Sec. 108 of the Finance (No. 2) Act, 2004 — Penalty - Revenue filed Tax Appeal against the order of Tribunal in deleting the penalty levied under Section 105(a) of the Securities Transaction Tax (STT) falling under Chapter VII of Finance (No.2) Act, 2004. High Court dismissed the revenue’s appeal holding that ”A careful and conjoint reading of the two provisions i.e. Sections 105 and 108 make it clear that imposition of penalty is to be proceeded separately as a separate proceeding. Merely because in the assessment order the AO comes to a conclusion that the assessee had failed to collect the STT or had failed to pay such STT to the credit of the Central Government, it would not ipso-facto lead to imposition of penalty. Once such a conclusion is reached, the assessee is required to be provided reasonable opportunity of hearing and during the hearing if the assessee can prove that there was reasonable cause for such failure, no penalty shall be imposed“. - PR. CIT V/s NATIONAL STOCK EXCHANGE - [2020] 272 TAXMAN 144 (BOM)