TMI Blog2017 (11) TMI 1652X X X X Extracts X X X X X X X X Extracts X X X X ..... S on payment of Lease rent, the assessee entertained a bona fide belief that no tax withholding was required on lease rent pay no deduction of tax at source made prior to the year of survey on 24.02.2014; no other order against the assessee requiring deduction of tax at source at that time when the assessee made payment of lease rental; and the judgment of the Hon'ble Delhi High Court delivered [2017 (2) TMI 1109 - DELHI HIGH COURT] casting obligation for making deduction of tax at source It becomes abundantly clear that the assessee entertained a bona fide belief that no tax withholding was required on lease rent payments. This belief, being a reasonable cause, for non deduction of tax at source in respect of lease rent payment, magnet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed. Pursuant to that, penalty was imposed u/s 271C of the Act for a sum of ₹ 7,55,18,885/-. The ld. CIT(A) waived the penalty in respect of liability of the assessee created in relation to Interest payment, but, upheld it in relation to Lease rent. That is how, both the sides are in appeal on their respective stands. 3. We have heard both the sides and perused the relevant material on record. It is observed that the order u/s 201(1)/201(1A) came up for consideration before the Tribunal. Vide order dated 31.08.2017 in ITA No.4279 to 4281/Del/2015 etc., the Tribunal has held the assessee liable for deduction of tax at source in respect of Lease rent and the liability in respect of Interest payment has been has been deleted. A cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Earnest Towers (P) Ltd., vide its order dated 13.05.2015 (ITA No.265/Kol/2012), a copy of which is available at page 72 onwards of the paper book, has held that payment of lease premium in respect of property on which development of the area of land was allowed, cannot convert lease premium into tenancy as per section 194-I of the Act. It is an admitted position that the assessee got possession of the land somewhere in the year 2008 and started paying rent without any deduction of tax at source. It was only pursuant to Survey carried out in the year 2014 that the assessee was held to be liable for deduction of tax at source in respect of such lease rent payment. The fact that the assessee did not deduct tax at source from the lease rental p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty u/s 271C in respect of Interest payment made by the assessee. 10. It has been candidly accepted by the ld. DR that the facts leading to non-deduction of tax at source, inter alia, on Interest payment, being passing of order u/s 201(1)/201(1A) treating the assessee as assessee in default and the Tribunal order waving such liability, are mutatis mutandis similar to those in respect of the Revenue s appeals in Jaypee Sports International Ltd., which have been disposed off in earlier paras. Following the view taken hereinabove, we uphold the deletion of penalty on Interest payment u/s 271C of the Act. 11. In the result, the three appeals of the assessee are allowed and six appeals of the Revenue stand dismissed. Order pronounced in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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