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Case Law Details

Case Name : Addl. CIT (TDS) Vs The Principal Officer (ITAT Delhi)
Appeal Number : ITA Nos. 4837 to 4839/Del/2015
Date of Judgement/Order : 23/11/2017
Related Assessment Year : 2011- 12 to 2013- 14
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Addl. CIT (TDS) Vs The Principal Officer (ITAT Delhi)

Section 273B of the Act provides that in case of a reasonable cause, penalty otherwise exigible, inter alia, u/s 271C of the Act, cannot be imposed. When we advert to the facts of the instant case, being – no deduction of tax at source made prior to the year of survey on 24.02.2014; no other order against the assessee requiring deduction of tax at source at that time when the assessee made payment of lease rental; and the judgment of the Hon’ble Delhi High Court delivered only on 16.02.20 17 casting obligation for making deduction of tax at source -, it becomes abundantly clear that the assessee entertained a bona fide belief that no tax withholding was required on lease rent payments. This belief, being a reasonable cause, for non deduction of tax at source in respect of lease rent payment, magnetizes the provisions of section 273B. Considering the provisions of section 271C read with section 273B, we hold that the penalty imposed u/s 271C is not sustainable.

Full Text of the ITAT Order is as follows:-

This batch of nine appeals comprises of six cross appeals in respect of Jaypee Sports International Ltd. relating to assessment years 2011-12 to 2013-14 and the remaining three appeals by the Revenue in respect of Jaypee Infratech Ltd. for assessment years 2011- 12 to 2013-14. All these appeals involve a solitary issue of confirmation/reduction of penalty u/s 271C of the Income-tax Act, 1961 (hereinafter also called ‘the Act’).

Jaypee Sports International Ltd.

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