TMI Blog2006 (3) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices rendered in India were chargeable to tax and that since no deduction of tax at source in regard to the said salaries had been made, the assessee was liable to suffer a penalty in terms of section 271(C) of the Income Tax Act, 1961. Penalties for the financial years 1991-92 to 1998-99 were accordingly imposed upon the respondent-assessee, Sencma, India. Similarly, penalties for the financial years 1989-90 to 1998-99 were imposed upon the respondent-assessee, Sencma, France. 2. Aggrieved by the said orders, the respondents-assessees appealed to the Commissioner of Income-tax (Appeals), inter alia, contending that the assessees were under a bona fide belief that salaries paid to expatriate employees outside India was not taxable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atch of cases which were decided by the Tribunal involving similar questions and held that the fact situation in those cases was similar to the cases at hand. Following the view taken in the said cases, the Tribunal held that the levy of penalty was not justified. It, accordingly, dismissed the appeals filed with the Revenue, while allowing those filed by the respondents-assesees. The present appeals filed by the Revenue assail the correctness of the said order. 4. We have heard at considerable length Mr. Jolly, counsel appearing for the Revenue and perused the record. The Tribunal has on consideration of the facts and circumstances of the cases and relying upon the decisions rendered by it earlier, some of which have even met the appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion provided a reasonable justification for the companies not to make the deduction. The fact that the respondent-assessee company is a foreign company with its employees working in India, who are paid salaries in India as also in France is not in dispute. That being so, there was no real or material difference in the fact situation in which companies from Japan were held not liable to penalty for non-deduction of tax at source. The respondent company in the present batch of cases had for identical reasons failed to make the deduction which would call for a similar treatment to them also. In as much as the Tribunal has adopted the same yardstick and standard for determining the liability to pay penalty to the companies from Japan as those ..... X X X X Extracts X X X X X X X X Extracts X X X X
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