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3. The solitary issue raised is whether the CIT(A) is justified in confirming the Assessing Officer's order, wherein penalty M/s.Vijaya Hospitality and Resorts Limited.

has been imposed u/s 271C of the I.T.Act amounting to Rs.9,12,060.

4. The brief facts of the case are as follows:

The assessee is a company engaged in the business of running a resort, namely, `The Elephant Court' at Thekkady. For the assessment year 2010-2011, the assessee had deducted TDS for an amount of Rs.8,12,839. The assessee did not remit the TDS on the due date and the entire TDS along with interest was remitted on 30.04.2011 amounting to Rs.9,12,069. The Additional CIT issued notice show causing the assessee why the penalty u/s 271C of the I.T.Act should not be imposed. The assessee in reply to the notice submitted that due to acute financial problem and shortage of funds, the TDS could not be remitted on the due date. It was further submitted that majority of the TDS amount is with reference to Directors remuneration for which no payments were made, but only there was book entry. Therefore, it was submitted that there was a reasonable cause envisaged u/s 273B of the I.T.Act and requested that penalty may not be imposed u/s 271C of the I.T.Act.

and therefore, penalty u/s 271C of the I.T.Act ought to be deleted.

8. The learned Departmental Representative strongly supported the orders of the Income Tax Authorities.

9. We have heard rival submissions and perused the material on record. The Full Bench of the Hon'ble Kerala High Court in the case of Lakshadweep Development Corporation Ltd. v. Addl.CIT & Anr. (supra) had reversed the judgment of the Hon'ble Kerala High Court in the case of US Technology International Private Limited v. CIT (supra) and Classic Concepts Home India Pvt. Ltd. v. CIT reported in (2016) 383 ITR 225 (Ker.). The Full Bench of the Hon'ble Kerala High Court had held penalty u/s 271C(1)(b) of the I.T.Act for non- remittance of tax deducted at source will have application only to a limited extent, involving sub-section (2) of section 115-O of the I.T.Act (coming under Chapter XII-D) or covered under the "second proviso" to section 194B f the I.T.Act (coming under Chapter XIIB). The relevant finding of the judgment of the Full Bench of the Hon'ble Kerala High Court reads as follow:-

Full Bench judgment of the Hon'ble Kerala High Court, penalty u/s 271C of the I.T.Act cannot be imposed for non-remittance of tax deducted at source u/s 194C, 194J, 194I and 192B of the I.T.Act.

9.3 The Full Bench of the Hon'ble Kerala High Court in the case of Lakshadweep Development Corporation Ltd. v. Addl.CIT & Anr. (supra) while reversing the Division Bench ruling in the case of U S Technology International Limited (supra), had held that section 273B of the I.T.Act shall be applicable for also the cases covered u/s 271C(1)(b) of the I.T.Act and not confined to section 271C(1)(a) of the I.T.Act.

M/s.Vijaya Hospitality and Resorts Limited.

The relevant finding of the Full Bench of the Hon'ble Kerala High Court reads as follows:-

"Section 273B of the Income-tax Act stipulates that no penalty shall be imposed on the person or the assessee, as the case may be, for any failure referred to in the provisions mentioned therein, if he proves that there was reasonable cause for the failure. The said provision has already been extracted. One among the provisions mentioned therein is section "271C". To put it more clear, the whole provision of section 271C is reckoned as such and no segregation has been effected unlike the limited extent of reckoning clause (b) of sub-section (1) of section 271. In other words, clause (b) of sub-section (1) of section 271C (dealing with failure to remit the deducted tax) is not excluded or the benefit is not confined to the instance covered by section 271C(1)(a) alone. Section 273B itself starts with a "non obstante clause" saying that the benefit is to be extended, to the extent as specified therein, notwithstanding anything contained in the provisions mentioned above, which includes section 271C in toto. As it stands so, it is quite open for the person / assessee concerned to claim the benefit of section 273B even in a case covered by section 271C(1)(b) (failure to remit the tax deducted at source), despite the fact that it may be a more serious default, than the failure to deduct the tax at source."