AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (1) TMI 1838
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.... 1. The impugned penalty order u/s. 271C of the Act dated 18/08/2010 is bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence, the same kindly be quashed. 2. The impugned penalty order u/s. 271C of the Act dated 18/08/2010 is bad in law and on facts of the case, being barred by limitation hence, the same kindly be quashed. 3. Rs. 1,79,309/-: The Ld. CIT(A) erred in law as well as on the facts of the case in confirming the impugned penalty u/s. 271C of the Act of Rs. 1,79,309/-. The penalty so imposed & confirmed being totally contrary to the provisions of law and facts kindly be deleted in full. 4. The appellant prays your honour indulgences to add, amend or alter ....
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....Being aggrieved, the assessee carried the matter to the Ld. CIT(A), who confirmed the penalty by observing in para 3.3 & 3.4 of the impugned order which read as under:- 3.3a The appellant allotted construction work to RSRDC by a memorandum of understanding. Thus there was a contract between the appellant and RSRDC. b. Appellant made payment of Rs. 79,13,000/- to RSRDC during the F.Y. 2007-08 without making TDS. c. As per sec. 194C(1) any person responsible for paying any sum in pursuance of a contract is required to deduct tax. Therefore, the appellant was also liable to deduct tax on the sum of Rs. 79,13,000/-. d. Sec. 196 specifies that TDS is not required to be made if the payment is made to: ....
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....initiated are completed". It was contended that in this case, the relevant proceedings were commenced on 29/03/2009 and the financial year ends on 31/03/2009. It was further stated that the penalty could not have been imposed from the end of the month, in which action for imposition of penalty was initiated, which in the present case was on 24/12/2009. Therefore, the penalty could have been levied before 30/06/2010, however, in this case it was levied on 18/08/2010, so, it was barred by limitation. Reliance was placed on the following case-laws:- 1) Mitsui & Company Ltd. Vs. DCIT: (1999) 65 TTJ 1 (Del) 2) L.G. Electronics Inc. Vs. ACIT (2004) 84 TTJ 1029 (Del) 3) CIT Vs. Jitendra Singh Rathore (2013) 257 CTR 18 (R....
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....of the Act on 19/03/2009 and initiated penalty proceedings under section 271C of the Act. The time limit for levying penalty has been prescribed in section 275(1)(c) of the Act and the relevant provision reads as under:- 275(1) No order imposing a penalty under this Chapter shall be passed- (a) x x x (b) x x x (c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated whichever period expires later. 6. In the instant case, the proceedings for levying the penalty under section 271C was in....
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....accepted. Later on, the assessee deducted the TDS and the same was deposited on 06-03-2009. We observe that on the date of levy of penalty not only the entire amount of TDS was deducted and deposited but also the interest on account of delay in deduction of tax, u/s. 201(A) was levied and paid. In view of the above facts, the ld. CIT(A) has held that there was a reasonable cause for failure to deduct TDS as the assessee was under the impression that it was not liable to deduct the TDS and accordingly the liability to deduct TDS was a debatable one, on which there could be two opinions. In view of the above, the ld. CIT(A) held that this is not a suitable case for levy of penalty u/s. 271C of the Act. 2.2. On consideration of facts ....