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TMI Blog2019 (2) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... nd in default for not deducting tax at source on various payments made by it. Show cause notice under section 271C was issued as to why it should not be penalized for failure to deduct TDS during the year under appeal. The assessee filed written submissions in which it was explained that assessee-society was a unit of Uttarakhand Government formed by the Health Department of Uttarakhand for implementation of various schemes under the National Rural Health Mission Programme initiated by the Government of India in the States. All funds were received from the Government of India on the specific directions for expenditure oN health related object. During the year under question, it made payment to various NGOs for implementation of various obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee had a reasonable cause for non-deducting tax and there were no defiance of Law. The assessee relied upon several decisions in support of the contention. 3. The JCIT, however, did not accept the arguments advanced by the assessee on account of the fact that EMRI was providing technical and professional services and EMRI was taxable. Further, it was held that the payer, the payee and the payments are all covered within the scope of TDS provision. It was submitted that with regard to the NGOs even though they may not be taxable, there is no automatic exemption from TDS in respect of the payments to entities which may be registered under section 12A of the Income- Tax Act. The A.O. accordingly levied the penalty under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... default on the part of the assessee. The Ld. D.R. submitted that violation of TDS provision is on account of non-deduction of TDS on a sum i.e., "the payments" and not "on the income". Therefore, the findings of the Ld. CIT(A) are incorrect. 6. None appeared on behalf of the assessee, despite service of the notice. 7. We have heard the submissions of the Ld. D.R. Vide Order Dated 22.11.2018, one of the Department Appeal in ITA.No.1690/Del./2015 was heard and the present appeal was adjourned to 05.02.2019. The record reveals that the appeal of the Department in ITA.No.1690/Del./2015 for the A.Y. 2010-2011 have been dismissed by the Tribunal because of the low tax effect. In the present case, the A.O. passed the Order on account of default ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e against the Order of Ld. CIT(A) Dated 28.02.2013. Since Ld. CIT(A) vide Order Dated 28.02.2013, in principle, has confirmed the Order of the A.O. that assessee is liable to deduct TDS on the payments in question, therefore, Ld. CIT(A) should not have taken a contrary view in the penalty matter. Since the matter of quantum is restored to the A.O. for verifying the above claim of assessee, therefore, it would be reasonable and proper to restore the penalty matter also to the file of A.O. to pass the fresh Order in accordance with Law, after passing the Order under sections 201(1)/201(1A) of the Income Tax Act, 1961, as per the directions of the Ld. CIT(A). Whether assessee would have a reasonable cause shall be re-determined by the A.O, aft ..... X X X X Extracts X X X X X X X X Extracts X X X X
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