Case Law Details
Shapoorji Pallonji and Co.(P) Ltd. Vs. J.C.I.T. (TDS) (ITAT Kolkata)
In the present case there was only a short deduction of tax at source and it was not a case of non deduction of tax at source. It is also seen that the short deduction of tax at source was due to a wrong nomenclature under which the accounts department classified the payment for professional services as payment made to a contractor for carrying out any work. When the mistake was pointed out, the assessee accepted the mistake to the extent that the stand taken by the revenue is correct and immediately paid the tax that was not deducted at source by applying the proper rate of TDS. The plea of the assessee, in our view, constitutes reasonable cause for the failure contemplated u/s 271C of the Act. The judicial decisions cited on behalf of the assessee supports the plea taken by the assessee for not imposing penalty u/s 271C of the Act. We therefore cancel the penalty to the extent sustained by CIT(A) and allow both the appeals of the assessee.
Full Text of the ITAT Order is as follows:-
These are appeals by the assessee against a common order dated 14.01.2016 of CIT-(A)-24, Kolkata relating to F.Y.2010-11 and 2011-12. In these appeals the assessee has challenged the order of CIT(A) whereby the CIT(A) sustained in part penalty imposed on the assessee u/s 271C of the Income Tax Act, 1961 (Act.)
2. Under Section 271C of the Act if any person fails to deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B then such person is liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct as aforesaid.
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