Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2017 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (7) TMI 922 - HC - Income TaxLevy of penalty imposed under Section 271C - failure to deduct tax at source by Noida - Held that:- In view of the dispute as to whether NOIDA is a Corporation exempt from liability of deduction of tax at source there was a reasonable cause for the respondent assessee not to deduct the tax at source. In the case of Commissioner of Income Tax (TDS) Vs. G.M. (Telecom) BSNL [2014 (2) TMI 800 - ALLAHABAD HIGH COURT] the assessee was under a bonafide believe that tax was not liable to be deducted on commission/trade discount in view of decision in Idea Cellular Ltd. Vs. DCIT (2008 (3) TMI 355 - ITAT DELHI-A ). The Division Bench of this Court held that it was a reasonable cause for failure to deduct tax. This exactly is the position in the case at hand. Accordingly, even in the light of the provisions of Section 273 B of the Act no penalty could have been imposed upon the respondent assessee under Section 271 C of the Act. The question framed above is answered in favour of the assessee and against the revenue and it is held that the tribunal was justified in holding the penalty imposed under Section 271 C of the Act as the assessee not only had a reasonable cause for not deducting tax at source but also as NOIDA was exempt for payment of tax at source. - Decided against revenue
|