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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI
Before: SHRI R.K. PANDA & SHRI KULDIP SINGH
PER KULDIP SINGH, JUDICIAL MEMBER : The appellant, DCIT, Circle 1(1)(1), International Taxation, New Delhi (hereinafter referred to as ‘the Revenue) by filing the present appeal, sought to set aside the impugned order dated 13.01.2015 passed by Ld. CIT (Appeals)-42, New Delhi qua the assessment year 2009-10 on the ground that :-
“On the facts and circumstances of the case, the Ld. CIT (A) has erred in quashing the penalty u/s 271(1)(c) imposed by the AO.”
Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of completed assessment under section 143 (3) of the Income-tax Act, 1961 (for short ‘the Act’) at the income of Rs.1,39,62,22,521/- with addition of Rs.7,40,89,524/- on account of amount paid by the National Aluminium Company Limited (NALCO) to the assessee but has not declared in the return of income, penalty proceedings u/s 271(1)(c) of the Act were initiated by issuance of notice u/s 274 read with section 271(1)(c) of the Act. Declining the contentions raised by the assessee that the assessee had deducted TDS and on receipt of fresh certificates from NALCO had voluntarily revised its receipt during the course of assessment proceedings, the AO proceeded to levy the penalty to the tune of Rs.61,36,880/- @ 100% on the ground that the assessee has concealed the particulars of its income.
Assessee carried the matter by way of appeal before the ld. CIT (A) who has deleted the penalty levied by the AO by accepting the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
Assessee has not preferred to put in appearance despite issuance of notice of hearing for 20.08.2018 and 23.10.2018 and consequently, we proceeded to decide the present appeal with the assistance of the ld. DR as well as on the basis of documents available on the file.
We have heard the ld. Departmental Representative for the revenue to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
Undisputedly, during the assessment proceedings, the assessee has revised its tax computation by enhancing its Fee for Technical Services (FTS) by Rs.6,04,70,766/- and corresponding TDS credit by Rs.60,47,077/- on the said receipts. It is also not in dispute that the assessee has claimed same amount of tax refund as it had initially claimed i.e. Rs.70,25,596/-. It is also not in dispute that on receipt of TDS certificate from NALCO reflecting additional amount, the assessee had voluntarily revised its computation. IT is also not in dispute that the assessee is a French tax resident company, who has filed its first belated tax return u/s 139(4) in India voluntarily on 29.03.2011 which was within time.
In the backdrop of the aforesaid facts and circumstances of the case, order passed by the lower Revenue authorities and arguments addressed by the ld. DR for the Revenue, the sole question arises for determination in this case is:-
“as to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings while interpreting the provisions contained u/s 271(1)(c) of the Act?” 8. From the undisputed facts, it is proved on record that the assessee, a French tax resident company, is having no Permanent Establishment (PE) in India and as such is not maintaining any books of account or having any bank account in India qua its Indian operations. It is not in dispute that the assessee has to be dependent upon Indian parties for declaring TDS receipts in India in NRIs through their TDS certificates. When the assessee has filed its return of income on the basis of TDS certificates received at the time of filing of return from HINDALCO and NALCO, it cannot be faulted on any ground. Moreover when the assessee on receipt of FTS of Rs.6,04,70,766/- with corresponding TDS credit of Rs.60,47,077/-, has filed revised tax computation, there is no element of concealment of particulars of its income.
Not only this, when the NALCO had deducted admissible tax at source on all the payments made by it to the assessee, no benefit has been taken by concealing the receipts from the NALCO as the assessee has contract with NALCO for net taxes. Even the assessee has not claimed any refund in respect of the portion of TDS intimated subsequently by filling revised tax computation.
Furthermore, it is the case of the assessee that under bonafide plea that since make available clause is not satisfied the payment do not partake the character of FTS under Indo French DTA.
So, in view of what has been discussed above, we are of the considered view that answer to the question framed is in negative and the ld. CIT (A) has passed a valid and reasoned order by deleting the penalty which is otherwise not sustainable in the eyes of law. So, finding no illegality or perversity in the impugned order passed by the ld. CIT (A), present appeal filed by the Revenue is hereby dismissed. Order pronounced in open court on this 24th day of October, 2018.