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2016 (3) TMI 496 - ITAT AHMEDABAD

2016 (3) TMI 496 - ITAT AHMEDABAD - TMI - Penalty u/s 271C - non deduction of tds u/s 194LA - Held that:- The assessee had paid compensation to the land owners but has not deducted the tax u/s 194LA of the Act from such payments as the assessee was under bona fide belief that he was not under any obligation to deduct the tax u/s 194LA of the Act.

The omission on the part of the assessee was inadvertent and there was no mala fide intention. For non-deduction of TDS and delay in filing .....

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n-deduction of TDS not leviable if there was no “mala fide intention” or “deliberate defiance” of law”. It was also observed by the Hon’ble Delhi High Court in the aforesaid judgment that the levy of penalty u/s 271C is not automatic. Therefore, in the present case, there was no mala fide intention on the part of the assessee for non-deduction of TDS since it had recovered the TDS from the concerned as soon as the violation of law was brought into assessee’s notice, as discussed above. - Decided .....

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being disposed of by this consolidated order for the sake of convenience. ITA No. 2811/Ahd/2014 : AY 2009-10 2. In this appeal, the sole ground raised by the assessee reads as under:- On the facts and in circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the penalty imposed by the assessing officer u/s 271C of ₹ 1,68,588/- 3. In this case, the Assessing Officer levied penalty of ₹ 1,68,588/- u/s 271C of t .....

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uired to deduct tax at source as per the provisions of section 194LA of the I.T. Act. It was seen that the Land Acquisition Collector, Silvassa had failed to comply with the said provisions of section 194LA of the I.T. Act, thereby committing default under this section. Accordingly order u/s 201(1) and 201(1A) of the Act was passed and an amount of ₹ 52,810/- was raised as demand u/s 201(1) or not deducting tax as per section 194LA on the payment made to (i) M/s Alok Textile Ltd, (ii) M/s .....

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he aforesaid payment. The details of default committed by the deducted assessee given in the show cause notices were as under: Name of the Expenditure Relevant secton Amount of expenditure liable to TDS Tax deductible Interest Amount deducted Nondeduction of tax Payment for compulsory acquisition of L.A. Land 194LA 16,85,883 1,68,588 54,923 Nil 1,68,588 In response to the show cause notice, the assessee has neither availed the opportunity of personal hearing nor filed any written submission. As .....

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iii) Had the verification not taken place, the matter would not have been unearthed. Even after pointing out the exact contents of this case and after a lapse of such a long period the tax has not been deducted/collected and paid into the central govt account which caused loss to the Govt. Exchequer. According to the assessing officer in view of the above, the assessee failed to discharge its initial burden cast upon it u/s 194LA of the Act and thereby became liable for penalty and the penalty .....

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DS was deducted as required under the Act. All these facts came into notice during the visit of concerned ITO while conducting verification in the office of the deductor, i.e., The Land Acquisition Collector on 23.1.2012. Subsequently, an order u/s 201(1) and 201(1)A of the Act was passed and a demand of ₹ 1,68,588/- was raised u/s 201(1) for not deducting tax as per section 194LA of the Act, alongwith penalty u/s 271C of the Act. In this regard, the stand of the assessee has been that all .....

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h payments made was also collected. During the appellate proceedings, all those details collected by the deductor were filed and the assessee pleaded before the CIT(A) that the whole tax due has been deposited into the Govt account and therefore, there is no revenue loss. In this background, it was submitted that as per the provisions of Section 194LA of the Act, the assessee was required to deduct tax from the payment made towards the compulsory acquisition of non-agricultural land in the Union .....

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/- but has not deducted the tax u/s 194LA of the Act from such payments as the assessee was under bona fide belief that he was not under any obligation to deduct the tax u/s 194LA of the Act. The omission on the part of the assessee was inadvertent and there was no mala fide intention. After being made aware about assessee s TDS provisions, it had recovered the TDS from the concerned owners of the land and thereafter deposited the sum of ₹ 84,099/- and alongwith interest of ₹ 33,480/ .....

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