Commissioner Of Income Tax vs Matsushita Electric Industrial ...
2005 Latest Caselaw 823 Del

JUDGMENT

Swatanter Kumar, J.

1. In this appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act), the appellant challenges the correctness and validity of the order passed by the Income Tax Appellate Tribunal dated 5th November, 2004 wherein it accepted the appeal of the assessed in relation to the assessment year 1993-94 and deleted the penalty imposed by the authorities under Section 271(c) of the Act while relying upon the different judgments of different Benches of this court.

2. The respondent assessed is a non-resident company incorporated in Japan. During the survey operation under Section 133A of the Act conducted at the liaison office of the assessed company on 16.11.1998, the assessing officer came to the conclusion that the assessed had failed to deduct TDS in accordance with law in relation to some of its employees overseas in terms of section 192 of the Act. The assessing officer thus imposed upon the assessed the penalty of Rs. 8,84,36,857/- equal to the tax quantified. This order was challenged in appeal before the Commissioner of Income Tax (Appeals) which was also dismissed vide order dated 10.10.2000. The assessed thereafter preferred further appeal before the Income Tax Appellate Tribunal, which as already noticed, was allowed in the above terms.

3. The challenge raised on behalf of the appellant to the judgment of the Income Tax Appellate Tribunal is on the ground that it suffers from error of law and raises important question of law before this court in the present appeal. This need not detain us any further in view of the judgment of this court in relation to the same assessed though for a different assessment year dated 19th May, 2005 in CIT v. MATSUSHITA ELECTRIC INDUSTRIAL CO. LTD. (ITA NO. 346/2005) in which it held as under:-

"The contentions raised on behalf of the Revenue need not detain us any further in view of the fact that in the case of CIT v. Hitachi Ltd. Japan (ITA No. 284/2005) decided on 27.4.2005 by a Division Bench of this Court, similar contentions raised on behalf of the Revenue were rejected and the Court held as under :-

"It is not necessary for us to notice the merit or otherwise of the contentions raised before us in any greater detail. Suffices it to note and which is fairly pointed out by the learned counsel appearing for Revenue Department that the controversy in the present case is squarely covered on finding of fact as well as on question of law by a judgment of this Court in the case of Commissioner of Income-tax v. ITOCHU Corporation 268 ITR 172. In that case, the Court held that finding relation to the fact whether the assessed acted bona fide was a finding of fact and the assessed had paid the tax in terms of law subsequently. On such finding of fact, the Tribunal was justified in deleting the penalty and it would not give rise to a substantial question of law unless the finding recorded was patently perverse. In this very judgment while relying upon in the Division Bench judgment of this Court in the case of Woodward Governor India (P) Ltd. v. CIT (2002) 253 ITR 745, the Bench also noticed that whether there was reasonable cause or not for the assessed not to deduct tax at source, is a question of fact which has to be determined by the Tribunal and normally would not give rise to a question of law. With respect, we would adopt the reasoning of the Division Bench in the CIT v. ITOCHU Corporation (supra). In the present case, the Tribunal has come to a finding of fact that the reasonable cause can be reasonably said to be a cause which prevents a man of average intelligence and ordinary prudence, acting under a normal circumstances without negligence or inaction or want of bonafide. It then recorded a definite finding that the act on the part of the assessed was bonafide and it acted under a reasonable belief.

We find no merit in this appeal as no substantial question of law arises for consideration in this appeal. Dismissed."

For the reasons aforestated and in view of the above referred judgment, we are of the considered view that no question of law much less a substantial question of law arises for determination in the present appeal. The appeal of the Revenue, thus, is dismissed while leaving the parties to bear their own costs."

4. For the reasons afore-stated, we are of the considered view that no question of law much less a substantial question of law arises for consideration in the present appeal. The same is dismissed.