for the assessment years 2008 However, the facts for the purpose of adjudication of the case are being taken from ITA No. 408 of 2019, which is for the assessment year 2011. The assessing officer has treated the appellant as assessee in default and interest under Section 206C (7) of the Act was charged and a demand was raised vide order dated 23.03.201 appellant was dismissed taking into consideration the provisions of Section 206C (7) of the Act, which obliges the person, who is responsible for collecting tax and failed to pay it, would be liable to pay simple interest @ thereof on the amount of such tax from the date on which such tax was collectable upto the date on which the tax was actually paid. The appellant was alleged to have received a sum of of toll fee. As per Section 206C (7) of the Act, the appellant was required to collect tax @ 2%. The tax to be collected at source collected and deposited, the appellate authority held the assessing officer to be right in treating the person responsible as assessee in default demand was confirmed. It is stated that thereafter the assessing officer issued show cause notice dated 22.03.2013 and imposed following penalt Section 271CA of the Act, which are as under Financial Amount of Toll Fee Receipt Tax to be collected u/s 206 C 6,93,00,000 15,66,180 9,68,91,319 20,444,60 18,40,41,000 38,83,265 1,42,05,00,00 4,77,255 79,71,160 -2- (hereinafter to be referred as ‘the Tribunal’), on 29.03.2019 for the assessment years 2008-09, 2009-10, 2010-2011 and However, the facts for the purpose of adjudication of the case ITA No. 408 of 2019, which is for the assessment year 2011. The assessing officer has treated the appellant as assessee in default and interest under Section 206C (7) of the Act was charged and a .03.2012. The appeal preferred by the appellant was dismissed taking into consideration the provisions of Section 206C (7) of the Act, which obliges the person, who is responsible for collecting tax and failed to pay it, would be liable to pay simple interest @ thereof on the amount of such tax from the date on which such tax was collectable upto the date on which the tax was actually paid. The appellant was alleged to have received a sum of ` 15,19,41,000/- on account Act, the appellant was required to collect tax @ 2%. The tax to be collected at source (TCS), having not been collected and deposited, the appellate authority held the assessing officer to be right in treating the person responsible as assessee in default and the It is stated that thereafter the assessing officer issued show .2013 and imposed following penalties under as under:- Tax to be collected u/s 206 C Penalty imposable u/s 271CA 15,66,180 15,66,180 20,444,60 20,444,60 38,83,265 38,83,265 4,77,255 4,77,255 79,71,160 79,71,160 , 2011 and However, the facts for the purpose of adjudication of the case ITA No. 408 of 2019, which is for the assessment year 2011. The assessing officer has treated the appellant as assessee in default and interest under Section 206C (7) of the Act was charged and a al preferred by the appellant was dismissed taking into consideration the provisions of Section 206C (7) of the Act, which obliges the person, who is responsible for collecting tax and failed to pay it, would be liable to pay simple interest @ thereof on the amount of such tax from the date on which such tax was collectable upto the date on which the tax was actually paid. The on account Act, the appellant was required to , having not been collected and deposited, the appellate authority held the assessing officer to and the It is stated that thereafter the assessing officer issued show under Penalty imposable VARINDER SINGH 2024.11.22 14:35 I attest to the accuracy and authencity of this order/judgment ITA No. 408 of 2019 4. ` 79,71,160/- order dated 13.06.2014, whereafter the appellant preferred appeal before the Tribunal. It was submitted that the appell as already held by the that as the appellant was not required to collect TCS, the penalty under Section 271CA imposed on failure to collect tax at source could no been levied. The appeal of the appellant was allowed and the penalty lev by the assessing officer and confirmed by the CIT (A) was set aside. 5. to collect tax at source and it had not committed any default under the provisions of Chapter hold that the penalty as imposed under Section 271CA of the Ac therefore, not be levied. The Revenue preferred an appeal bearing ITA No. 65 of 2016 Chandigarh vs M/s Punjab Infrastructure Dev. Boar to levy of penalty under 206C (7) of the Act. The High Court vide its judgment dated 09.05.2017 remanded the case to the Tribunal as in the earlier order passed, the Tribunal had relied upon its earlier decision relating to the a 2009-10, 2010 cases earlier also vide its judgment dated 20.12.2016. When the appeal again came up for hearing before the Tribunal, it reached to the conclusion that the appellant Board ha concession on principal to principal basis and taking into the actual activity performed by the appellant board and irrespective of the wordings of the ITA No. 408 of 2019 The order was passed on 22.03.2013 imposing a total penalty of -. The appeal preferred before the CIT (A) was dismissed vide order dated 13.06.2014, whereafter the appellant preferred appeal before the . It was submitted that the appellant was not required to collect TCS as already held by the Tribunal in its earlier reference order. It was submitted that as the appellant was not required to collect TCS, the penalty under Section 271CA imposed on failure to collect tax at source could no . The appeal of the appellant was allowed and the penalty lev by the assessing officer and confirmed by the CIT (A) was set aside. The Tribunal held that the appellant assessee was not required to collect tax at source and it had not committed any default under the provisions of Chapter XVIIBB of the Act. The Tribunal also proceeded to hold that the penalty as imposed under Section 271CA of the Ac therefore, not be levied. The Revenue preferred an appeal bearing ITA No. 65 of 2016 The Commissioner of Income Tax (TDS) Chandigarh vs M/s Punjab Infrastructure Dev. Boar to levy of penalty under Section 271CA of the Act and interest under Section 206C (7) of the Act. The High Court vide its judgment dated 09.05.2017 remanded the case to the Tribunal as in the earlier order passed, the Tribunal had relied upon its earlier decision relating to the a 10, 2010-2011 and 2011-2012. The High Court had remanded the said cases earlier also vide its judgment dated 20.12.2016. When the appeal again came up for hearing before the Tribunal, it reached to the conclusion that the llant Board had collected the toll fee/ con concession on principal to principal basis and taking into the actual activity performed by the appellant board and irrespective of the wordings of the -3- The order was passed on 22.03.2013 imposing a total penalty of . The appeal preferred before the CIT (A) was dismissed vide order dated 13.06.2014, whereafter the appellant preferred appeal before the ant was not required to collect TCS in its earlier reference order. It was submitted that as the appellant was not required to collect TCS, the penalty under Section 271CA imposed on failure to collect tax at source could not have . The appeal of the appellant was allowed and the penalty levied by the assessing officer and confirmed by the CIT (A) was set aside. held that the appellant assessee was not required to collect tax at source and it had not committed any default under the B of the Act. The Tribunal also proceeded to hold that the penalty as imposed under Section 271CA of the Act could also, therefore, not be levied. The Revenue preferred an appeal before this Court The Commissioner of Income Tax (TDS)-I, Chandigarh vs M/s Punjab Infrastructure Dev. Board on the issue relating Section 271CA of the Act and interest under Section 206C (7) of the Act. The High Court vide its judgment dated 09.05.2017 remanded the case to the Tribunal as in the earlier order passed, the Tribunal had relied upon its earlier decision relating to the assessment years 2008-09, 2012. The High Court had remanded the said cases earlier also vide its judgment dated 20.12.2016. When the appeal again came up for hearing before the Tribunal, it reached to the conclusion that the collected the toll fee/ concession fee as a grantor of the concession on principal to principal basis and taking into the actual activity performed by the appellant board and irrespective of the wordings of the The order was passed on 22.03.2013 imposing a total penalty of . The appeal preferred before the CIT (A) was dismissed vide order dated 13.06.2014, whereafter the appellant preferred appeal before the ant was not required to collect TCS in its earlier reference order. It was submitted that as the appellant was not required to collect TCS, the penalty under t have ied held that the appellant assessee was not required to collect tax at source and it had not committed any default under the B of the Act. The Tribunal also proceeded to t could also, t I, on the issue relating Section 271CA of the Act and interest under Section 206C (7) of the Act. The High Court vide its judgment dated 09.05.2017 remanded the case to the Tribunal as in the earlier order passed, the Tribunal 09, 2012. The High Court had remanded the said cases earlier also vide its judgment dated 20.12.2016. When the appeal again came up for hearing before the Tribunal, it reached to the conclusion that the ession fee as a grantor of the concession on principal to principal basis and taking into the actual activity performed by the appellant board and irrespective of the wordings of the VARINDER SINGH 2024.11.22 14:35 I attest to the accuracy and authencity of this order/judgment ITA No. 408 of 2019 concession agreement, it held as per Section 206C(7) of the Act and penalty under the provisions of Section 271CA of the Act and accordingly decided against the assessee board and in favour of the respondent present appeals have been filed. 6. 2012, whereby the provisions were inserted under Sections 201, 206C and 40 (a)(ia) of the Act and provisions of rationalization of tax at source and tax collection at source were made. It was submitted that the person shall be deemed to be assessee in default i only in cases where the payee failed to pay the tax directly. A deductor cannot be treated as assessee in default in non/ short deduction of tax if the payee has discharged his tax liability. The payer would be liabl interest under Section 201 (1A) of the Act on the account of non/short deduction of tax from the date on which such tax was deductible to the date on which the payee has discharged his tax liability directly. There was no clarity and Section 201 o 201 (1A)(i) of the Act shall be payable from the date on which such tax was deductible to the date of furnishing of return of the income by such resident payee. Similarly amendments were also made to Section relating to TCS for clarifying the deemed date of discharge of tax liability. These amendments were brought into force with effect from 2012. Learned counsel, therefore, submitted that the appellant had reasonable cause for not collecting TCS under Section 206C (ic) of the Act. The penalty under Section 271CA of the Act was unwarranted. ITA No. 408 of 2019 concession agreement, it held the appellant Board to be liable to pay interest as per Section 206C(7) of the Act and penalty under the provisions of Section 271CA of the Act and accordingly decided against the assessee board and in favour of the respondent-revenue. Feeling aggrieved, present appeals have been filed. Learned counsel for the appellant has relied on the Finance Bill, whereby the provisions were inserted under Sections 201, 206C and 40 (a)(ia) of the Act and provisions of rationalization of tax at source and tax collection at source were made. It was submitted that the person shall be deemed to be assessee in default in respect of non/short deduction of tax only in cases where the payee failed to pay the tax directly. A deductor cannot be treated as assessee in default in non/ short deduction of tax if the payee has discharged his tax liability. The payer would be liabl interest under Section 201 (1A) of the Act on the account of non/short deduction of tax from the date on which such tax was deductible to the date on which the payee has discharged his tax liability directly. There was no clarity and Section 201 of the Act was amended and interest under Section 201 (1A)(i) of the Act shall be payable from the date on which such tax was deductible to the date of furnishing of return of the income by such resident payee. Similarly amendments were also made to Section relating to TCS for clarifying the deemed date of discharge of tax liability. These amendments were brought into force with effect from 2012. Learned counsel, therefore, submitted that the appellant had reasonable cause for not TCS under Section 206C (ic) of the Act. The penalty under Section 271CA of the Act was unwarranted. -4- the appellant Board to be liable to pay interest as per Section 206C(7) of the Act and penalty under the provisions of Section 271CA of the Act and accordingly decided against the assessee revenue. Feeling aggrieved, the Learned counsel for the appellant has relied on the Finance Bill, whereby the provisions were inserted under Sections 201, 206C and 40 (a)(ia) of the Act and provisions of rationalization of tax at source and tax collection at source were made. It was submitted that the person shall be n respect of non/short deduction of tax only in cases where the payee failed to pay the tax directly. A deductor cannot be treated as assessee in default in non/ short deduction of tax if the payee has discharged his tax liability. The payer would be liable to pay interest under Section 201 (1A) of the Act on the account of non/short deduction of tax from the date on which such tax was deductible to the date on which the payee has discharged his tax liability directly. There was no f the Act was amended and interest under Section 201 (1A)(i) of the Act shall be payable from the date on which such tax was deductible to the date of furnishing of return of the income by such resident payee. Similarly amendments were also made to Section 206C of the Act relating to TCS for clarifying the deemed date of discharge of tax liability. These amendments were brought into force with effect from 2012. Learned counsel, therefore, submitted that the appellant had reasonable cause for not TCS under Section 206C (ic) of the Act. The penalty under the appellant Board to be liable to pay interest as per Section 206C(7) of the Act and penalty under the provisions of Section 271CA of the Act and accordingly decided against the assessee the Learned counsel for the appellant has relied on the Finance Bill, whereby the provisions were inserted under Sections 201, 206C and 40 (a)(ia) of the Act and provisions of rationalization of tax at source and tax collection at source were made. It was submitted that the person shall be n respect of non/short deduction of tax only in cases where the payee failed to pay the tax directly. A deductor cannot be treated as assessee in default in non/ short deduction of tax if the e to pay interest under Section 201 (1A) of the Act on the account of non/short deduction of tax from the date on which such tax was deductible to the date on which the payee has discharged his tax liability directly. There was no f the Act was amended and interest under Section 201 (1A)(i) of the Act shall be payable from the date on which such tax was deductible to the date of furnishing of return of the income by such resident 206C of the Act relating to TCS for clarifying the deemed date of discharge of tax liability. These amendments were brought into force with effect from 2012. Learned counsel, therefore, submitted that the appellant had reasonable cause for not TCS under Section 206C (ic) of the Act. The penalty under VARINDER SINGH 2024.11.22 14:35 I attest to the accuracy and authencity of this order/judgment ITA No. 408 of 2019 7. learned Tribunal appellant. Mo and the penalty ought to have been deleted. 8. orders passed by the Tribunal. It is stated that interest as per the provisions of Section 206C(7) of the Act have been deposited. 9. 10. party. The agreement has been entered between the Government of Punjab and the Concessionaire. The Tribunal has erroneously held that the agreement is just a paper document and the appellant b acting as a guarantor. Taking into consideration, the penalty was imposed. However, we find that the document which has been executed between the Government of Punjab and the Concessionaire could not have been ignored nor its nature co collecting the toll fee, concession fee, the same would be on behalf of the Government of Punjab. Usage of such an amount to certain extent by the Board, would not mean that the Board is liable for purpose of depositing the TCS. The findings arrived at by the Tribunal regard to imposition of penalty under Section 271CA of the Ac therefore, found to be without any basis and are set aside. 11. been considered by the Supreme Court in New Delhi vs Eli Lilly and Company (India) Private Limited SCC 1, wherein it was held as under: ITA No. 408 of 2019 Learned counsel for the appellant, thus, submitted that the Tribunal was not justified in summarily dismissing the appeals of the appellant. More so, as there was no notice under Section 271CA of the Act and the penalty ought to have been deleted. Learned counsel for the respondent, however, supports the orders passed by the Tribunal. It is stated that interest as per the provisions ion 206C(7) of the Act have been deposited. We have considered the submissions. We find that the appellant is just a nodal agency as conforming party. The agreement has been entered between the Government of Punjab and the Concessionaire. The Tribunal has erroneously held that the agreement is just a paper document and the appellant b acting as a guarantor. Taking into consideration, the penalty was imposed. However, we find that the document which has been executed between the Government of Punjab and the Concessionaire could not have been ignored nor its nature could be changed by the Tribunal collecting the toll fee, concession fee, the same would be on behalf of the Government of Punjab. Usage of such an amount to certain extent by the Board, would not mean that the Board is liable for purpose of depositing the TCS. The findings arrived at by the Tribunal regard to imposition of penalty under Section 271CA of the Ac therefore, found to be without any basis and are set aside. We find that the issue regarding Section 271C of the Act has been considered by the Supreme Court in Commissioner of Income Tax, New Delhi vs Eli Lilly and Company (India) Private Limited SCC 1, wherein it was held as under:- -5- Learned counsel for the appellant, thus, submitted that the was not justified in summarily dismissing the appeals of the re so, as there was no notice under Section 271CA of the Act Learned counsel for the respondent, however, supports the orders passed by the Tribunal. It is stated that interest as per the provisions ion 206C(7) of the Act have been deposited. We have considered the submissions. We find that the appellant is just a nodal agency as conforming party. The agreement has been entered between the Government of Punjab and the Concessionaire. The Tribunal has erroneously held that the agreement is just a paper document and the appellant board itself would be acting as a guarantor. Taking into consideration, the penalty was imposed. However, we find that the document which has been executed between the Government of Punjab and the Concessionaire could not have been ignored Tribunal. If the appellant Board is collecting the toll fee, concession fee, the same would be on behalf of the Government of Punjab. Usage of such an amount to certain extent by the Board, would not mean that the Board is liable for the same and for the purpose of depositing the TCS. The findings arrived at by the Tribunal with regard to imposition of penalty under Section 271CA of the Act are, therefore, found to be without any basis and are set aside. egarding Section 271C of the Act has Commissioner of Income Tax, New Delhi vs Eli Lilly and Company (India) Private Limited (2009) 15 Learned counsel for the appellant, thus, submitted that the was not justified in summarily dismissing the appeals of the re so, as there was no notice under Section 271CA of the Act Learned counsel for the respondent, however, supports the orders passed by the Tribunal. It is stated that interest as per the provisions We find that the appellant is just a nodal agency as conforming party. The agreement has been entered between the Government of Punjab and the Concessionaire. The Tribunal has erroneously held that the oard itself would be acting as a guarantor. Taking into consideration, the penalty was imposed. However, we find that the document which has been executed between the Government of Punjab and the Concessionaire could not have been ignored . If the appellant Board is collecting the toll fee, concession fee, the same would be on behalf of the Government of Punjab. Usage of such an amount to certain extent by the the same and for the with are, egarding Section 271C of the Act has Commissioner of Income Tax, (2009) 15 VARINDER SINGH 2024.11.22 14:35 I attest to the accuracy and authencity of this order/judgment ITA No. 408 of 2019 We find that in the present case too deduction of tax at source was on bonafide reasons and, therefore, imposition of penalty was wholly uncalled for. 12. Act amounting to for the financial year 2008 and ` 4,77,255/ ITA No. 408 of 2019 “93. Section 271-C inter alia states that if person fails to deduct the whole or any part of the tax as required by the provisions of Chapter XVII person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct. In these cases we 271-C(1)(a). Thus Section 271 that the penalty leviable shall be equal to the amount of tax which such person failed to deduct. We cannot hold this provision to be mandatory or a compensatory or automatic because under Section 273 enacted that penalty shall not be imposed in cases falling thereunder. Section 271- cases. 94. Section 273-B states that notwithstanding anything contained in Section 271 imposed on the person or the assesses for failure to deduct tax at source if such person or the assessee proves that there was a reasonable cause for the said failure. Therefore, the liability to levy of penalty can be fastened only on the person who does not have good d sufficient reason for not deducting tax at source. Only those persons will se liable to penalty who do not have good and sufficient reason for sot deducting the tax. The burden, of course, is on the person to prove such good and sufficient reason.” We find that in the present case too deduction of tax at source was on bonafide reasons and, therefore, imposition of penalty was wholly uncalled Accordingly, penalties imposed under Section Act amounting to ` 15,66,180 for the financial year 2007 for the financial year 2008-09, ` 38,83,265/- 4,77,255/- for the financial year 2010-11 -6- C inter alia states that if any person fails to deduct the whole or any part of the tax as required by the provisions of Chapter XVII-B then such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct. In these cases we are concerned with Section C(1)(a). Thus Section 271-C (1)(a) makes it clear that the penalty leviable shall be equal to the amount of tax which such person failed to deduct. We cannot hold this provision to be mandatory or a compensatory or because under Section 273-B Parliament has enacted that penalty shall not be imposed in cases falling -C falls in the category of such B states that notwithstanding anything contained in Section 271-C, no penalty shall be imposed on the person or the assesses for failure to deduct tax at source if such person or the assessee proves that there was a reasonable cause for the said failure. Therefore, the liability to levy of penalty can be fastened on who does not have good d sufficient reason for not deducting tax at source. Only those persons will se liable to penalty who do not have good and sufficient reason for sot deducting the tax. The burden, of course, is on the person to prove such good We find that in the present case too deduction of tax at source was on bonafide reasons and, therefore, imposition of penalty was wholly uncalled imposed under Section 271CA of the 15,66,180 for the financial year 2007-08, ` 20,44,460/- - for the financial year 2009-10, 11 are quashed and set aside. any person fails to deduct the whole or any part of the tax as B then such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to are concerned with Section (1)(a) makes it clear that the penalty leviable shall be equal to the amount of tax which such person failed to deduct. We cannot hold this provision to be mandatory or a compensatory or B Parliament has enacted that penalty shall not be imposed in cases falling C falls in the category of such B states that notwithstanding ty shall be imposed on the person or the assesses for failure to deduct tax at source if such person or the assessee proves that there was a reasonable cause for the said failure. Therefore, the liability to levy of penalty can be fastened on who does not have good d sufficient reason for not deducting tax at source. Only those persons will se liable to penalty who do not have good and sufficient reason for sot deducting the tax. The burden, of course, is on the person to prove such good We find that in the present case too deduction of tax at source was on bonafide reasons and, therefore, imposition of penalty was wholly uncalled 271CA of the - 10, VARINDER SINGH 2024.11.22 14:35 I attest to the accuracy and authencity of this order/judgment ITA No. 408 of 2019 13. 14. 15. 20.11.2024 vs Whether speaking/reasoned Whether reportable ITA No. 408 of 2019 All the appeals are accordingly allowed. All pending applications stand disposed of. No costs. (SANJEEV PRAKASH SHARMA) (SANJAY VASHIS Whether speaking/reasoned Yes/No Whether reportable Yes/No -7- allowed. All pending applications stand disposed of. (SANJEEV PRAKASH SHARMA) JUDGE SANJAY VASHISTH) JUDGE Yes/No Yes/No VARINDER SINGH 2024.11.22 14:35 I attest to the accuracy and authencity of this order/judgment "