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2015 (10) TMI 1588 - ITAT AHMEDABAD

2015 (10) TMI 1588 - ITAT AHMEDABAD - TMI - Penalty u/s. 271C - Non deduction of TDS u/s. 194J on payment of MICR charges as towards fees for technical charges - Held that:- In the present case, Revenue has not brought any material on record to demonstrate that the reasons given by Assessee for non deduction of tax was not bona fide or to be false. We further find that CIT(A) by a very cryptic order has upheld the action of A.O. Considering the totality of the facts we are of the view that in th .....

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Bench: 1. These 4 appeals are filed by the Assessee against the order of CIT(A)-I, Surat dated 30.06.2011 for A.Ys. 2003-04 to 2006-07. 2. On the date of hearing i.e. on 20.05.2015 none appeared on behalf of Assessee though from the records, it is seen that the notice of hearing was served to the Assessee. We therefore proceed to decide the issue ex parte qua the Assessee and on the basis of material available on record. 3. Before us, at the outset the ld. D.R. submitted that though the appeals .....

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Bank. In this case, ITO TDS (1), Surat noticed that Assessee had made payment of MICR charges to State Bank of India but had not deducted TDS before making the payment. A.O was of the view that Assessee should have deducted TDS u/s. 194J of the Act since the payment of MICR charges were towards "fees for technical charges". He also relied on the decision of ITAT, Ahmedabad Bench in the case of Canara Bank vs. ITO 117 ITD 207. The Assessee was asked to show cause as to why penalty u/s. .....

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the Act. He therefore vide order dated 09.09.2010 levied a penalty of ₹ 7,287/- u/s. 271C of the Act. Aggrieved by the order of A.O., Assessee carried the matter before CIT(A) who dismissed the appeal of the Assessee by holding as under:- The arguments of the A.O as well as appellant have been considered. There is considerable force in the arguments of the A.O. Having regard to the strong arguments put forth by the A.O and the decision of the Hon ble ITAT, B Bench, Ahmedabad, the penalty .....

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ent case is about the levy of penalty u/s. 271C on account of non deduction of TDS u/s. 194J on the MICR charges paid by the Assessee to State Bank of India. We find that a similar issue in the case of Prime Co.- Op. Bank Ltd. vs. JCIT (in ITA No. 2040 to 2043/A/2011 order dated 09.01.2015) was decided by the Tribunal in favour of the Assessee. The relevant portion of the aforesaid order reads as under:- 9. We have heard the ld. D.R. and perused the material on record. In the present case it is .....

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case of Woodward Governors India Pvt. Ltd. (supra), the Hon ble High Court has held that before levying penalty u/s. 271C, the concerned officer is required to find out that even if there was any failure to deduct tax at source, the same was without reasonable cause. The initial burden is on the Assessee to shown that there exists reasonable cause which was the reason for the failure, thereafter the officer has to consider whether the explanation offered by the Assessee was on account of reasona .....

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would the prescribed consequences follow. 10. In the case of Muthoot Bankers (supra), the co-ordinate Bench of Tribunal has held that when payment is disclosed in the return, there is no concealment of facts and further when recipients have shown the receipts in the returns and had paid taxes thereon, there was no loss to the Government and therefore penalty cannot be levied. 11. In the case of ITO vs. Dishergarh Power Supply Company Ltd. (supra) , the co-ordinate Bench of Tribunal has held that .....

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