Commr.Of Income Tax-Xviii,Delhi vs Bank Of Nova Scotia on 7 January, 2016
6. After considering the rival submission and on perusal
of the relevant findings given in the impugned orders, we find
that on the issue of reasonable cause u/s.273B, assessee
does has a prima facie case, because as per the CBDT
Circular No. 275 dated 21.09.1994, it has been clarified that
I.T.A. No.2713/DEL/2016 6
responsibility for making deduction tax at source u/s.194A
should be that of Collector (Land Acquisition) or any authority
empowered under the Land Acquisition Act, 1894 who
acquires the land for the public purpose. When concerned
parties whose land has been acquired, go to the Court of law
seeking higher compensation with interest and if the court
allows the claim then the concerned authority which had
acquired the land, shall, while paying the compensation
deduct tax at source on the amount of interest bearing part of
the compensation and deposit the remaining amount with the
court of law with disbursement to the successful litigant.
Hence the same authority was required to issue TDS
certificate to the concerned parties. As per the documents
submitted by the assessee before the authorities below, the
assessee has filed the proof that the payment was not made
in the name of land owner but was made in the name of
Special Judge, Ghaziabad. Apart from that, assessee have
being a State Government Authority had made the payments
in the name of Special Judge, Ghaziabad and not to any
person directly on which TDS was to be deducted. Under
these circumstances it cannot be held that non deduction of
TDS was intentional and there was no reasonable cause.
Once there is a bonafide dispute as to who is liable to deduct
TDS, then it cannot be held that there is a contumacious
conduct on the part of the assessee, in view of the principle
laid down by the Hon'ble Supreme Court in the case of CIT
vs. Bank of Nova Scotia (supra) wherein it has been held
I.T.A. No.2713/DEL/2016 7
that in absence of any finding that the assessee had
deliberately avoid the TDS provision and there is no
contumacious conduct on the part of the assessee then no
penalty could be levied. Accordingly, the penalty levied by the
ld. Assessing Officer is deleted on the ground that there was
bona fide and reasonable cause in not deducting the TDS.
Thus, this ground of the assessee is allowed.