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| The Tax Publishers2020 TaxPub(DT) 1614 (Bom-HC) : (2020) 272 TAXMAN 0144 FINANCE (NO.2) ACT, 2004
Section 105
Merely because in assessment order, AO comes to a conclusion that assessee had failed to collect Securities Transaction Tax (STT) or had failed to pay such STT to credit of Central Government, it would not ipso-facto lead to imposition of penalty.
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Penalty under section 105 - Allegation that assessee failed to collect and deposit STT - Automatic invocation of penal provisions whether justified -
Penalty was imposed under section 105(a) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2) Act, 2004 due to failure of assessee to discharge its statutory liability to collect the STT at prescribed rates under section 100(4) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2) Act, 2004. Held: A conjoint reading of sections 105 and 108 Securities Transaction Tax (STT) would make it clear that imposition of penalty is to be proceeded separately as a separate proceeding. Merely because in assessment order, AO comes to a conclusion that assessee had failed to collect Securities Transaction Tax (STT) or had failed to pay such STT to credit of Central Government, it would not ipso-facto lead to imposition of penalty. Once such a conclusion is reached, assessee is required to be provided reasonable opportunity of hearing and during hearing if assessee can prove that there was reasonable cause for such failure, no penalty shall be imposed. Since Tribunal had already held assessee to be not liable for any alleged short deduction of STT, thus, penalty was rightly deleted.
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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