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TMI Blog2024 (7) TMI 632X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome Tax Act, 1961 (hereinafter referred to as 'the Act') by the JCIT, Range-73, Delhi (hereinafter referred as the Ld. AO). 2. In the case of the assessee company, on the basis of the information from ACIT, Circle 73(1), a verification was completed u/s 201(1)/201(1A) dated 30.03.2012 and it was observed that during the survey operations carried out at the premises of M/s Ambience Limited, it was found that the assessee is making payments towards directors sitting fees amounting to Rs. 6,80,000/- without deduction of TDS thereon. Further, the assessee has paid an amount of Rs. 10,89,200/- on account of transaction charges being professional payment without deduction of TDS in violation of section 194J of the Act. Thus, after issuing a sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Rs. 1,08,920/- respectively, totaling to Rs. 1,76,920/-. Sir, as regard to the deduction of TDS on sitting fees of the Directors as concerned, the assessee was under the bonafide belief that no TDS is required to be deducted on such payments. The view of the assessee also finds force that the amendment in the Section 194J(1)(ba) which clarifies that needs to be deducted on remuneration or fees to the Director of the company. The said Section was introduced in the Finance Act, 2012 with effect from 01st July 2012, which means that for F.Y. 2009-10, this position was not clear as to whether the assessee was supposed to deduct TDS on Directors sitting fee. This clearly enforces that the assessee was in a belief and hence did not deduct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 273B of the Income Tax Act." 4. After considering the explanation given by the assessee in regard to the 'Transaction charges which the tax authorities have considered as 'Professional charges' paid to directors falling in limb (ba) of sub-section (1) of section 194J of the Act, it comes up that the ld.PCIT has accepted the plea of the assessee that payments made to directors on account of sitting fee is allowable. The assessee seems to have had valid reasons to consider the payments on account of 'transactional charges' to be not covered by Section 194J(1)(ba) of the Act as there is no such head in this section. Thereby not deducting the TDS seems to be out of bonafide belief. Imposition of penalty is thus not justified. Consequen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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