TMI Blog2017 (10) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... since the deductee has admitted the incomes and paid taxes thereon, the question of short deduction or non-remittance of tax does not arise in this case. In fact there were no demands u/s. 201(1) so as to levy penalty u/s. 271C. The provisions of Section 273B are applicable as assessee has a reasonable cause for non-deduction of tax at 10% as against 2% it has deducted. In fact, the opinion of the AO has not yet become final as the issue of levy of interest u/s. 201(1A) itself is being restored to the file of AO for fresh examination in appeals (2017 (11) TMI 191 - ITAT HYDERABAD). Considering all we can only say that the CIT(A) did not err in deleting the penalties. - Decided in favour of assessee - 1148/Hyd/16, 1149/Hyd/16, 1150/Hyd/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... institutions. A survey u/s. 133A(2A) of the Act was conducted on 12-03-2015. During the survey operations, Assessing Officer (AO) noticed that the services provided by the service providers are in the nature of technical services as contemplated u/s. 194J and hence, assessee was required to deduct tax at 10% instead of 2% deducted u/s. 194C of the Act. AO passed an order raising demand u/s. 201(1A) for AYs. 2012-13 and 2014-15 and demand u/s. 201(1) and 201(1A) for AYs. 2013-14 and 2015-16. He also initiated penalty proceedings u/s. 271C and levied penalty for the impugned years as under: AY. Penalty Rs. 2012-13 4,83,61,419 2013-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Ld.CIT(A) gave relief on that issue on verification of facts. It was also submitted that assessee had bonafide belief that the tax was to be deducted u/s. 194C whereas the AO was of the opinion that the tax was to be deducted u/s. 194J. Referring to the agreements in this regard and various judicial principles, it was submitted that assessee has reasonable cause and accordingly, the Ld.CIT(A) deleted the penalty invoking the provisions of Section 273B. He supported the orders of the Ld.CIT(A). 6. We have considered the rival contentions and perused the orders on record and various case law relied upon by the parties. It is a fact that no demand u/s. 201(1) was raised for two assessment years and even other two years where it was raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what would constitute reasonable cause cannot be laid down with precision and that the question as to whether there was reasonable cause or not for the assessee not to deduct tax at source at all or under some particular provision than prescribed was a question of fact which had to be seen in the facts and circumstances of each case [Para 7]. In the instant case, the assessee had been deducting tax from the payments payable to CFAs under section 194C on a consolidated basis towards different heads. There was no reason to disbelieve the assessee that the same was being done by its employees on misconceived professional advice given by the chartered accountant. Since the payments were to be deducted from CFAs, no benefit was to be derived ..... X X X X Extracts X X X X X X X X Extracts X X X X
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