TMI Blog2016 (9) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... t since he has been hit under the provisions of section 40(a)(i), he need not deposit the tax so deducted. However as his financial position improved he did deposit the TDS alongwith the interest thereon and filed the copy of challan evidencing the payment of TDS. It was further noted that in the case of Indo Nissin Foods Ltd. v. CIT (2003 (9) TMI 294 - ITAT BANGALORE-B ) it is held that not passing order under section 201(1) before initiation of proceedings under section 271C make imposition of penalty invalid. - Decided in favour of assessee - ITA No. 736/Del/2015 - - - Dated:- 2-8-2016 - SHRI H.S. SIDHU, JUDICIAL MEMBER For The Department : Sh. A Srinivasa Rao, Sr. DR For The Assessee : Sh. Rajesh Jain, CA ORDER PE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x as required by or under the provisions of Chapter XVII-B of the Act; he is liable to pay by way of penalty a sum equal to amount of tax which such person failed to deduct. Therefore, in accordance with the provisions of Chapter XVII-B of the Act, penalty is leviable u/s. 271C of the Act. Hence, the AO levied the penalty of ₹ 24,16,490/- u/s. 271(1)(C) of the Act vide his order dated 25.10.2013. 3. Aggrieved by the aforesaid addition, assessee appealed before the Ld. CIT(A)-XII, New Delhi vide his impugned order dated 14.11.2014 has allowed the appeal of the assessee. 4. Against the order of the ld. CIT(A), Revenue is in appeal before the Tribunal. 5. During the hearing, Ld. DR relied upon the order passed by the AO and reit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Act, he is liable to pay by way of penalty, a sum equal to the amount of tax which such person fail to deduct. 4. It is seen from the penalty order that the assessee has not deducted taxes amounting to ₹ 24,16,490j-, hence the penalty. However, the assessee has raised ground against the penalty and highlighted that due to liquidity crunch the assessee failed to deduct tax on royalty payments. TDS required to be made and deposited u/s 194C, 195, 194H, 1941 and 194J was deposited later with interest hence the appellant's plea is that there was no loss of revenue. The appellant also contended that the assessment in this case was completed after accepting returned income at Nil and no penalty proceedings were initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e result in double taxation. The matter is supported by the decision of jurisdictional high court in the case of Woodward. Governor India Ltd. Vs CIT (2002) 253 ITR 745 Del and that of the Apex Court in the case of Hindustan Steel Ltd. Vs State of Orissa (1972) 83 ITR 26(SC). The assessee was under a bonafide belief that since he has been hit under the provisions of section 40(a)(i), he need not deposit the tax so deducted. However as his financial position improved he did deposit the TDS alongwith the interest thereon. Copy of challan evidencing the payment of TDS is enclosed for reference. 8. Further, in the case of Indo Nissin Foods Ltd. v. CIT (2004)3 SOT (Delhi) it is held that not passing order under section 201(1) before initia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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