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TMI Blog2022 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... the companies Act, 1956. During the year under consideration, the assessee was engaged in the business of providing engineering consultancy services and supply of manpower services to the Indian Power sector and infrastructure sector and providing multidisciplinary consultancy services for power and infrastructure projects outside India. In this case, reference was received vide letter dated 10.07.2014 from the Deputy Commissioner of Income Tax, Circle-51(1), New Delhi, (pre-restructuring) which indicated failure on the part of the assessee company as required under the provisions of Chapter XVII-B of the Act to deduct tax at source of Rs. 98,92,242/- and Rs. 3,10,000/- for the F.Y. 2012-13 and F.Y. 2011-12 respectively. The JCIT issued sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the argument of the appellant. It was submitted that certain provisions were created on an estimate basis (in the absence of receipt of actual invoices from the payee), which were debited to profit and loss account on conformity with the provisions of Accounting Standard 29, pertaining to provisions, contingent liabilities and contingent assets issued by the Institute of Chartered Accountant of India. Furthermore, the said provisions were reversed in the beginning of the next accounting year. The Appellant as a part of disclosure in the notes to tax computation (refer page 56 to 70 of the paper book) suo-moto disclosed the fact that it has disallowed the said amount of provision for expenses under section 40(a)(ia)/40(a)(i) of the Act. Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above discussion, I find that penalty under section 271C is not found to be leviable on the facts of the present case, therefore, the AO is directed to delete the same. 5. In the result, the appeal is allowed." 4. Aggrieved with such order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal by raising the following grounds of appeal:- (1) Whether the Ld. CIT(A) was right in holding that exact amount payable to the payee was not identifiable even though the Auditor in its report in Form No.CD has clearly mentioned the amount on which tax was deductible, amount of tax deductible, head and section under which tax deductible and name of party/dedcutee and their PAN No. (2) Whether the Ld. CIT(A) was right in holding that ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2012, order dated 07.03.2014 for AY 2007-08. He accordingly submitted that this being a covered matter in view of the two decisions of the Tribunal under identical facts and circumstances of the case, the order of the Ld. CIT(A) should be upheld and the grounds raised by the Revenue should be dismissed. 7. We have heard the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the JCIT in the instant case levied penalty of Rs. 98,92,242/- u/s 271C on the ground that the assessee has not deducted TDS on certain expenses for which provision of Rs. 9,92,66459/- was created in its books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of return of income of the respective financial years is enclosed as part of the paper book (refer pages 1 to 11 of the paper book). In the subsequent year, on receipt of invoices, the applicable taxes were duly deducted and deposited within the stipulated timelines, without any intimation by the tax authorities." 8. We find identical issue had come up before the Coordinate Bench of the Tribunal in the case of ITO vs DLF Southern Homes Pvt. Ltd.(supra). We find the Tribunal under somewhat identical circumstances dismissed the appeal filed by the Revenue against the order of the ld.CIT(A) deleting the penalty levied u/s 271C by observing as under:- "4. We have carefully gone through the record. There is no contravention of the observat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, dismiss the grounds of appeal. 9. We find the Bangalore Bench of the Tribunal in the case of DCIT vs M/s Telco Construction Equipment Co. Ltd. (supra) while disposing of identical issue dismissed the appeal filed by the Revenue challenging the order of the Ld. CIT(A) in cancelling the penalty levied u/s 271C of the Act by observing as under:- "6. Having heard both the parties and having considered the rival contentions, we find that the amount credited by the assessee is to the provision account and not to the respective agent's accounts. Therefore, it is clear that the assessee has not made any payment to the agents. The provisions of sec.194H would apply when the payments are made to the agents or credited to the agent's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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