Penalty u/s 271C can be levied for non-deduction of TDS and not for delayed deduction of TDS

By CA Sandeep Kanoi Income Tax Judiciary November 15, 2017

TaxGuru Citation: 2017 taxguru.in 1134
Case Name: ITO Vs. M/s Liver Foundation (ITAT Kolkata)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2010- 11
Courts: All ITAT, ITAT Kolkata

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ITO Vs. M/s Liver Foundation (ITAT Kolkata)

The penalty was levied by the AO u/s 271C of the Act on the ground that the assessee failed to deduct the TDS under the provisions of section 194J and 194C of the Act. However, the Ld CIT(A) reversed the order of AO by observing that the assessee has deposited the amount of TDS in the account of Government Exchequer with the delay of few months, therefore there was no default on the part of the assessee under the provisions of TDS. From the above discussion, it is clear that the assessee has deposited the amount of TDS with the delay of few months. Therefore, it cannot be concluded that the assessee has defaulted the provisions of TDS. Thus, in our considered view the penalty u/s 271C of the Act cannot be levied for the delayed deduction of TDS amount.

Full Text of the ITAT Order is as follows:-

This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-24, Kolkata dated 30.12.2015. Assessment was framed by ITO Ward- 58(3)/TDS, Kolkata u/s 201(1)/201(1A) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 26.12.2009 for assessment year 2009-10. Penalty levied by JCIT(TDS), Range-58, Kolkata u/s 271C of the Act.2. At the time of hearing none appeared on behalf of assessee though notice of hearing was sent to assessee through RPAD. So we decided to hear the present appeal without appearance of assessee or by Ld. Authorized Representative for the assessee and after hearing ld. DR.