Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News What's New Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

Himachal Pradesh State Electricity Board Versus Additional Commissioner of Income-Tax (TDS)

Penalty under section 271C - failure to deduct tax - Held that:- In the present case, we find that the assessee has not been treated as an "assessee-in-default" as per section 201 of the Act and is, therefore, neither liable to deduct nor pay any tax as per Chapter XVII-B. In such circumstances, we find that the question of levy of penalty under section 271C does not arise.

In view of the same we find no merit in the contention of the learned Departmental representative that the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r : Ashwani Kumar For the Respondent : Manjit Singh ORDER Annapurna Mehrotra (Accountant Member) 1. These four appeals have been filed by the assessee against the order of the Commissioner of Income-tax (Appeals), Shimla, Himachal Pradesh, dated October 29, 2014, in each case, for the assessment year 2007-08 to 2010-11 upholding the levy of penalty under section 271C of the Income-tax Act, 1961. 2. The brief facts of the case are that the assessee is a company incorporated under the Electricity .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d at the business premises of the assessee on February 11, 2009, during the course of which it was noticed that the assessee had made payments of transmission charges to PGCIL without deducting tax at source. The Assessing Officer, after detailed discussion in the assessment order, imposed penalty under section 271C of the Act, amounting to ₹ 1,36,00,187, ₹ 2,48,13,453, ₹ 2,76,67,625 and ₹ 5,71,017 for the financial years 2006-07, 2007-08, 2008-09 and 2009-10 after findin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

see and dismissed the appeal of the assessee, upholding the levy of penalty under section 271C by holding at paragraphs 5.1 to 5.4 of its order as follows : "5.1 The main issue in this case is whether penalty under section 271C is imposable in the fact and circumstances of the assessee's case. The assessee has taken additional ground during the appellate proceedings that since notice under section 271C read with section 274 was issued on May 16, 2012, and penalty was imposed on March 20 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

governed by section 275(1)(c), i.e., when the Assessing Officer initiated the independent penalty proceedings under section 271C on May 16, 2012, the order should have been passed on or before March 31, 2013, in accordance to the abovementioned provisions. Thus, the order passed on March 20, 2013, is a valid order. As such no time limit for initiation of penalty proceedings under section 271C has been provided under the law and it is not mandatory that these proceedings should be initiated duri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

failure to deduct is liable to be penalised under section 271C independently. 5.3 The assessee placed reliance on Asst. CIT v. Good Health Plan Ltd. (I.T.A. No. 155/Hyd/2013) of the Income-tax Appellate Tribunal, Hyderabad, in this respect the judgment is not from jurisdictional Tribunal and the facts of the case are different from the facts of the assessee's case. Moreover, it is pointed out that Chapter XVII-B starts from section 192 to section 206CA. Mere non-violation of section 201 does .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ions of Act. 5.4 The assessee has further argued that the assessee was under honest belief that since the transmission charges are regulated by CERC, the assessee was not to deduct TDS on transmission charges. This argument cannot be accepted as reasonable cause for failure to deduct. Keeping in view, above facts, the contention of the assessee is not accepted and the appeal is dismissed." 5. Aggrieved by the same the assessee filed the present appeal before us taking the following grounds .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

levied was not barred by limitation. 6. In ground No. 1 the assessee has agitated the levy of penalty under section 271C. 7. Before us the learned authorised representative reiterated the contentions raised before the learned Commissioner of Income-tax (Appeals) and argued that no penalty under section 271C was leviable since the assessee had not been treated as an assessee-in-default for the purpose of section 201(1) of the Income-tax Act, 1961, by the learned Income-tax Officer (TDS) vide his .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ised representative argued that the very basis of such penalty is the amount of tax which the assessee had failed to deduct and pay as per law and when there was no such amount in existence, since the assessee was not an assessee-in-default as per section 201(1) of the Act, the penalty under section 271C could not be imposed. The learned authorised representative placed reliance in the case of Asst. CIT v. Good Health Plan Ltd. (I. T. A. No. 155/Hyd/2013). 8. The learned authorised representativ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat in view of the same PGCIL had collected all due taxes from the assessee in the various bills raised on it for the relevant assessment years. Therefore, the learned authorised representative stated that the assessee was under the bona fide belief that since it has already paid taxes to PGCIL any further tax deduction at source would only amount to double taxation, and, therefore, did not deduct tax at source. The learned authorised representative stated that since there was a reasonable cause .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nce the two were separate provisions and could not be interlinked and hence penalty under section 271C was rightly levied. 10. We have heard the submissions made by the representative of both the parties and perused documents placed before us and the order of the authorities below. 11. The undisputed facts emerging in the present case are that the assessee was liable to deduct tax at source but had failed to do so on payments made to PGCIL during the impugned financial year as follows : Financia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cts it has now to be seen whether the assessee is liable to penalty under section 271C of the Income-tax Act. 14. For a better understanding of the issue we hereby reproduce the provision of section 271C of the Income-tax Act, 1961. 271C.(1) If any person fails to- (a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B ; or (b) pay the whole or any part of the tax as required by or under,- (i) sub-section (2) of section 115-O ; or (ii) the second pro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the amount of tax which such person fails to deduct or pay as stated in the provision. 16. Chapter XVII-B which deals with the provisions relating to tax deduction at source, outlines the incomes on which the provision applies and other procedural aspects of TDS. Section 201, which is part of Chapter XVII-B, states that in case of default in deduction of tax at source or payment of the same, the person responsible shall be treated as an assessee-in-default. The first proviso to section 201 s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ragraph 30 of its order : "As per section 201 if returns has been filed by the recipient and he has computed tax liability and/or has paid the tax, the payer referred to under section 201 of the Act was not liable for payment of tax or to deduct." 17. In the present case, we find that the assessee has not been treated as an "assessee-in-default" as per section 201 of the Act and is, therefore, neither liable to deduct nor pay any tax as per Chapter XVII-B. In such circumstanc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s an assessee not in default in respect of the amounts of TDS to be deducted, then there cannot be any scope for levying penalty under section 271C of the Act. As in this case the amount of tax has been paid by the recipient of the income. Being so, the provision of section 271C cannot be applied to the assessee's case as these provisions clearly state that if any person fails to deduct whole or any part of the tax as required under the provisions of Chapter XVII-B, then such person shall be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

m deletion of penalty by the Commissioner of Income-tax (Appeals)." 18. In view of the same we hold that no penalty under section 271C could be levied in the present case. 19. Moreover, the fact that the tax on the impugned sums had been reimbursed to PGCIL has not been controverted by the Revenue. In such circumstances, the belief harboured by the assessee that by deducting further TDS, it would tantamount to double taxation, appears to be a reasonable and bona fide belief. The hon'ble .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uld reasonably lead any ordinary prudent and cautious man placed in the position of the person concerned to come to the conclusion that same was the right thing to do. The cause shown has to be considered and only if it is found to be frivolous, without substance or foundation, the prescribed consequences follow." 20. In view of the same we find no merit in the contention of the learned Departmental representative that the assessee had no reasonable cause for not deducting tax at source. Fu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er alia, states that if any person fails to deduct the whole or any part of the tax as required by the provisions of Chapter XVII-B then such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct. In these cases we are concerned with section 271C(1)(a). Thus section 271C(1)(a) makes it clear that the penalty leviable shall be equal to the amount of tax which such person failed to deduct. We cannot hold this provision to be mandatory .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

  ↓     Latest Happening     ↓  

Forum: GST return filing software online | Easy GST compliance management

Forum: Input credit of gst paid on urd

Forum: 3B mistake

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Input tax credit

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

Forum: GST on Notional rent

Forum: GST ON SALES PROMOTION

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 comments and suggestions-reg.

Highlight: Genuineness of labour wages expenses, embroidery charges, fabrication expenses etc. - getting work done through small workmen who do not have any permanent place of residence - disallowance of ad hoc expenditure deleted.

Highlight: Project import - Since the goods were never used for the purpose for which it was imported, the actual user condition has been violated - Redemption fine and penalty imposed.

Highlight: Penalty u/s 112 (a) - CHA - Lack of due diligence and failure to take more precautions can not, by itself, bring in penal consequences

Highlight: Import of services - GST - The fact that those services were received outside India will not change the fact that the services have been paid for by the beneficiary appellant, who is located in India. - Demand confirmed.

Notification: SEZ for IT/ITES at Madhurwada Village, Visakhapatnam District in the State of Andhra Pradesh - denotified.

Highlight: Merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in convertible foreign exchange.

Highlight: Merely vehicle numbers was not mentioned on the invoices cannot be the reason to deny Cenvat Credit

Highlight: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017 - Circular

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

News: Auction for Sale (Re-issue) of Government Stocks

Article: TDS APPLICABILITY ON GOVERNMENT CONTRACTS UNDER GST (Under Section 51 of the CGST Act, 2017)

News: Manmohan takes potshots at note ban, 'hasty' rollout of GST

News: GST on petrol, diesel requires wider discussion: Nitish

Article: WHEN CAN ONE TAKE ITC FOR RCM CASES?

Notification: TDS liability under Section 51 of CGST, 2017 come into force w.e.f. 18-9-2017 - Persons liable to deduct TDS from payment made or credited to the supplier of taxable goods or services specified

Notification: Central Goods and Services Tax (Seventh Amendment) Rules, 2017

Notification: Seeks to extend the last date for filing the return in FORM GSTR-3B for the months of August to December, 2017

Circular: Filing of Special Leave Petition against Orders of Hon'ble High Courts staying Collection of Tax under GST- reg.

Highlight: Exemption u/s 54F - LTCCG - once entire net consideration is invested, the absence of completion certificate cannot be a ground to deny the benefit of deduction.



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version