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2015 (7) TMI 409 - KARNATAKA HIGH COURTLevy of penalty on addition made u/s 40(a)(ia) - Non deduction of TDS on payment for technical services received from singapore - Penalty for concealment of income and furnishing of inaccurate particulars of income u/s 271(1)(c) of the Act - Held that:- It is well settled principle that penalty proceedings are quite different from the assessment proceedings. It is by now well settled that levy of penalty is not automatic if the addition/disallowance is sustained by the appellate authorities. The ingredients of the provisions of Section 271(1)(c) are to be satisfied for levying the penalty. It is no doubt true that the payment made by the respondent-assessee to M/s. Filtrex Holdings Pte. Ltd., Singapore, was liable for deduction of tax at source. It is also not in dispute that such amount of tax was not deducted at source in respect of the payment made to M/s. Filtrex Holdings Pte. Ltd., Singapore. It appears that there was genuine confusion on the question as to whether the payment made to a foreign party was liable for levying tax in India or not. The Chartered Accountant has given a certificate to the effect that the assessee is not required to deduct tax at source while making the payment to M/s. Filtrex Holding Pte. Ltd., Singapore. Thus, the assessee acted on the basis of the certificate issued by the expert.The assessee has filed Form 3CD along with the return of income in which the Chartered Accountant has not reported any violation by the assessee under Chapter XVII B which would attract disallowance under Section 40(a)(ia) of the Act. Refer case Dilip N.Shroff vs. Joint Commissioner of Income Tax & another [2007 (5) TMI 198 - SUPREME Court ]. - Decided against the revenue.
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