Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (12) TMI 45 - ITAT DELHIPenalty u/s 271C - non-deduction of TDS u/s 194J - Held that:- Assessee has debited preoperative expenses of ₹ 2.25 lakhs on which tax was not deducted under section 194J of the income tax act. The assessee stated that it was covered by the exemption certificate under section 197 (1) of the income tax act dated 16th/1/2015. AO noted that the about tax deduction at source certificate has been given for the period from 10/12/2000 08/02/1931/3/2009 only. There was admittedly a failure on the part of the assessee to deduct tax at source on these above two expenses. However merely failure to deduct tax does not result into penalty under section 271C unless the adjudicating authority shows that there is a contumacious conduct of the assessee in failure to deduct tax at source. The issue is now squarely covered in favour of the assessee by the decision of the honourable Supreme Court of India [2016 (1) TMI 583 - SUPREME COURT] wherein it has been held that for levy of the penalty under section 271C of the income tax act the learned adjudicating authority has to show contumacious conduct on the part of the assessee. There is no such finding that assessee has deliberately avoided the tax deduction at source provisions by not deducting the tax at source and therefore has failed to prove the contumacious conduct on part of the assessee for failure to deduct tax at source. In view of this we reverse the finding of the lower authorities and direct the learned adjudicating officer to delete the penalty under section 271C - Decided in favour of assessee.
|