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7. Therefore, in conclusion, in our considered view and in the facts and circumstances of the case before us, the levy of interest under Section 201(1A) has to be deleted. We allow the prayer of the assessee on this count.

8. The grievance of the assessee in this appeal is against the levy of penalty under Section 271C. The facts giving rise to the levy of penalty under Section 271C has already been discussed by us in the assessee's appeal in ITA No. 833/Bang/2001 in the preceding paragraphs. In brief to recapituate, it would be sufficient to observe that the assessee had not deducted the tax at source under Section 194A on the amount of interest income credited to the account of the recipient, namely, M/s Wipro Ltd., its holding company on 31st March, 2000. The AO initiated and asked the assessee to show cause as to why the penalty under Section 271C should not be levied for such failure. The assessee pleaded that the recipient-company had assured the assessee that a certificate envisaged under Section 197(1) exempting the tax deduction at source would be furnished to the assessee. The assessee accepted the plea made by recipient-company to furnish the certificate in due course of time and, therefore, proceeded to close its accounts on 31st March, 2000, without subjecting the income so credited to deduction of tax at source. Subsequently, the assessee was informed by the recipient-company that the required certificate under Section 197(1) of the Act could not be furnished to the assessee as promised. However, the due amount of tax was paid by the receipient company immediately, i.e., by 28th April, 2000, and, therefore, it was pleaded that there was no loss of revenue to the Department. It was with the aforesaid pleadings that a case was sought to be made out by the assessee for having a reasonable cause for not having deducted the tax at source on interest income credited to the account of its holding company on 31st March, 2000. The aforesaid plea was rejected by the AO and the penalty was levied under Section 271C. The AO while doing so noticed that the reasonable cause pertaining to the obtaining of the certificate under Section 197 for nil deduction was only an afterthought as the recipient-company could not have obtained the same in view of its positive taxable income, The AO also disapproved of the assessee's argument to the effect that the ultimate tax liability having been discharged by the recipient, and held that it was of no help to the assessee and held it liable for non-compliance with the requirements of Section 194A, Aggrieved by the aforesaid findings, the matter was carried in appeal before the first appellant authority wherein similar arguments were taken by the assessee. The first appellate authority has sustained the action of the AO. The first appellate authority did not find any substance in the argument that the non-deduction was with reasonable cause arising out of the bona fide belief that the recipient would furnish the certificate as promised and such non-furnishing was a circumstance beyond the control of the assessee. According to the first appellate authority, as the assessee-company was well-versed with the TDS matters it was certainly conscious of its duty as a tax deductor and was very much aware that the non-production of the promised certificate under Section 197 would not be a mitigating factor. Presently, the assessee is in appeal before us against the impugned order.

"Sec. 271C : (1) If any person fails to :

(a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B; or

(b) pay the whole or any part of the tax as required by or under :

(i) Sub-section (2)of Section 115-0; or

(ii) the second proviso to Section 194B, 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 or pay as aforesaid,"

The said section provides for the levy of penalty of a sum equal to the amount of tax which a person has failed to deduct or pay as required by or under the provisions of Chapter XVH-B. The failure of the assessee to deduct the required tax is admittedly not in dispute. The crux of the matter before us revolves around the provisions of Section 273B which provides for cases wherein penalties need not be imposed in certain cases. Section 273B provides that no penalty under certain sections including Section 271C need be imposed on the assessee for the failure referred therein provided if it is proved that there was a reasonable cause with the assessee for the said failure. Therefore, the leviability of the penalty in the present case has to be evaluated from this angle.

Ostensibly, the view of the two Hon'ble High Courts differ. We are of a considered view to follow the decision of the Rajasthan High Court. The Rajasthan High Court decision is a later decision and has taken into consideration the earlier decision of the Delhi High Court. Therefore, we are not inclined to agree with the argument of the assessee's counsel to the effect that as the Department has not treated the assessee in default under Section 201(1), for good and sufficient reasons the same test should also hold good as being a reasonable cause vis-a-vis the levy of penalty under Section 271C r/w Section 273B. In fact, the levy of penalty under Section 271C is independent of the other provisions of levy of interest, penalty under Section 221, prosecution under Section 276B, etc. 11(v). The only argument of the assessee's counsel left to be dealt with pertains to the existence or otherwise of a reasonable cause for not having deducted the tax at source as required under Section 194A. The reason advanced for the non-deduction is to the effect that the recipient-company made it known to the assessee that it would furnish the certificate under Section 197(1) for non-deduction of tax at source. Admittedly, the recipient is a holding company of the assessee. It can be prudent and appropriate to envisage that if a plea is made to a subsidiary by its holding company, the subsidiary company, in all fairness would accept the same without casting any doubt. This is because of the reason that the two companies being in the same group having common interests, having common management, etc. would not in ordinary circumstances, work to deceive or jeopardise each other. Therefore, if it was made out by the holding company to the assessee before us that the necessary certificate under Section 197 shall be furnished and, therefore, the deduction under Section 194A was not required could very well have been accepted by the assessee. The subsequent non-furnishing of the same for any reasons, cannot be of aid or help to evaluate the decision taken by the assessee-company as on the date of deduction, i.e., 31st March, 2000, by way of which it accepted the plea and did not deduct the required TDS. Therefore, the said proposition coming from a holding company, we are in agreement with the stand of the assessee that it had a genuine and bona fide belief with regard to the factual aspect of the plea being advanced, which any prudent person would have done under similar circumstances. If on a later date, the said plea is found to be false or not justifiable, it cannot distract from the existence of the same on the date when it was evaluated by the parties.

A perusal of the aforesaid leads to the conclusion that according to the Hon'ble High Court if in a given situation, the yardsticks which are applied for granting of waiver of penalty under Section 273A, etc. can also be used to test the efficacy of levy of penalty under Section 271C. Therefore, we proceed to test the application of the ingredients of Section 273A to the present case which is governed by Section 273B. The three conditions for allowing the waiver under Section 273A as found outlined in the aforesaid paragraphs are that firstly the assessee has prior to detection of concealment furnished particulars of its income. Secondly the assessee must have made full and true disclosure voluntarily and in good faith. Thirdly, that the assessee should have co-operated with any enquiry relating to the assessment of income. Against the. aforesaid three tests, we notice that the assessee in association with the recipient of the income has made good the default before the due date applicable to the assessee i.e., 28th April, 2000 suo motu. The default has been made good before the filing: of the return as required under Chapter XIV-B. Needless to mention that the Department has only issued the notice on 15th Dec., 2000, for carrying out the verification of its annual return of TDS. Therefore, in our considered view, the first condition is satisfied. The second condition regarding the full and true disclosure made voluntarily and in good faith is also not in dispute on the basis of facts as found by us and as discussed in detail in the aforesaid paragraphs. The third condition of the assessee having co-operated in all the enquiries with the Department relating to the quantification of the tax and demands is also beyond doubt. In the end, we conclude that the assessee has indeed complied with all the conditions as envisaged under Section 273A and the same must also be considered as reasonable cause as envisaged under Section 273B for taking the assessee outside the rigors of Section 271C.