2019 (7) TMI 601

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....imitation u/s 275 of the Act. 2. The Appellant prays that, the penalty order, being time barred be annulled/set aside as being ab-initio void and bad in law. WITHOUT PREJUDICE TO GROUND I GROUND NO. II : 1. On the facts and in the circumstances of the case and in law, the CIT(A) erred in upholding the action of the TDS Officer in levying penalty amounting to Rs. 10,73,990/- u/s 271C of the Act on the alleged ground that the Appellant has failed to deduct tax at source u/s 194H of the Act. 2. He failed to appreciate and ought to have held : a) the Appellant had acted under an honest and bona fide belief that tax was not deductible u/s 194H of the Act on "discount" (alleged by the department as "commission") given to distributors; b) Appellant's stand was also approved by the Hon'ble Tribunal before the Hon'ble High Court reversed those decisions and therefore there was a "reasonable cause". c) There was a "reasonable cause" for non-deduction of TDS and in view of section 273B of the Act, no penalty can be levied. d) Without Prejudice, if the mechanism to deduct TDS fails in absence of 'payment' or 'cred....

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.... 2005-06) Ground No. 1 : 1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals)-41, New Delhi ("CIT(A)") erred in upholding the action of the Additional Commissioner of Income, Range 50, New Delhi ("the TDS Officer") in levying penalty amounting to Rs. 62,00,145/- u/s 271C of the Income Tax Act, 1961 ("the Act") on the alleged ground that the Appellant has failed to deduct tax at source u/s. 194H of the Act. 2. He failed to appreciate and ought to have held : a) the Appellant had acted under an honest and bona fide belief that tax was not deductible u/s. 194H of the Act on "discount" (alleged by the department as "commission") given to distributors; b) Appellant's stand was also approved by the Hon'ble Tribunal before the Hon'ble High Court reversed those decisions and therefore there was a "reasonable cause". c) There was a "reasonable cause" for non-deduction of TDS and in view of section 273B of the Act, no penalty can be levied. d) Without Prejudice, if the mechanism to deduct TDS fails in absence of 'payment' or 'credit', there is a 'reasonable cause' for non-d....

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....ngly company was held liable to pay through deduction/ non-deduction u/s 201(1) and interest u/s 201(1A) of the Income Tax Act, 1961. Order u/s 201(1) / 201(1A) was passed for assessment year 2003-04 on 13.02.2004 and the matter was referred to additional CIT for initiation of penalty proceedings u/s 271C of the Act. The assessee filed appeal before the CIT(A) and CIT(A) vide order dated 31.03.2005 uphold the order of the Assessing Officer. Accordingly the assessee filed appeal to the Tribunal which was allowed in favour of assessee vide order dated 28th March, 2008. Against this order the revenue filed appeal in the Hon'ble High Court, New Delhi and the Hon'ble High Court vide order dated 19.02.2010 decided the issues in favour of the revenue and against the assessee. Accordingly necessary appeal effect was given the order of the Hon'ble High Court for both financial years and the notice for penalty u/s 271C was accordingly revised on 20.01.2011. The Assessing Officer passed penalty order at a section 271C read with section 274(1) of the Act. 6. Being aggrieved by the penalty order the assessee filed appeal before the CIT(A) which was dismissed by the CIT(A). 7. The Ld. A....

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....) as subsequently affirmed by the Divisional Bench and the Hon'ble Supreme Court; ii.CIT Vs. Qatar Airways (332 ITR 253) (Bom.); iii. Piramal Healthcare Ltd. Vs. ACIT (21 taxmann.com 225) (Trib-Mumbai) as subsequently affirmed by the Hon'ble Bombay High Court in CIT vs. Piramal Healthcare Ltd (ITA Nos. 1427, 1428, 1545. 1622 of 2012 and 15 of 2013); iv. SRL Ranbaxy Ltd. Vs. ACIT (2011) (50 SOT 173) (TDel) * Lastly, the Department stand is that the Appellant should have collected say Rs. 82 (Rs. 80 discounted price and Rs. 2. being 10% TDS on Rs. 20 i.e MRP Rs. 100 Less Discounted Price). Appellant humbly submits that this argument would import TCS provisions u/s.206C into I94H 8. The Ld. AR further relied upon the decision of Delhi Tribunal in the case of ITO vs. G. B. Morrison Travels (P.) Limited (99 TTJ 117). In that case, penalty was imposed on the assessee (carrying on the business as travel agents for various airlines) under section 271C of the Act for not deducting tax under section 194H on discount given by it to its sub-agents. Further, the Ld. AR relied upon the decision of Hon'ble Allahabad High Court in the case of CIT (TDS....