2014 (5) TMI 810

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....als, are as under:            "1. Whether on the facts and in the circumstances of the case, the Learned CIT(A) was correct in cancelling the penalty u/s 271C following the decision of Hon'ble ITAT, Jodhpur in I.T. Act, 1961 No. 25/Jodh/2012 dated 31/07/2013 without considering the fact that the assessee deductor was liable to deduct TDS u/s 194J on payment made for services rendered involving service of skilled manpower and to deduct TDS u/s 194I of I.T. Act on rent paid for hiring crane." 2. Facts of the case in brief are that the Assessing Officer levied the penalty u/s 271C of the I.T. Act, 1961 (hereinafter referred as the Act) on the basis that the assessee was held defaulter u/s....

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....le contract works". The authority passing such impugned order invoked section 194I in relation to certain payments made to two parties for use of their cranes. It was further submitted that the appellant had preferred appeal before CIT(A), who by order dated 31/10/2011 uphold the applicability of section 194J and 194I instead of section 194C. However, he deleted the demand on account of difference of TDS amount as the deductee contractor has filed the return of total income after payment of due taxes. This order of CIT(A) was further challenged before the Hon'ble ITAT, Jodhpur Bench, Jodhpur, who vide their order dated 31/7/2013 allowed the quantum appeal of the appellant company. The appellant has furnished he copy of such order of the....

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....alty imposed in itself become infructuous. The penalty dated 7/6/2012 passed is hereby annulled. The grounds of appeal are allowed." 5. On the similar reasoning, the penalty levied u/s 271C of the Act for the A.Y. 2009-10 was also deleted. Now the department is in appeal. 6. The learned counsel for the assessee at the very outset stated that the very basis on which the impugned penalties were levied by the Assessing Officer did not remain in existence because the issue has been decided by the ITAT in favour of the assessee while deciding the quantum of appeals in ITA No. 24 & 25/Jodh/2012 for the A.Y. 2008-09 and 2009-10 vide order dated 31/7/2013. Therefore, the learned CIT(A) was fully justified in deleting the penalty levied by the Ass....