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Showing contexts for: 271C in M/S. Arrone Ceramic, At Vaghasiya, ... vs The Jcit Tds Range, Rajkot, Rajkot on 23 August, 2023Matching Fragments
5. The learned CIT (A), NFAC has erred in upheld in the imposition of penalty u/s.271C even though no order u/s.201 (1) has been passed by the Joint Commissioner of Income-tax, TDS Range, Rajkot before initiation of proceedings u/s.271C of the Income-tax Act 1961.
6. The learned CIT(A), NFAC has erred in not considering the replies filed in response to the show cause notice issued by The Joint Commissioner of Income-tax, TDS Range, Rajkot.
7. The learned CIT (A), NFAC has erred in not considering the Adjournment sought by the Appellant for the hearing was fixed on 21.07.2021 by the notice u/s.250 dated 09.07.2021.
3. The brief facts of the case are that the assessee purchased two immovable properties amounting to Rs. 3.88 crores and Rs. 64.75 lakhs on which no TDS was deducted under Section 194-IA of the Act. The Assessing Officer initiated penalty proceedings under Section 271C of the Act, during the course of which the assessee submitted that the seller of the aforesaid two properties are regularly assessed to tax and they have disclosed income on sale of the aforesaid properties in their return of income and paid taxes thereon. A certificate from the chartered accountant under the First Proviso to Section 201 of the Act was also furnished before the Assessing Officer. However, the Assessing Officer rejected the contention of the assessee and imposed penalty under Section 271C of the Act, with the following observations:
4. In appeal, Ld. CIT(Appeals) upheld the levy of penalty with the following observations:
"3.3 I am inclined to agree with the findings of the assessing officer. The AO has succinctly discussed the issue in the order. The mere factum of the seller having disclosed the income of the sale of property in the return and having paid tax thereon and interest having being paid by the appellant does not protect the appellant from penalty. As per the provisions of section 194IA of the IT Act, the appellant was liable to deduct tax and pay it to Government within the time limit prescribed. Section 271C of the Act provides for the levy of penalty in cases where the appellant has failed to comply with provisions as required u/s 201(1) of the IT Act i.e. deduct the whole or any part of the tax as required by or under the provisions of Chapter VXII-B unless there is a reasonable cause for failure as stipulated in Sec 273B. In this case the assessee failed to deduct and deposit the tax as per section 194IA and is therefore liable for penalty u/s 271C. No satisfactory explanation has been offered for the default.
"(iv) On the Scope of Section 271C read with Section 273B: 35. Section 271C 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 271C(1)(a). Thus Section 271C(1)(a) makes it Arrone Ceramic vs. JCIT Asst.Year -2016-17 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 compensatory or automatic because under Section 273B Parliament has enacted that penalty shall not be imposed in cases falling there under. Section 271C falls in the category of such cases.