TaxTMI Login
Just a moment...
AI-powered research trained on the authentic TaxTMI database.
Press 'Enter' to add multiple search terms. Rules for Better Search
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
<h1>Non-deduction of TDS on payments to related foreign enterprises treated as bona fide dispute; penalty deleted on precedent</h1> Penalty proceedings under the tax penalty provision for failure to deduct TDS were quashed where non-deduction concerned payments to foreign associated ... Penalty u/s 271(1)(c) - non-deduction of TDS on payments made to the assessee’s US based associated enterprises - disallowance u/s 40(a)(ia) - HELD THAT:- This is for the precise reason that hon’ble apex court landmark decision in CIT vs. Reliance Petroproducts (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT] has settled the issue long back that such a quantum disallowance/addition does not ipso facto attract the impugned penalty proceedings since involving bonafide claim. We adopt the very reasoning mutatis mutandis herein as well to conclude that once the issue of non-deduction of TDS was a debatable one during assessment which was finally accepted at the assessee’s behest would neither attract concealment nor that of furnishing of inaccurate particulars of income. Penalty to be deleted. Assessee appeal allowed. Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 can be sustained where the disallowance under Section 40(a)(ia) of the Income-tax Act, 1961 arose from a debatable bonafide claim regarding non-deduction of TDS.Analysis: The Tribunal examined whether the levy of penalty under Section 271(1)(c) was justified in respect of disallowance under Section 40(a)(ia) that stemmed from payments to US-based associated enterprises and an issue on deduction of TDS that was arguable at assessment. Reliance was placed on controlling precedent establishing that where a disallowance/addition arises from a bona fide and debatable claim, it does not ipso facto attract penalty under Section 271(1)(c) as involving concealment or furnishing of inaccurate particulars of income. Applying that principle to the facts, the disallowance was held to be debatable and a bona fide claim, not amounting to concealment or inaccurate particulars.Conclusion: Penalty under Section 271(1)(c) of the Income-tax Act, 1961 is deleted; decision is in favour of the assessee.
TaxTMI 
TaxTMI 
