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TMI Blog2011 (2) TMI 1234X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Tribunal cancelling the penalty levied under Section 271C of the INcome Tax Act. 2. The assessee was earlier known as M/s. Wipro BT Ltd. It is one of the companies associated with group Wipro Limited. It had taken a premises on lease and paid rentals of Rs. 54,90,000/- to M/s Wipro Limited. However, the assessee had failed to deduct tax at source under Section 194-I of the Act. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee did not deduct the tax because the payee had paid the entire amount of tax. Therefore, he bona fide believed that he is not required to pay tax. It is because of that reason the assessing officer did not hold the assessee as 'assessee in default' under Section 201. The bona fide belief is further fortified by the fact that ultimately the payee has waived the payment of rent due to huge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roup company, there was no lease agreement between the parties. In fact no rent was paid. It is only in the course of audit proceedings, it was pointed out that atleast an entry should be made in their accounts showing payment of rent, even though rent is not actually paid. In those circumstances they made an entry in the books of accounts. Consequently the payee paid the tax due. In those circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmissions and in interfering with the order passed by the lower authorities. If really no rent is paid as contended by the assessee and only in the course of audit proceedings, on advice they made and entry and consequently the payee has paid the entire tax probably they can be given the benefit under Section 273B. Otherwise it is difficult to uphold the order of the Tribunal. In those circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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