Case Law Details
Unity Dye Chem Pvt. Ltd. Sokhada Vs CIT (ITAT Ahmedabad)
Introduction: The case of “Unity Dye Chem Pvt. Ltd. vs CIT” involves an appeal to the ITAT Ahmedabad against the imposition of a penalty under section 271C for non-deduction of TDS. The key contention is whether the submission of Form 15G and 15H can exempt the assessee from the penalty.
Analysis: The appellant was penalized under section 271C for not deducting TDS on interest payments to certain parties. However, the appellant argued that they had received Form 15G and 15H from these parties, declaring their income as non-taxable. These forms were submitted to the Commissioner with a minor delay of one month.
The ITAT analyzed the circumstances and observed that the appellant received the necessary forms before making the interest payments. Additionally, the Commissioner, in the quantum proceedings, had ruled in favor of the appellant, stating that TDS was not required under Section 40(a)(ia) of the Income Tax Act.
Considering these factors, the ITAT ruled that the penalty under section 271C should not be imposed in this case, as the submission of Form 15G and 15H supported the appellant’s non-deduction of TDS.
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