2016 (8) TMI 822

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.... WITH MRS SWATI SOPARKAR, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. This Tax Appeal u/s.260A of the Income-tax Act, 1961 is filed against the order dated 17.04.2009 passed by the Income Tax Appellate Tribunal, Ahmedabad in ITA No.615/Ahd/2007 raising the following substantial question of law for our determination: "Whether the Appellate Tribunal is right in law....

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....the shortfall of Rs. 20,00,312/, the assessee was treated as defaulter. Interest u/s.201(1A) was calculated and penalty equivalent to the amount of tax deductible on the basis of the provision as on 31.03.2005 was levied u/s.271C of the Act. Thereafter, the ACIT (TDS), Baroda passed order u/s.201(1) on 28.02.2006 and order u/s.201(1A) of the Act on 02.03.2006. The penalty order u/s.271C of the Act....

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....f no reasonable cause is shown by the assessee for its failure to deduct tax. Of course, the burden of proving such "reasonable cause" is on the assessee. The assessee's case is that it was under a bona fide belief that the amounts credited to the provisions did not represent income accrued to the Nonresident Company and therefore, it did not deduct tax. It had voluntarily paid TDS in October 2005....

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....ght that its own determination of what would be the income of the Canadian and UK Companies were not conclusive of its liability to deduct tax from the provisions. Such belief appears to have been held by the assessee bona fidely. The bona fide belief is fortified when the assessee deducted and paid tax in October 2005 when it received invoices and remitted the service charges. In respect of the U....