TaxTMI 
TaxTMI 
2011 (3) TMI 239
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....der. 2. These appeals arise out of the assessment years 2002-03 (ITA No. 429/2009), 2003-04 (ITA No. 1397/2008) and 2004-05 (ITA No. 1398/2008). The assessee herein is engaged in the business of manufacture and sale of Chocolates, Bournvita, etc. A spot verification under Section 133A of the Income Tax Act (hereinafter, in short referred to as „the Act‟) on the premises of the assessee was conducted, which revealed that the assessee had engaged ten Clearing & Forwarding Agents (hereinafter, in short referred to as „CFA‟) and was paying rent for the usage of space in warehouse and deducting tax at source under Section 194C of the Act. The assessee was also deducting TDS @2% under Section 194C of the Act on rem....
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....s that the same was done on the advice of the Professional Advisors being CA, Advocate, etc. However, inspite of specific repeated requests, copy of such opinion was not placed on record. This compels me to infer that this is a misstatement made by the assessee. 4.5. Further, the provision of 194I, 194J and 194C are quite clear and leave no ambiguity. Nor was there any doubt in the mind of the assessee. The default was a conscious decision to deduct Tax at Source at a lower rate / not deduct Tax at Source at all. And since it was not bonafide, the assessee has to account for the consequences. 3. The CIT(A) referred to various judgments of different High Courts and that of the Supreme Court and dealt with the arguments of bot....
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....payment to hotel, assessee did not deduct TDS u/s 194-I. In response to the show cause notice, the assessee claimed that there was a confusion in definition and its applicability of the provisions of 194-I, which was later on clarified by circular No. 715 dated 8.8.95 issued by CBDT. The assessing officer, however, levied penalty u/s 271-C. On appeal it was held that there was a sufficient cause of such short deduction of tax. This view of the ld appellate Commissioner was affirmed by the Tribunal. In the present appeal also the penalty was levied due to difference of opinion. During arguments, plea was also raised on behalf of the revenue, that the quantum appeal has become final and no appeal has been preferred by the assessee, therefore,....
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....led by the revenue in the penalty proceedings wherein the impugned order came to be passed by the Tribunal as noted above. So far as the facts of the case are concerned, there is no dispute that the composite agreement was made by the assessee with CFAs for storage, leading, unloading, clearing, forwarding and supply of manpower for the jobs as per requirement of the assessee. There is also no dispute that the assessee had been consistently following the practice of deducting TDS under Section 194C. There is also no dispute that the deductions were required to be made by the assessee under Section 194I and 194J for the payments being made by the assessee under different heads to the CFAs. The learned counsel for the assessee submitted that ....
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.... SOT (Del), Woodward Governor India P. Ltd v. CIT (2002) 253 ITR 745 (Del), CIT v. Itochu Corporation (2004) 268 ITR 172 (Del), CIT v. Lurgi Oil Gas Chemie Gmb (2004) 141 Taxman 348 (Del), CIT v. NHK Japan Broadcasting Corp., (2006) 284 ITR 357 (Del) CIT v. Japan Radio Co. Ltd. (2006) 286 ITR 682 (Del) and OMEC Engineers v. CIT (2007) 294 ITR 599 (Jharkhand). 6. We need not to refer to all the aforecited judgments since the ratio in all of them is similar. However, we may refer to the decision of Woodward (supra) of the Division Bench of our High Court, wherein the words and phrases „reasonable cause‟ in Section 273B of the Act which provides the provision of imposition of penalty in certain cases came to be explained. I....