Income Tax Appellate Tribunal - Jaipur
Jaipur National University , Jaipur vs Joint Commissioner Of Income Tax, Tds, ... on 6 February, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, "A" JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA. No. 870/JP/2018
fu/kZkj.k o"kZ@Assessment Years : 2012-13
Jaipur National University cuke The JCIT,
JNU Campus, Jagatpura, Vs. TDS,
Jaipur. Jaipur.
LFkk;h ys[kk la-@thvkbZvkj l-@PAN/GIR No.: AABTJ 0594 R
vihykFkhZ@Appellant izR;FkhZ@Respondent
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s Assessee by : Shri Vinod Gupta (CA)
jktLo dh vksj ls@ Revenue by : Shri J.C. Kulhari (JCIT)
lquokbZ dh rkjh[k@ Date of Hearing : 19/11/2018
mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 06/02/2019
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Jaipur dated 24.05.2018 for the Assessment Year 2012-13 wherein the assessee has taken following grounds of appeal:-
"1. Impugned order passed u/s 250/271C is bad in law and on facts being against the principal of natural justice and for many more other reasons.
2. Under the facts and circumstances of the case and in law, Ld. A.O. has erred in levying penalty under section 271C of the Income tax Act, 1961 amounting to Rs. 99,850/- on the appellant University for alleged non-deduction of tax at source, Further, 2 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS CIT(A) erred by sustaining the same. The penalty sustained is unjustified, illegal or excessive.
3. Under the facts and circumstances of the case and in law, Ld. A.O. has erred by holding the revenue shared by the appellant University with M/s AD Educational & Research Society, Allahabad in terms of a MOU signed with them in nature of commission paid to them and consequently liable for deduction of tax at source by the appellant University, further, CIT(A) erred by sustaining the same.
2. Briefly the facts of the case are that TDS verification proceedings was carried out at the assessee's premises on 16.02.2012 and during the course of such verification, it was found the assessee had not deducted TDS while making payment to M/s AD Education & Research Allahabad. Thereafter, during the course of proceedings U/s 201(1) r.w.s. 201(1A) of the IT Act, the matter was examined and the Assessing Officer observed that M/s AD Education & Research is acting as a placement cell for the assessee and is helping in procuring various students for enrolment with the University. Therefore, the amount paid by the assessee is a commission for services provided in procurement of students which is liable for TDS U/s 194H of the Act wherein TDS @ 10% should have been deducted by the assessee. Accordingly, demand of Rs. 99,850/- towards short fall in TDS and interest U/s 201(1A) amounting to Rs. 11,781/- was raised on the assessee vide order dated 31.10.2012.
3. In the above factual background, the first contention raised by the ld. AR is that the order passed by the ld. JCIT, TDS is barred by limitation. It was submitted that as per sub-clause (C) of Section 275, 3 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS time limit for passing penalty order is end of financial year in which order is passed i.e. 31.03.2013 or 6 months from the end of month in which action for imposition of penalty is initiated whichever period expires later. It was submitted that in the instant case, ld. DCIT, TDS while passing the order U/s 201(1) r.w.s 201(1A) of the Act dated 31.10.2012 has initiated the penalty proceeding and therefore, the penalty order should be passed latest by 30.4.2013 whereas the order has been actually passed on 29.08.2013. Alternatively, it was submitted that JCIT(TDS) issued the show-cause on 11.01.2013 and based on the same, the penalty order can be passed latest by 31.7.2013. It was accordingly submitted that the order so passed U/s 271C of the Act is barred by limitation and deserves to be quashed.
4. Per contra, the ld. DR has submitted that on perusal of the order passed U/s 201(1) r.w.s. 201(1A), it is clear that a reference was made to the JCIT (TDS) for initiation of penalty proceeding U/s 271C of the Act and therefore, it is not correct that the DCIT (TDS) while passing the order U/s 201(1) r.w.s 201(1A) has initiated the penalty proceeding. It was further submitted that DCIT (TDS) is not an appropriate authority for initiation and levy of penalty U/s 271C of the Act and the appropriate authority is JCIT (TDS), therefore on this account as well, the contention so advanced by the ld. AR deserves to be dismissed. It was further submitted that the DCIT (TDS) made a reference to the JCIT (TDS) for initiation of penalty proceedings on 22.01.2013 and thereafter, notice was issued U/s 271C to the assessee on 11.02.2013 instead of 11.01.2013 as contended by the ld. AR. It was further submitted that there was typing mistake (in terms of date of notice) while issuing the notice and the same was corrected before issuance of 4 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS the notice by the JCIT (TDS), Jaipur, therefore, initiation of penalty proceedings is by way of notice dated 11.02.2013 and given that the order has been passed on 29.08.2013, the same is within the limitation period prescribed U/s 275(1)(C) of the Act. It was accordingly submitted that the contention so advanced by the ld. AR should be dismissed.
5. In his rejoinder, the ld. AR submitted that the provisions contained U/s 271D & 271E are akin to provisions contained U/s 271C particularly authority who can impose penalty under all these sections are same. Therefore principle laid down in the case related to penalty imposed U/s 271D & 271E shall apply mutatis mutandis in the cases related to 271C. It is relevant to note that the Hon'ble Supreme Court had occasion to deal the point that when the period of limitation prescribed U/s 275 shall commence in the case of Commissioner of Income Tax vs. Hissaria Brothers 386 ITR 0719 (SC) (2016) wherein it was held that, " On perusing the judgment of the High Court, it is found that penalty imposed on the respondent herein was also set aside on the ground that the provisions of Section 271-D and 271-E of the Income Tax Act were invoked after six months of limitation and, therefore, such penalty could not have been imposed. Since the outcome of the judgment of the High Court can be sustained on this aspect alone, it is not even necessary to go into other aspects. Leaving the other questions of law open, the appeal is dismissed. There shall be no order as to costs"
It was submitted that in the present case, the penalty order should be passed either upto 31.03.2013 or 30.04.2012 (whichever is later) 5 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS whereas order has been passed on 31.08.2013. Hence barred by limitation and deserves to be quashed.
6. Without prejudice to above, it was submitted by the ld AR that as per sub-clause (C), time limit for passing penalty order is end of financial year in which order passed i.e 31.03.2013 (date of passing of order is 31.10.2012) or 6 months from the end of the month in which penalty proceedings were initiated. In the instant case, Ld. AO has made a reference for imposition of penalty to Ld. JCIT (TDS) vide his letter dated 22.01.2013 as mentioned in the penalty order. The reference is the first step of imposition of penalty. Without reference, no penalty can be imposed, therefore, it is a step which start ball moving and hence initiate the penalty proceeding. The power of imposing penalty vested with JCIT and not initiation. The imposition and initiation is two different activities. Initiation is a step from where any activity start and without doing that nothing can happen and in the instant case i.e. reference by JCIT (TDS) on 22.01.2013. Under the facts and circumstances, order should be passed latest by 31.07.2013 as against 29.08.2013, hence order under consideration is barred by limitation and deserves to be quashed.
7. Further, our reference was drawn to the Co-ordinate Bench decision in case of ACIT vs Subhash Pareta (ITA No. 183/JP/2017 dated 1.09.2017) wherein it was held as under:-
"4. During the course of appellate proceedings before the ld CIT(A), the assessee has drawn support from two decisions of the Hon'ble Rajasthan High Court in case of Hissaria Bros reported in 291 ITR 244 6 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS and subsequent decision in case of Jitendra Singh Rathore reported in 352 ITR 327 which has considered the earlier decision. We refer to the legal proposition which has been laid down by the Hon'ble Rajasthan High Court decision in case of Jitendra Singh Rathore as under:
"7. After having given thoughtful consideration to the submissions made on behalf of the appellant and having examined the record, we are clearly of the view that this appeal remains meritless and the formulated question deserves to be answered against the appellant particularly for the view already taken by this Court in the case of CIT v. Hissaria Bros. [2007] 291 ITR 244/[2008] 169 Taxman 262, wherein, this Court has specifically held as under:-
"38. We are, therefore, of the opinion that since penalty proceedings for default in not having transactions through the bank as required under Sections 269SS and 269T are not related to the assessment proceeding but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under Sections 271D and 271E may have been initiated has no relevance for sustaining or not sustaining the penalty proceedings and, therefore, Clause (a) of Sub-section (1) of Section 275 cannot be attracted to such proceedings. If that were not so Clause (c) of Section 275(1) would be redundant because otherwise as a matter of fact every penalty proceeding is usually initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default e.g. penalty for not 7 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. Either of the contingencies does not affect the computation of taxable income and levy of correct tax on chargeable income; if Clause (a) was to be invoked, no necessity of Clause (c) would arise."
8. In the present case, the notice for issuance of the penalty proceedings under Section 271D of the Act for the alleged contravention of provisions of Section 269SS was issued to the assessee, of course by the AO, on 25.03.2003. Even if the matter had otherwise been in appeal before the CIT(A) against the original assessment order and the appeal was decided on 13.02.2004, the same was hardly of relevance so far the penalty proceedings under Section 271D were concerned. As held by this Court in Hissaria Bros. (supra), completion of appellate proceedings arising out of assessment proceedings has no relevance over sustaining such penalty proceedings. As held clearly by this Court, in such a matter, clause (c) of Section 275 (1) would be applicable. Section 275(1)(c) could be noticed as under:-
"275. Bar of limitation for imposing penalties.
(1) No order imposing a penalty under this Chapter shall be passed- .....
(c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later."8 ITA No. 870/JP/2018
Jaipur National University vs. JCIT, TDS
9. In the present case, the first show cause notice for initiation of proceedings was issued by the AO on 25.03.2003 and was served on the assessee on 27.03.2003. Obviously, the later period also expired on 30.09.2003 when six months expired from the end of the month in which the action for imposing the penalty was initiated. The order as passed by the Joint Commissioner of Income Tax for the penalty under Section 271D on 28.05.2004 was clearly hit by the bar of limitation and has rightly been set aside in the orders impugned.
10. In view of the above, our answer to the formulated question of law is that even when the authority competent to impose penalty under Section 271D was the Joint Commissioner, the period of limitation for the purpose of such penalty proceedings was not to be reckoned form the issue of first show cause by the Joint Commissioner; but the period of limitation was to be reckoned from the date of issue of first show cause for initiation of such penalty proceedings. For the purpose of present case, as observed hereinabove, for the proceedings having been initiated on 25.03.2003, the order passed by the Joint Commissioner under Section 271D on 28.05.2004 was hit by the bar of limitation. The CIT(A) and the Tribunal have, thus, not committed any error in setting aside the order of penalty." (Emphasis supplied)"
"6. In light of above findings of the ld CIT(A) which remain undisputed before us, it is clear that during the course of assessment proceedings, the AO has stated that matter relating to penalty proceedings in respect of violation of section 269SS and 269T are being referred to the 9 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS Additional/Joint CIT. In other words, the AO didn't initiate the penalty proceedings under section 271D and section 271E during the course of assessment proceedings. There is no mention of such proceedings being initiated by the AO in the assessment order. Further, there is no notice under section 271D and section 271E which has been issued by the AO to the assessee by virtue of which such penalty proceedings can be said to have been initiated. In light of the same, we are unable to accede to the contention of the assessee that the date of passing of the assessment order should be reckoned as the date of initiation of penalty proceedings under section 271D and section 271E of the Act. The said view is in consonance with the decision of the Hon'ble Rajasthan High Court in case of Hissaria Bros (supra) and subsequent decision in case of Jitendra Singh Rathore (supra). We accordingly affirm both the order of the ld CIT(A) on this ground and hold that the penalty orders passed under section 271D and section 271E were not barred by limitation. The cross objections filed by the assessee are accordingly dismissed."
8. We have heard the rival contentions and purused the material available on record. In the instant case, the penalty has been levied under section 271C of the Act and for the purposes of determining the limitation period for passing the penalty order, the provisions of section 275(1)(c) are relevant which reads as under:-
"275(1) No order imposing a penalty under this chapter shall be passed-
(a)................
(b)................10 ITA No. 870/JP/2018
Jaipur National University vs. JCIT, TDS
(c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later."
9. On perusal of the order passed by the AO U/s 201(1) r.w.s. 201(1A) dated 31.10.2012, it is clear that a reference was being made to the JCIT (TDS) for initiation of penalty proceeding U/s 271C of the Act and the said reference was actually made vide AO's letter dated 22.01.2013 to JCIT(TDS). Thereafter, the JCIT(TDS) initiated the penalty proceedings u/s 271C by way of issuance of notice dated 11.02.2013 to the assessee and the penalty order u/s 271C was thereafter passed on 29.08.2013 which is well within the limitation period prescribed U/s 275(1)(C) of the Act. The ld AR's contention that the AO while passing the order U/s 201(1) r.w.s. 201(1A) has initiated the penalty proceedings is not found factually correct as there is no notice which has been issued by the AO to the assessee. Secondly, the contention of the ld AR that the initiation of the penalty proceedings should be reckoned from the date when the reference was made by the AO to JCIT(TDS) cannot again be accepted as the initiation of such proceedings have to be by way of issuance of a notice to the assessee and not by mere reference from the AO to JCIT(TDS). The decision of the Hon'ble Supreme Court in case of Hissaria Brothers is in context of applicability of clause (c) to sub-section (1) to section 275 which is not in dispute as far as present case is concerned. Further, the decision of Coordinate Bench in case of Subhash Pareta doesn't support the case of 11 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS the assessee as in that case also, the AO didn't initiate the penalty proceedings and the first notice was issued by Add. CIT only initiating the penalty proceedings and thereafter, the order was passed within the prescribed limitation period. In light of above discussions, we are of the considered view that the impunged order is not barred by limitation and the contentions so advanced by the ld AR in this regard are not found acceptable.
10. Now coming to the contention of the ld. AR on merits. It was submitted by the ld AR that the assessee is a University which is engaged in the field of education and runs various educational and professional courses. As part of its educational activities, the assessee has entered into a memorandum of understanding with M/s AD Education & Research as per which broadly following services are provided:
a. Search and recommend suitable institutions with required infrastructure and facilities to be established as IACC for consideration by the University. Application for the appointment of Information Admission Counseling Centre shall be forwarded by the SERVICE PROVIDER along with a demand draft of Association Fee payable to "Directorate of Distance Education, Jaipur National University, Jaipur, Rajasthan, payable at Jaipur.
b. Provide both expert and marketing services to University in opening Information Admission Counseling Centre and smooth conduct of admission counseling for various academic course (as mentioned in Annexures-1 of this MOU) run under distance Education mode.12 ITA No. 870/JP/2018
Jaipur National University vs. JCIT, TDS c. Dispatch the course material to Information Admission Counseling Centre. In the event of failure, in this regard, the entire cost of reproduction by Information Admission Counseling Centre will be borne by the service provider.
d. Ensure that the prospectus provided by the University, study materials and other such required materials are being sent to different Information Admission Counseling Centre on time and all cost of transit of such material will be borne by the service provider.
e. Carry out function such as processing of IACC establishment application, distribution of study material etc. f. Shall provide and put serious efforts for the suitable job placement of successful course participants.
11. It was submitted that on perusal of the MOU, it shows that payment has been made on the basis of revenue sharing. It was submitted that it is a collaboration agreement, wherein University, service provider and an IACC have entered into a business module on revenue sharing basis for imparting education and therefore, all constituents acted in their own behalf and not acted as agent of each other. It was submitted that the amount paid by the assessee is part of revenue in respect of services provided to the students. In support, reliance was placed on the Coordinate Bench decision in case of ITO vs. Rajasthan Knowledge Corporation Limited (ITA No. 38 to 40/JP2013 13 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS dated 13.02.2015). It was further submitted that in spite of the bonafide belief that payment was not subjected to TDS, after TDS verification proceedings were completed, the assessee has not disputed the tax demand and has paid TDS alongwith interest on 09.01.2013, therefore, at the time of issuance of the show cause notice for penalty by JCIT(TDS), there was no failure in compliance of Chapter XVII and even all the facts were disclosed and found documented even during the survey. In support reliance was placed on the Coordinate Bench decision in case of M/s M.D.S. University, Ajmer (Rajasthan) vs. ACIT(TDS) order dated 23.01.2014. It was further submitted that except this transaction, other transactions undertaken by the assessee have been found to in due compliance with the provisions of the Act, however, because of bonafide belief that the subject transaction was not subject to TDS, the assessee has not deducted TDS on the said transaction. However, the fact remains that the assessee is a law abiding corporate citizen and the transaction was not considered liable for TDS on reasonable belief and not because of any contumacious conduct. In support, reliance was placed on the decision of the Hon'ble Supreme Court in case of CIT vs. Bank of Nova Scotia (Civil Appeal No. 1704 of 2008 order dated 07.01.2016) wherein it was held as under:-
"11. We have carefully considered the rival submissions. In the instance case we are not dealing with collection of tax u/s 201(1) or compensatory interest u/s 201(1A). The case of the assessee is that these amounts have already been paid so as to end dispute with Revenue. In the present appeals we are concerned with levy of penalty u/s 271-C for which it is necessary to 14 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court have deleted levy of penalty u/s 271-C in the case of M/s Itochu Corporation, reported in 268 ITR 172 (Del) and in the case of CIT vs. Mitsui & Company Ltd. reported in 272 ITR 545. Respectfully following the aforesaid judgments of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee's appeal and cancel the penalty as levied u/s 271-C."
12. Further, placing relying on the provisions of Section 273B of the Act and various Courts decision it was submitted by the ld AR that the non deduction of TDS was due to bonafide belief and therefore, there was reasonable cause for non-deduction of TDS and hence, penalty so imposed and confirmed by the ld. CIT(A) should be deleted.
13. Per contra, the ld. DR is heard who has relied on the findings of the lower authorities and submitted that the assessee is well established in the field of education and it cannot claim to be a man of average intelligence acting under normal circumstances. It was accordingly submitted that there is no reasonable cause for non deduction of TDS hence, the penalty levied by the Assessing Officer should be confirmed.
14. We have heard the rival contentions and perused the material available on record. The case of the Revenue is that the assessee has paid commission to M/s AD Educational & Research for services provided in respect of procurement of students and such commission is 15 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS liable for TDS u/s 194H and given the failure of the assessee to deduct the TDS u/s 194H, the assessee is liable for penalty u/s 271C of the Act. The case of the assessee is that such payment is akin to sharing of revenues in form of fees collected from the students and the payment to M/s AD Educational & Research is not in the nature of commission liable for TDS u/s 194H of the Act. In order to appreciate the rival contentions, we refer to the memorandum of understanding entered into by the assessee with M/s AD Educational & Research Society (referred to as Service provider). In the preamble to the said MOU, it is provided that the assessee is desirous of taking the expert services of the service provider to run certain academic courses of study under distance education mode. Thereafter, the financial terms are stated in Para 2 of the said MOU which reads as under:-
"2. Financial terms The Jaipur National University, Jaipur, Rajasthan, shall collect Association fee from the newly established 'Information-Cum-Admission Counseling Cell' (IACC) and course fee from the students enrolled in different academic courses.
a. The Association Fee collected from the newly established IACC shall be shared as under:
University 50%
Service provider 50%
b. The university shall collect the course fee (including examination fee) and Misc. fee from each student per year:
- 50% of course fee shall be paid by University to the IACC for providing adequate and necessary infrastructure and facilities.16 ITA No. 870/JP/2018
Jaipur National University vs. JCIT, TDS
- 20% of course fee shall be paid to the service provider by university for rendering services as mentioned in this MOU.
- 30% of the course fee shall be retained by the university at its end.
- The service provider shall furnish a security deposit of Rs. 1.00 lakh and shall not claim any interest thereon.
- The security amount shall be adjusted against any default committed by the service provider under this MOU.
- The security deposited or the remaining amount thereof will be refunded to the service provider at the end of the term of the MOU provided that university shall reserve all its rights against the service provider notwithstanding the above."
Thereafter, in Para 9, the role of the service provider has been described in detail as under:-
"9. Role of the service provider:
The service provider shall:
a. search and recommend suitable institutions with required infrastructure and facilities to be established as IACC for consideration by the university. Application for the appointment of information Admission Counseling Centre shall be forwarded by the Service provider along with a demand draft of Association Fee payable to "Directorate of Distance Education, Jaipur National University, Jaipur, Rajasthan, payable at Jaipur.
b. Provide both expert and marketing services to University in opening information Admission Counseling Centre and smooth conduct of 17 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS admission counseling for various academic courses (as mentioned in Annexure-1 of this MoU) run under Distance Education mode. c. Conduct no activity which shall be competitive or detrimental to the interest of the University.
d. Dispatch the course material to information Admission Counseling Centre. In the event of failure in this regard the entire cost of reproduction by information Admission Counseling Centre will be borne by the service provider.
e. Ensure that the prospectus provided by the University, study materials and other such required materials are being sent to different information Admission Counseling Centre on time and all cost of transit of such material will be borne by the service provider. f. Seek prior approval of University of all the promotional material including design of art work to be published through print media, maintain complete records of all prospectuses sold and the students enrolled both in soft copy and heard copy.
g. Promote with prior approval of the university, academic courses through publishing Admission Notice, articles and other news items in important newspapers of the country.
h. Not to make any financial commitment on behalf of or in the name of the university nor will take loans or create any other financial liability binding on the University this MoU.
i. Help monitor the functioning of IACC.
j. Carry out functions such as, processing of IACC establishment applications, distribution of study material etc. 18 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS k. Undertake to maintain the secrecy and confidentiality of the programmes offered by the University, mode of instructions and its methods, syllabi and programme curricula etc. l. Shall provide and put serious efforts for the suitable job placement of successful course participants."
15. We therefore find that services so specified in the MOU ranges from selection of IAAC Centres, promotion of academic courses, co- ordination in supply and dispatch of course material, other study material, maintenance of records of students which have bought the prospectus and subsequently enrolled for the various courses. For such services, the service provider is entitled to share of "association fees" to the extent of 50% and 20% of course fees. Therefore, it cannot be disputed that there is sharing of revenues by the assessee with the service provider to the extent of 50% of association fees and 20% of course fees. In the MOU, there is reference to scope of services to be rendered by the service provider and prima facie, it gives an impression of rendering of services. However, at the same time, we find that through the MOU, there is pooling of academic resources of the University with the marketing resources of the service provider whereby the virtual footprint of the University has been envisaged to be expanded through distance education programmes and setting up of IAACs in close association with the service provider. To our mind, looking at the terms of the MOU whereby the assessee has agreed to share fees as high as 50% of association fees and 20% of course fees with the service provider, the said payment seems to be more in the nature of revenue sharing rather than payment of commission for services rendered by the service provider. Therefore, it cannot be held 19 ITA No. 870/JP/2018 Jaipur National University vs. JCIT, TDS conclusively that such payments would surely fall in the definition of commission so defined in section 194H of the Act. To our mind, it is clearly a debatable issue and on such issue, levy of penalty for non- deduction of TDS cannot be justified. Therefore, the explanation of the assessee that it was under a bonafide belief that such payments doesn't call for TDS thus cannot be disputed. It is also noted that subsequent to TDS verification by the Department when such matter was pointed out to the assessee, the latter has complied with the same by depositing appropriate TDS along with interest. As held by the Hon'ble Supreme Court in case of Nova Scotia (supra), for levy of penalty u/s 271-C what is necessary is to establish that there was contumacious conduct on the part of the assessee which, we find, is not present in the case of the assessee. In light of above discussions and keeping in view the provisions of section 273B of the Act, the penalty so levied u/s 271C is hereby directed to be deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on 06/02/2019.
Sd/- Sd/-
¼fot; iky jko½ ¼foØe flag ;kno½
(Vijay Pal Rao) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:- 06/02/2019.
*Santosh
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Jaipur National University, Jaipur.
2. izR;FkhZ@ The Respondent- JCIT, TDS, Jaipur.20 ITA No. 870/JP/2018
Jaipur National University vs. JCIT, TDS
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
xkMZ QkbZy@ Guard File { ITA No. 870/JP/2018} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar