The assessee, a Nagar Palika Parishad, failed to collect tax at...

The assessee, a Nagar Palika Parishad, failed to collect tax at source (TCS) on payments received for granting a license for a parking lot. However, the assessee contended that the money collected was on behalf of the government and expended for the welfare of citizens. As a non-profit organization, the assessee faced constraints in understanding tax laws and did not receive advice on TCS collection. Upon being informed of the default, the assessee swiftly complied. Considering these circumstances, the Appellate Tribunal held that the assessee cannot be treated as an assessee in default per se, and there existed reasonable cause for the technical default. Consequently, the penalties imposed u/ss 271CA and 271C were deleted, and the assessee's appeal was allowed.