TaxTMI 
TaxTMI 
2015 (11) TMI 630
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....eal is against the deletion of penalty levied under section 271C of the Income-tax Act 1961. 3. Briefly stated during the impugned assessment year the assessee had not deducted tax at source under section 194A on interest payment. The Assessing Officer levied penalty under section 271C of the Income-tax Act, 1961, of Rs. 19,70,098, equal to the amount of tax which the assessee had failed to deduct as required under the provisions to Chapter XVII-B of the Act. 4. In appeal before the Commissioner of Income-tax (Appeals) the penalty was deleted vide order dated September 18, 2014, by holding at para 4 of the order as follows : "4. Learned counsel for the appellant has clarified that the interest had been paid in this case to the PEC ....
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....d by the learned Commissioner of Income-tax (Appeals), for the reason that the assessee had paid interest to a society registered under the Societies Registration Act, 1860 and financed wholly by the Government and therefore, as per section 194A(3)(iii)(f) read with notification No. SO 3489 dated October 22, 1970, it was not required to deduct tax at source on the interest paid to the society. The Departmental representative stated that since it has not been proved whether the society is wholly financed by the Government or not, it is not eligible to claim the benefit of the notification as stated above. 7. We have heard the representative of the Department and perused the orders of the authorities below and also the documents placed bef....
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.... 10 and who are statutorily not required to file return of income as per the provisions of section 139 are : (i) 'local authority', as referred to in the Explanation to clause (20); (ii) Regimental fund or non-public fund established by the armed forces of the Union referred to in clause (23AA) ; (iii) Fund, by whatever name called, set up by the Life Insurance Corporation of India on or after 1st August, 1996, or by any other insurer referred to in clause (23AAB) ; (iv) Authority (whether known as the Khadi and Village Indus tries Board or by any other name) referred to in clause (23BB) ; (v) Body or authority referred to in clause (23BBA) ; (vi) SAARC Fund for Regional Projects set u....
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.... 10. Point No. (ix) refers to any university or other educational institution referred to in sub-clause (iiiab) of clause (23C) of section 10. PEC University the payee in the present case being exempt under section 10(23C)(iiiab) is therefore eligible to receive any payment without any tax deduction at source. In such circumstances the assessee was not required to deduct tax at source on the interest payment made. 11. Further as per the provisions of section 194A(3)(iii)(f) no tax is to be deducted at source on income by way of interest which are credited or paid to such other institutions, association or body which the Central Government may notify in this behalf in the special gazette. For the purpose of section 194A(3)(iii)(f) Noti....