TMI Blog2017 (9) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly deducted. Still being dissatisfied, the assessee asked the ITO TDS to advice on the said issue who advised to deduct tax @10%. Accordingly, the assessee deducted the tax @10% from next bill and paid the difference along with interest of first bill on the amount short deducted by it. The fact that the assessee itself obtained the opinion from department itself clearly shows that there was bonafide intention on the part of the assessee not to make any default and the correct TDS was deducted out of the next payment made to NYSA Communications (P) Ltd and paid accordingly. Hence it is not a fit case for levying penalty - Decided in favour of assessee. - ITA No. 4518/Del./2014 - - - Dated:- 31-8-2017 - Shri Amit Shukla, Judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in confirming the penalty rejecting the contention of the assessee that the non-deduction of tax by the assessee was on account of a reasonable cause in terms of provision of Section 273B, as such the penalty is not leviable. 6. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the penalty rejecting the explanation and evidences brought on record by the assessee to show that the action of the assessee was bonafide and on realizing the mistake, the same was rectified immediately. 2. The brief facts of the case are that the assessee is a Directorate of Distance Education of Maharishi Dayanand University, Rohtak. During the year under consideration, the assessee entered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther u/s 194C or 194J. The first bill of the said party became due on 01.02.2011. The assessee proposed to deduct tax at source @10% but on the following three reasons the same was deducted @2% i.e. contractual payment: 4 (i). A contractual agreement was entered between the assessee and NYSA Communications which covered various aspects being contractual in nature. (ii). When proposed to deduct tax at source @ 10% u/s 194J it was specifically stated by NYSA Communications that it had entered into a contractual agreement with the assessee which included supply of man, material along with various services and thus was covered u/s 194C @2%. (iii). Expert opinion was taken from a CA firm which advised that the tax was to be deducted @2% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax at source @10% on the next bill of NYSA Communications and also deposited the same. The said action was done by the assessee to abide with the advice of the ITO (TDS). However, the JCIT, TDS Range, Karnal initiated the penalty proceedings under section 271C of the Act in respect of above short deduction of TDS of ₹ 30,66,318/-.The assessee filed detailed reply before the JCIT stating that the lower deduction of tax was made due to bonafide belief of the assessee and under confusion as the supplier as well as the consultant of the assessee had advised it to deduct tax @2%.The assessee further stated that due to confusion a clarification in this respect was sought from the I T Department and the opinion of the department was accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te issued u/s 197 of the Act to M/s Nysa Communications P Ltd by the ITO TDS @2% for the subsequent period for the amount to be received by the assessee. Ld. AR submitted that for the aforesaid reasons there is reasonable cause on the part of the assessee for depositing short payment of TDS. The fact that the assessee itself obtained the opinion from department itself clearly shows that there was bonafide intention on the part of the assessee not to make any default and the correct TDS was deducted out of the next payment made to NYSA Communications (P) Ltd and paid accordingly. He also placed reliance on the various judgments of Jurisdictional High court and Apex Court wherein it has been held that unless there was contumacious conduct on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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