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Showing contexts for: 271C in State Bank Of India Local Head Office ... vs Addl Commissioner Of Income Tax(Tds) ... on 11 February, 2026Matching Fragments
This is an appeal filed by the Assessee against the order of the Ld. CIT(A)/NFAC, Delhi dt. 11/06/2025 for the Assessment Year 2016-17.
2. In the present appeal Assessee has raised the following grounds:
1. The impugned order is both against facts and erroneous in law.
2. On the facts and circumstances of the case the Ld.CIT(Appeals) NFAC has erred in having confirmed the order of the Ld.AO imposing penalty of Rs.17,23,630/- u/s 271C of the Income Tax Act.
3.1 The Assessing Officer was of the view that exemption under section 10(5) of the Act is available only in respect of travel to any place in India and not for foreign travel. Accordingly, the assessee was treated as an assessee in default under sections 201(1) and 201(1A) of the Act for non-deduction of tax at source, resulting in demand of tax and interest. Subsequently, the Addl. Commissioner of Income Tax (TDS), Chandigarh initiated penalty proceedings under section 271C of the Act and levied penalty equal to the amount of tax allegedly not deducted. Aggrieved by the levy of penalty, the assessee carried the matter in appeal before the CIT(A).
4.1 The CIT(A) further held that penalty under section 271C is a civil liability and mens rea is not required for its imposition. It was observed that the burden to establish reasonable cause under section 273B lies entirely on the assessee and that the assessee failed to demonstrate any reasonable cause which prevented it from deducting tax at source. The plea based on interim orders of the Hon'ble Madras High Court was rejected on the ground that statutory obligation under section 192 remained unchanged. Accordingly, the CIT(A) confirmed the penalty levied under section 271C and dismissed the appeal.
7.4 Accordingly, the Ld. DR prayed that the order of the Ld. CIT(A), NFAC confirming the penalty under section 271C be upheld and the appeal of the assessee be dismissed.
8. We have heard the rival submissions and perused the material available on record. We find that the issue involved in the present appeal, namely levy of penalty under section 271C of the Act for failure to deduct tax at source on LTC/LFC payments relating to foreign travel, is squarely covered by the decision of the Hon'ble Supreme Court in the assessee's own case, which has been duly relied upon by the Ld. CIT(A), NFAC while passing the impugned order.