High Court having dismissed the appeal filed by the Department under s. 260A on the question whether the assessee was entitled to plead reasonable cause for not depositing TDS, on the ground that no question of law arose, order dt. 5th Sept., 2007, passed by the Supreme Court is modified to the extent that the order of the High Court is set aside and the appeals are remitted to the High Court for its decision in accordance with law.

This I.A. is for addition of a sentence in the order dated 5th September, 2007 passed by this Court. The order shall now read as follows:

"Delay condoned.

Leave granted.

The short point which arises for consideration in these Civil Appeals is whether the High Court was right in dismissing the appeal filed by the Department under Section 260A (of Income Tax Act, 1961) on the ground that no question of law arose in the present case.

In this case, after the survey, the tax deducted has been deposited with the Government. Therefore, in our view, the question of law which arise for determination is whether the assessee was entitled to plead reasonable cause for not depositing the tax. Moreover on page 88 of the paperbook there is a finding that TDS was deducted from the salary paid to the expatriate employee. The survey was conducted under Section 133A (of Income Tax Act, 1961). The impugned order is accordingly set aside and Income Tax Appeals No.380, 391, 392 and 393 of 2003 are remitted to the High Court for its decision in accordance with law.

The Appeals are allowed. No costs."

Parties agreed that the matter may be listed for directions before the High Court in the second week of January, 2008. I.A. is disposed of accordingly.

(S.H. KAPADIA)

(B. SUDERSHAN REDDY)

New Delhi,

December 10, 2007.