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Showing contexts for: 271C in Ito, Tds, Ward-74(1), New Delhi vs Delhi Police, New Delhi on 20 January, 2023Matching Fragments
These appeals filed by the Revenue is directed against the order dated 31.07.2019 of the Ld. CIT(A), New Delhi, relating to Assessment Year 2011-12.
Revenue Appeal ITA No. 8064/Del/2019
2. The ground of appeal raised by the revenue read as under:-
1. That on the facts and circumstance of the case that the Ld. CIT(A) has erred in deleting the penalty levied u/s. 271C as penalty levied is consequential in nature to the order passed u/s. 201(1)/201(1A) for default for short/non-deduction in the Ld. CIT(A) order 187/15-16/18-19/4088 dated 22.07.2019 and second appeal is being filed to ITAT against the said Ld. CIT(A) order.
3. The learned Senior Departmental Representative supporting the assessment order submitted that the AO was right in imposing u/s. 271C of the Income Tax Act 1961, because the deductor assessee has failed to deduct TDS in accordance with the provision of chapter xvii-b of the Act. He further explained that the assessee deductor was under statutory obligation to deduct TDS on the payments on hiring and there was no reasonable cause for non deduction of such due TDS therefore the AO was right imposing penalty u/s. 271C of the Act.
4. Replying to the above the learned assessee representative vehemently supporting the first appellate order submitted that the AO impose penalty u/s. 271C of the Act, without considering the entire facts and circumstances of the case which was rightly deleted by the Ld. CIT(A) by holding that it is not clear at all as to with regard to what payments the appellant did not deduct tax at source and when the AO himself is not sure at all, there is no question of levy of penalty u/s. 271C of the Act. The learned AR also submitted that the Ld. CIT(A) has rightly noted that the appellants conduct is not contumacious penalty cannot be levied u/s. 271C of the Act, as per judgment of Hon'ble Supreme Court in the case of CIT vs. Bank of Nova Scotia 380 ITR 550 (SC) and judgement of Hon'ble jurisdictional Delhi High Court in the case of CIT vs ITOCHU Corp., reported as 268 ITR 172 (Delhi) and CIT vs. Mistui & Co. Ltd., reported as 272 ITR 545.
In view of the aforesaid analysis, I am of the view that penalty amounting to Rs. 1,77,99,890/-, levied u/s 271C of the Income Tax Act, 1961 deserves to be deleted.
11. Since the penalty has been deleted, the appellant's additional ground/grievance of penalty being barred by limitation is not being considered. In final analyses, the appellant succeeds in appeal.
6. On careful and logical analysis of the basis taken by the AO for imposing penalty u/s. 271C of the Act and findings recorded by the Ld. CIT(A) for deleting said penalty. First of all we are in agreement with the Ld. CIT(A) that the AO himself was not sure at all as to with regard to what payments the assessee failed to deduct TDS at source. When the AO himself was not sure about the omission or non-compliance of TDS provision by the assessee then the penalty u/s. 271C of the Act cannot be held as sustainable. In the case of CIT vs. Bank of Nova Scotia (supra) the Hon'ble Supreme Court held that when the appellant's conduct is not contumacious then the penalty cannot be levied. This preposition has been consistently followed by lower authorities and Hon'ble jurisdictional High Court of Delhi in the case of CIT vs. ITOCHU Corp (supra) and CIT vs. Mistui & Co. Ltd., (supra). Therefore we are unable to see any valid reason to interfere with the findings arrived by the Ld. CIT(A) and thus uphold the same resultantly appeal of revenue ITA no. 8064/Del/ 2019 is dismissed.