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2016 (1) TMI 680 - AT - Income TaxPenalty u/s Sec. 271C - non deduction of tds on five foreign remittances u/s 195 - (i) Engineering and Draughting services provided by AEC. - (ii) Payments for purchase of shrink wrapped software (i.e. standard computer software) - Held that:- It is noted that there is huge controversy on this issue, and therefore, assessee placed reliance on the judgments which were in its favour including the judgment of Hon’ble Supreme court in the case of Tata consultancy services [ 2004 (11) TMI 11 - Supreme Court ]. It is noted by us that various High Courts and benches of the tribunal have taken contradictory stands on this issue. The assessee has furnished list of various cases ‘for’ and ‘against’ the assessee, on this issue. Apparently, assessee adopted one of the views available. Under these circumstances, we are unable to accept the stand of the AO that – “no controversy was involved on the obligation of the assessee for deduction of TDS on the impugned payments and that view taken by the assessee was not one of the possible view and was not bonafide view, and accordingly there could not have been any reasonable cause for non-deduction of TDS on the impugned payments”. In our considered opinion, the decision with regard to the obligation of the assessee for deduction of TDS on the aforesaid payments was highly debatable, in the given facts of the case and legal scenario discussed above. The view adopted by the assessee based upon the certificate of the C.A., was one of the possible views and can be said to be based upon bonafide belief of the assessee. Therefore, under these circumstances we can hold that there was reasonable cause as envisaged u/s 273B for not deducting tax at source by the assessee on the aforesaid payments, and therefore, the assessee was not liable for levy of penalty u/s 271C - Decided in favour of assessee
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