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M/s. Siomond Pharmaceuticals (P.) Ltd. 880/804B, Main Market, 3rd Floor, Rani Bagh New Delhi Vs. JCIT Range-77 New Delhi
February, 28th 2020
         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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