IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: `G' NEW DELHI
BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER
&
SHRI ANADEE NATH MISSHRA, ACCOUNTANT MEMBER
ITA No.-6545/Del/2016, A.Y. 2010-11
M/s. Siomond Vs. JCIT
Pharmaceuticals (P.) Ltd. Range-77
880/804B, Main Market, New Delhi
3rd Floor, Rani Bagh
New Delhi
PAN : AAICS0568A
Appellant Respondent
Assessee by : None
Revenue by : Sh. Saras Kumar, Sr. DR
ORDER
PER ANADEE NATH MISSHRA, A.M.:
(A) This appeal has been filed by the Assessee
against the impugned appellate order dated 08.09.2016
passed by Learned Commissioner of Income Tax (Appeals)-
41, New Delhi [in short, "Ld. CIT(A)"] pertaining to
Assessment Year 2010-11.
(B) All the grounds of appeal are related to penalty,
imposed vide order dated 17.07.2015 by the Assessing
Officer, amounting to Rs. 6,96,986/- under section 276C of
I.T.Act for failure of the assessee to deduct tax at source at
2 ITA NO. 6545/Del/2016
(M/s. Siomond Pharmaceuticals (P.) Ltd.)
the time of payment of EMI to NBFC. Vide impugned
appellate order dated 08/09/2016, Ld. CIT(A) confirmed the
aforesaid penalty, holding as under :
"4.1 I have carefully considered the submission of the appellant
and I have also gone through the order u/s 271C of the Act dated
17.07.2015 passed by the Joint Commissioner of Income Tax.
4.2 The appellant has claimed that it was under bonafide relief
that no tax was deductablc out of payment of interest to Non-
Banking Financial Institutions and
hence it did not deduct tax on such payments. It has been claimed
that this belief was a reasonable cause of the delay and hence
penalty u/s 271C should not have been imposed.
4.3 The appellant has relied on various decisions in support of his
claim that penalty need not be imposed in each and every case and
facts and circumstances of the case need to be taken into
consideration and only those who do not have good and sufficient
reason for not deducting tax will be liable to imposition of penalty.
4.4 While 1 am in full agreement that penalty u/s 271C may not be
imposed where there is a reasonable cause, in my considered view
the case of the appellant cannot be taken as a reasonable cause for
failure to deduct tax. The appellant has failed to prove that it was
under bonafide belief that tax was not deductible on the
payments of interest to NBFCs. The decision of IT AT Chandigarh
relied upon by the appellant relates to an individual, while the
appellant is a company. Ignorance of law cannot be taken as an
excuse for reasonable cause.
4.5 The decision in the case of M/s Sahara India Financial
Corporation I id relied upon by the appellant has different facts. I he
Hon'ble FI AT, Delhi, in Para 36
of the order have observed that the assessee Sahara India Financial
Corpn. Ltd. had transferred amount to interest payable account,
though there was no liabilitv to transfer this amount to such account.
Non-deduction of tax at the time of such transfer was held by ITAT
to be a minor default and it was considered a reasonable cause. On
the other hand, in the case of appellant, tax was deductible on the
amount of interest paid/payable to NBFCs.
4.6 The appellant has also relied on the decision in the case of M/s.
Cadbury India Ltd. The JCIT in his penalty order has clearly
distinguished the facts of the case. In Cadbury India Ltd. the
assessee had claimed that the default had been committed on the
basis of misconceived professional advice given by CAs, which was
held by the Court as reasonable cause.
3 ITA NO. 6545/Del/2016
(M/s. Siomond Pharmaceuticals (P.) Ltd.)
5. In the facts and circumstances of the case, there exists no
reasonable cause. In the result, the appeal filed by the appellant is
dismissed and the penalty imposed by the JCIT is confirmed. The AO
is directed to take consequential action at the time of giving effect to
this order accordingly."
(C) At the time of hearing, Revenue was represented by
Shri Saras Kumar, Learned Senior Departmental
Representative ("Ld. Sr. DR", for short). However, none was
present from the assessee's side. In the absence of any
representation from assessee's side, at the time of hearing
before us, we heard the Ld. Sr. DR; who relied upon
aforesaid impugned appellate order dated 08/09/2016 of
the Ld. CIT(A). After perusal of the materials on record; we
find that the Ld. CIT(A) has passed speaking order, relevant
portions of which have already been reproduced in earlier
part of this order. We find that the Ld. CIT(A) has given
detailed reasons for her decision on merits in the aforesaid
impugned appellate order dated 08/09/2016. During
appellate proceedings in Income Tax Appellate Tribunal
("ITAT", for short) no material has been brought for our
consideration to persuade us to take a view different from
the view taken by the Ld. CIT(A) in the impugned appellate
order dated 08/09/2016. After hearing the Ld. Sr. DR, and
after perusal of materials on record, and further, in view of
the foregoing discussion, we decline to interfere with the
aforesaid impugned appellate order dated 08/09/2016 of
Ld. CIT(A), and accordingly, this appeal is dismissed.
4 ITA NO. 6545/Del/2016
(M/s. Siomond Pharmaceuticals (P.) Ltd.)
(D) Before we part; we explicitly clarify that the assesee
will be at liberty to approach ITAT for restoration of the
appeal in accordance with Proviso to Rule 24 of Income Tax
(Appellate Tribunal), Rules, 1963. If the assessee does
approach ITAT for restoration of the appeals in ITAT, the
matter will be considered in accordance with law having
regard to the facts and circumstances.
(E) In the result, appeal filed by assessee is dismissed.
Order pronounced in the open court on 28/02/2020.
Sd/- Sd/-
(AMIT SHUKLA) (ANADEE NATH MISSHRA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 28/02/2020
*BR*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
TRUE COPY
ASSISTANT REGISTRAR
ITAT NEW DELHI
Date of dictation 25.02.2020
Date on which the typed draft is placed before the 25.02.2020
dictating Member
Date on which the typed draft is placed before the
Other Member
Date on which the approved draft comes to the Sr.
PS/PS
Date on which the fair order is placed before the
Dictating Member for pronouncement
5 ITA NO. 6545/Del/2016
(M/s. Siomond Pharmaceuticals (P.) Ltd.)
Date on which the fair order comes back to the Sr.
PS/PS
Date on which the final order is uploaded on the
website of ITAT
Date on which the file goes to the Bench Clerk
Date on which the file goes to the Head Clerk
The date on which the file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
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