BRAITRIM INDIA PRIVATE LIMITED,MUMBAI vs. ADDL. DIT (I.T.) RANGE- 3, MUMBAI

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ITA 4752/MUM/2014Status: DisposedITAT Mumbai21 May 2021AY 2011-122 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the payments were not taxable in the hands of the recipient, the assessee was not required to deduct tax at source. Consequently, the penalty levied under section 271C was deleted.

What were the facts?

The assessee company was levied penalty under section 271C for not withholding tax on reimbursements made to a UK entity. The related tax withholding demands under section 201 r.w.s. 195 had already been deleted by the Tribunal.

What were the issues?

Whether penalty under Section 271C is leviable when the underlying tax withholding demand under Section 201 r.w.s. 195 has been deleted due to the payment not being taxable in the hands of the recipient.

Which sections of the Income-tax Act were involved?

Section 271C,Section 201,Section 195

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI ‘I’ BENCH, MUMBAI

O R D E R Per Pramod Kumar, VP:

These appeals are directed against the consolidated order dated 30th January 2014 1. passed by the learned CIT(A) in the matter of penalty under section 271C of the Income Tax Act, 1961 for the assessment years 2005-06 to 2012-13.

2.

Common grievance raised in all these appeals is as follows:- On the facts and in the circumstances of the case and in the law, the learned Commissioner of Income-tax (Appeals) erred in confirming the action of the Assessing Officer (‘AO’) in levying penalty under section 271C of the Income Tax Act, 1961 for not withholding tax on reimbursement of expense paid by the Appellant to Braitrim (UK) Ltd. to 4753/Mum/2014 Assessment Year: 2005-06 to 2012-13

Page 2 of 2 3. The impugned penalties are levied in respect of non deduction of tax at source from certain reimbursements made by the assessee to Braitrim UK Ltd. However, vide our order of even date, we have deleted the related tax withholding demands raised under section 201 r.w.s. 195 on the ground that the payments in question were not taxable in the hands of the recipient. That is what a co-ordinate bench decision dated 21st August 2019 has also held in the case Braitrim UK Ltd.

4.

Learned representative fairly agree that in the above a situation, the impugned penalty is required to be deleted. We, therefore, uphold the plea of the assessee, hold that the assessee was not required to deduct tax at source from payments in question, and delete the impugned penalties. The assessee gets the relief accordingly.

5.

In the result, all the six appeals are allowed. Pronounced in the open court today on the 21st May, 2021.

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