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2021 (5) TMI 938 - ITAT DELHIPenalty u/s 271(1)(c) - disallowance of professional fees for non-deduction of TDS - HELD THAT:- Expenses disallowed u/s 40(a)(i) on account of non withholding of taxes was subject to payments made to vendors based in Thailand who are in the business of providing movers and packers Services to its client. This was in relation to the expats’ transfer movement. The service related to Movers and Packers cannot be characterized as royalty income in the hands of those vendors under the provisions of India Thailand DTAA and the same does not quality as technical service as it does not include the element of technical services relating to FTS. The tax relating to Section 40(a)(i) will not be applicable in assessee’s case and is a contesting issue. Merely not filing appeal on the contesting issues does not tantamount to concealment of income and furnishing inaccurate particulars of income. These two elements along with Explanation 1 of Section 271(1)(c) are not present in assessee’s case for imposing penalty or initiating penalty proceedings. As related to payment made to control risk, the same also does not impugned to FTS as per the provisions of Article 12(4) of India Singapore DTAA as the same does not result in making available technical knowhow to the recipient. Thus, these two elements upon which the penalty has been imposed by the Revenue Assessment Year contesting in nature and the assessee though has not opted for any appeal, it cannot be stated that these are the element of concealment of income and furnishing of inaccurate particulars. The case laws given by the assessee are clearly applicable in assessee’s case specially that of Reliance Petroproducts Pvt. Ltd.[2010 (3) TMI 80 - SUPREME COURT]. Hence we delete the penalty and allow the appeal of the assessee.
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