2006 (3) TMI 65

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....e, the assessee was liable to suffer a penalty in terms of section 271(C) of the Income Tax Act, 1961. Penalties for the financial years 1991-92 to 1998-99 were accordingly imposed upon the respondent-assessee, Sencma, India. Similarly, penalties for the financial years 1989-90 to 1998-99 were imposed upon the respondent-assessee, Sencma, France. 2. Aggrieved by the said orders, the respondents-assessees appealed to the Commissioner of Income-tax (Appeals), inter alia, contending that the assessees were under a bona fide belief that salaries paid to expatriate employees outside India was not taxable and that no deduction at source was required to be made by the office that was making the said payment. It is also urged that non-deduction ....

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.... the cases at hand. Following the view taken in the said cases, the Tribunal held that the levy of penalty was not justified. It, accordingly, dismissed the appeals filed with the Revenue, while allowing those filed by the respondents-assesees. The present appeals filed by the Revenue assail the correctness of the said order. 4. We have heard at considerable length Mr. Jolly, counsel appearing for the Revenue and perused the record. The Tribunal has on consideration of the facts and circumstances of the cases and relying upon the decisions rendered by it earlier, some of which have even met the approval of this Court in appeal, held that the non-deduction of tax at source by the assesses from out of the salaries paid to the expatriate em....