CIT (TDS)-2 Vs Turner General Entertainment Networks India Pvt. Ltd. (Delhi High Court)
Delhi High Court held that reference by AO to JCIT regarding non-deduction of TDS was first step for initiation of action for imposition of penalty. Accordingly, penalty order passed by JCIT levying penalty under section 271C of the Income Tax Act is barred by limitation.
Facts- The assessee filed his return of income for A.Y. 2011-2012 on 30.11.2011 declaring a total loss of ₹2,62,04,18,432/-. The tax audit report reported that the assessee had not deducted ₹5,00,40,103/- as tax at source. The return was selected for scrutiny and the assessment proceedings u/s. 143(3) of the Act were completed on 26.03.2014. AO was of the view that the default in deducting and depositing tax at source was admitted, as it was reflected in the tax audit report. Accordingly, the AO made a reference to the JCIT on 25.09.2014.
The concerned JCIT did not take any steps for issuance of show cause notice for a considerable period of time after receipt of the reference. He issued the show cause notice on 04.08.2015 after the lapse of almost one year of receipt of the reference from the AO. He, thereafter proceeded to pass order dated 25.02.2016, levying a penalty of ₹5,00,40,103/- under Section 271C of the Act.
