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2019 (4) TMI 350 - ITAT PUNELevy of penalty u/s 271C - assessee in default in not deducting tax out of payments made u/s 201(1) for purchase of software license and for availing other related software - HELD THAT:- The Tribunal in Capgemini Technology Services India Ltd. Vs. DDIT [2019 (4) TMI 308 - ITAT PUNE] held that the payments made by assessee for use of software were not taxable as royalty and hence, the assessee has not defaulted in not deducting tax at source out of such payments. Consequently, there is no merit in raising the demand under section 201(1) and charging interest under section 201(1A) of the Act. Similar stand was in respect of subscription charges, etc. Once the assessee has been held to be not in default and demand cancelled under section 201(1), penalty levied under section 271C for such default fails. Hence, the assessee is not liable for levy of any penalty under section 271C of the Act. Hence, grounds of appeal raised by the Revenue are dismissed.
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