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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
PER PRASHANT MAHARISHI, A. M. 1. These are the five appeals pertaining to the same assessee. In
four appeals for two assessment years preferred by assessee
and revenue are concerning short deduction of tax u/s 201(1)
and Interest u/s 201 (1A) of the Income Tax Act involving
similar issues and one appeal preferred by assessee against
confirmation of penalty u/s 271C of the act for AY 2010-11 .
These appeals are argued issue wise by both the parties together
and, hence, these are disposed of by this common order.
ITA No. 626 and 627/Del/2013 are filed by the assessee against
the order of the ld Commissioner of Income Tax ( CIT(A)) dated
03.11.2012 for Assessment Year 2009-10 and 2010-11
respectively , wherein, he has held that the assessee is required
to deduct tax at source u/s 194C of the Act on payment made to
different parties. The assessee contested before him that the 626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
3 order passed by the ld Assistant Commissioner of Income tax
(TDS) (ACIT(TDS)) , Dehradun passed u/s 201(1) read with
section 201(1A) of the Act on 30.03.2011 is not sustainable. The
ld AO has also filed appeals for two assessment years contesting
the finding of the ld CIT (A) that the assessee is not required to
deduct tax at source of payment made to foreign companies’ u/s
195 but u/s 194C of the Act. The ld AO further aggrieved against
the finding of the ld CIT (A) that the assessee is not required to
deduct tax at source on payment to the State Trading
Corporation of India Ltd u/s 194C as the contract was for supply
of the equipment and not for work.
Briefly stated the facts are that the assessee is engaged in
organizing SAF winter games, 2009( games) in Uttrakhand and
is involved in development of infrastructure facilities such as
stadiums, ice skating rink, development of Ice skiing slopes,
ancillary sports facilities and other infrastructure for games.
Survey u/s 133A of the Act was conducted on 31.01.2011 and it
was noticed that assessee is required to deduct tax at sources on
payment made to various parties, which has not been deducted.
Summons u/s 131 of the Act was also issued to the Accounts
Officer of the assessee. The ld AO noted that the assessee has
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
4 made a payment to foreign party in France/ Italy on which no tax
is deducted u/s 195 of the act. The assessee has contested that
payment was made for the purchase of equipments and
therefore, no tax is required to be deducted. The ld AO rejected
the contention of the assessee and on reading of the contract
held that the payment is covered u/s 9(1)(vii) of the Act as fees
for technical services. Hence, provision of section 195 of the Act
applies and the assessee should have deducted tax at source of
Rs. 297045/- @10.5575%. He further charged interest u/s
201(1A) of the Act.
Further, he noted that the assessee has made various payments
to other parties and it was noted by him these parties are
engaged in construction work for games and TDS u/s 194C of
the Act should have been made on payments to them. Assessee
explained that these are government departments and payments
are made to these agencies in the form of grants based on
utilization of funds. Hence, it was contended that no tax was
required to deduct. The ld AO rejected the contention of the
assessee holding that payments are made by the assessee for
construction work of various infrastructure facilities. He further
held that grants are not shown that it has been transferred
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
5 without any control etc. He further held that the payments made
to various concerns are subject to TDS u/s 194C of the Act. He
therefore, held that TDS @2% should have been deducted and
worked out short deduction of Rs. 2806886/- and interest
thereon of Rs. 1018645/-.
In the above payment, assessee has also made payment of Rs.
8.69 crores to State Trading Corporation India Ltd., for which
assessee submitted that payment are for import of equipments
along with installation and commissioning charges and no tax is
required to be deducted thereon. AO also rejected this argument
holding that assessee has imported material/ equipment from
other through STC and it has acted as agent of the assessee and
incurred various incidental expenses such as duty, clearance
charges, freight and other expenses , which are covered u/s 194
C of the act.
Consequently, orders u/s 201(1) and 201(1A) of the Act were
passed on 30.03.2011 for AY 2009-10. Identical are the facts for
AY 2010-11.
Aggrieved assessee preferred appeal before the ld CIT (A) for both
the years and the ld CIT (A) also passed orders in both the cases
on the same date.
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
6 8. The ld CIT (A) with respect to the payment to foreign parties, he
considered the submission of the assessee that along with the
foreign companies and the Indian company a consortium was
formed where the clear responsibilities were laid down. The
foreign company was to supply the equipment for which separate
invoices were raised therefore, according to the assessee it is
payment for sale of goods, hence, contract for sale and not
contract for work. The assessee further stated that consortium is
an association of person and foreign party has merely sold goods
to the assessee tax was not required to be deducted on that. In
view of this, the ld CIT (A) held that as the payment is made to a
consortium and the whole payment was to be made for the
purpose of the work, tax is required to be deducted at source on
the payment made but same is not covered by the provision of
section 195 of the Act, but covered u/s 194C of the Act. He
accordingly directed the ld AO to compute the shortfall. The
revenue is aggrieved with this finding and has preferred appeal
before us. The assessee, is also aggrieved with direction of the ld
CIT (A) to compute TDS applying the provisions of section 194C
of the Act hence, it is in appeal.
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
7 9. With respect to payment made to other public sector
undertakings, assessee submitted that payments have been
made in connection with various works relating to construction
of the infrastructure works for the winter games and funds were
provided to these entities as grant without calling for any tenders
or certificate for utilization. It was further stated that these
recipients got the work done by engaging the services of various
contractors and deducted tax at source on the payment made by
them to those contractors. It was further submitted that there
was no contract entered into with these entities by the assessee
and no bills have been raised by those parties on the assessee
and it is merely a disbursement of grant, which does not
constitute consideration for any work-defined u/s 194C of the
Act. Ld CIT (A) rejected this contention of the assessee and held
that assessee is required to deduct tax on the payment made to
these entities as the payment is for the consideration for work
actually done by these parties. He further held that the
contractor engages the services of sub-contractor for getting work
done and deduct tax on the payment made to sub-contractor,
cannot absolve the original payee from tax deduction on payment
made to contractor. He therefore, upheld the applicability of
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
8 provisions of section 194C of the Act. Assessee aggrieved has
filed appeal before us.
The next issue was with respect to payment made to State
Trading Corporation of India for supply of material. As the
invoices raised by STC showed that the payment has been made
for import of equipment along with incidental jobs including
custom clearance, handling charges etc, AO held that on the
whole payment tax is required to be deducted u/s 194C of the
Act. Assessee submitted before the ld CIT (A) that STC has
undertaken to import and supply the equipment as per the
requirement of the assessee and the assessee has purchased the
material on which no tax is required to be deducted, as it is a
contract for sale of goods. The ld CIT (A) held that as the
Assessing Officer himself held that tax was required to be
deducted with reference to only incidental expenses but
computed the TDS on the supply of material also. In view of this,
he held that no tax is required to be deducted on this sum. The
revenue aggrieved with this finding, has preferred appeal before
us.
The ld Authorised Representative vehemently submitted that
when the payments have been made to a foreign party for
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
9 purchase of the goods, no tax is required to be deducted. He
further referred to the decision of Hon'ble Supreme Court in DIT
Vs. Linde AG Linde Engineering Division 73 Taxmann.com 212
(SC) and submitted that per circular No. 7 of 2016 dated
07.03.2016, no tax is required to be deducted as the consortium
fulfills the conditions as laid down in para 3 of that circular. In
view of this, he submitted that the ld CIT (A) has wrongly held
that tax is required to be deducted u/s 194C of the Act. In short
his argument was that tax is not at all required to be deducted
either u/s 195 or u/s 194C of the Act. He further relied on
several decisions. He further stated that property in the
equipment has passed outside India, which is evident from the
fact that customs duty was paid by the assessee itself and
assessee became owner of the goods prior to its shipment in
India. Hence, no income arises to the recipient in India.
With respect to the payment made to other parties, he stated that
assessee is merely a pass through entity that has been granted
sum for organizing the South Asian Winter Games and it did not
enter into any contract with the parties to whom payments have
been made. He further stated that all the recipient of the sum
has in turn given contracts to the various sub contractors and
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
10 they have already deducted tax at source on payments made by
them to such sub contractors. He further vehemently relied on
paper book page No. 34 which is a copy of letter dated
14.03.2011 and stated that payments were made as grant to
these parties and those parties have sent their utilization
certificate for the amount utilized during the financial year.
These executing agencies raise no bills; no payments were also
made according to works completed but it is advances. He
further stated that only lump sum grant was issued for getting
the work done and utilization received. He therefore, stated that
liability of TDS does not arise in these cases.
He also submitted that all these concerned agencies have already
included the above amount in their income and already paid
taxes on these incomes. He therefore, stated that if in such a
situation, if tax is recovered from the assessee, it would be an
exercise in futility as on the one hand the assessee is required to
pay the tax and on the other hand, the payee would be required
to claim the refund. He vehemently relied upon the decision of
the Hon'ble Supreme Court in Hindustan Coca Cola Beverages
pvt. Ltd Vs. CIT 293 ITR 226 for this proposition. He further
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
11 relied upon his submissions made at page No. 1 to 15 of the
paper book also.
The ld Departmental Representative (DR) vehemently supported
the order of the ld AO and submitted that with respect to the
payment to the foreign party stated to be made towards purchase
of goods is in fact payment made to an Indian party which is an
AOP for the complete work and not only for sale of goods, then
payments made such consortium should have been subjected to
TDS. AOP circular is for AO of AOP to decide how it is to be
taxed; it has no relevance as far as the liability of assessee for
TDS is concerned. With respect to the other payment, he
submitted that assessee is the party who got the work executed
and made the payment. Therefore, provisions of section 194C of
the Act are clearly applicable to the facts of the case. He
submitted that even if the recipients has deducted tax on the
works contract executed by sub-contractors cannot absolve the
assessee from its duty to deduct tax at source on payment made
to them. He further stated that in case of STC the tax should
have been deducted by the assessee on total sum including the
payment for purchase of goods as STC has incurred several
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
12 expenditure on behalf of assessee, which amounts to carrying on
of the work as per provisions of section 194C of the Act.
We have carefully considered the rival contentions and perused
the orders of the lower authorities. The brief facts of the case are
that assessee is a body registered under The Societies
Registration Act set up for organizing the South Asian Winter
Games 2009. It is implementing agency for the games. The ld AO
has conducted survey u/s 133A of the Act and found that on
several payments assessee has failed to deduct tax at source and
therefore, the orders u/s 201(1) and 201(1A) of the Act were
passed. Ld CIT (A) granted part relief. Various issues arising in
the appeal are dealt with hereinafter.
On payment made to foreign companies, who are members of the
consortium AOP who won the bid, the ld AO held that tax is
required to be deducted u/s 195 of the Act and the ld CIT (A)
held that these are the payment made to an AOP and therefore,
tax is required to be deducted u/s 194C of the Act. The assessee
has entered into a consortium agreement with two foreign
companies and one Indian company for rendering services with
respect to construction of water storage and installation of ski lift
and comprehensive maintenance for three years. The assessee
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
13 has stated that the consortium has demarcated duties with
respect to each of the parties. The foreign parties were only to
supply various equipments and Indian party was to install those
equipments. The assessee submitted the agreement of the
consortium, which is placed at page No. 48 of the Paper book.
According to the agreement, scope of the services by the various
parties is described in Appendix A. On reading of the scope of
services, it is apparent that Snow star SPA was to supply various
equipments and the scope of services of Pomagamsky SA was to
supply various equipments and warranty for equipments. The
Indian party Spaceage Power Ltd was to install and perform the
civil work. The payment was also specified separately as per
clause 7 of the agreement. Each of the party was also responsible
for the work carried out by them. The services are also specified
in clause 1 of the agreement. The responsibility is also mentioned
at page No 78 to 80 of their agreement. In such a contract, it was
an issue whether the consortium constitutes and association of
person i.e. a separate entity for charging of the tax or whether
each of the members is liable on their individual share of the
contract. This aspect has been clarified by the CBDT by issuing
Circular No. 7/ 2016 dated 07.03.2016 wherein, para NO. 3 it
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
14 has laid down certain conditions and on fulfilling such conditions
the consortium will not be treated as an AOP. In the present case
all the members are independently responsible for executing their
work. The foreign parties are required to supply the equipments
only along with the warranty. Further, the payments have been
made directly to those parties and naturally, each of them
individually charged to tax on their profits or losses. It is
apparent that the common management is only for
administrative convenience. Assessee has also made payment
directly to the foreign equipment suppliers. It is not shown to us
that any of the conditions stated in that circular are not fulfilled.
In view of this, we hold that assessee has made payment to the
foreign parties independently, directly and it shall be chargeable
to tax in their own hands. Now the issue arises is that whether
payment made to them is subject to deduction of tax u/s 195 in
the hands of those parties or not. The assessee has shown bills
raised by those parties placed at page No. 99 to 100 of paper
book. The custom duty has also been paid by the assessee. The
bills have also been raised by those parties on the assessee itself.
The payments are also made as advances through letter off
credits. On looking at the various bills, it is found that goods
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
15 have been shipped by those parties from outside India. It is not
shown by the revenue that title of the goods has passed in
India. Contrary to that, it is consistently claimed by the assessee
that title in the goods has passed outside India. Further though
ld AO has held that tax is required to be deducted t sources on
such payments but it is not shown that how the income of
foreign parties who supplied equipments are chargeable to tax in
India. In view of this, it is apparent that title in the goods have
passed from the suppliers to the assessee outside India at the
port of shipment. In view of this, it is not controverted that no
income has accrued to those parties in India in terms of
provisions of section 5 and section 9 of the Act, therefore,
provisions of section 195 does not apply to these payments. In
view of this, we hold that assessee was not required to deduct
Tax at source either u/s 194C or section 195 of the Act on
payments made to Snowstar SPA Italy and Pomagalsky SA. In
view of this ground No. 1 to 3 of the appeal of the assessee are
allowed.
Coming to the issue of various payments made by the assessee to
various parties which are public sector undertaking such as
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
i. Uttranchal Jal Sansthan, ii. Uttranchal Power Corporation Ltd,
iii. Uttar Pradesh Nirman Nigam Ltd,
iv. Winter Gems Federation of India, v. Gharwal Mandal Vikash Nigam Ltd.
The assessee has made these payments as an advance to the
parties for carrying out various works with respect to the Winter
games 2009. These payments are required to be tested u/s 194C
of the Act and whether tax is required to be deducted at source
on such payments. According to the provisions of section 194C of
the Act, tax is required to be deducted under following
circumstances:-
i. Tax is required to be deducted by the person who is
responsible for payment to any resident.
ii. Such payment has to be for the sum for carrying out any
work as defined under explanation (iv) of the Act.
iii. The payment has to be in pursuance with the contract
between the contractor and specified person. Specified
person has been defined under explanation (i) of the
section.
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
17 iv. The tax is required to be deducted at the earliest point of
time of credit to the account of contractor or the payment.
v. The provisions specify the prescribed percentage of tax
deduction.
vi. It is deduction of tax on gross sums paid unless otherwise
specified u/s 194C (3) of the act.
On plain reading of the above section it is clear that assessee is a
specified person covered under explanation (i)(g) being a society
registered under the Societies Registration Act 1860. Therefore,
the liability for deduction of tax rests on the assessee.
Further, all the parties to whom payment have been made are
residents and therefore, they are the recipients and receipts by
them is subject to deduction of tax at source.
The assessee has made payment to all the parties, to some of
them as advance and to some of them on various letters issued
by the assessee. Therefore, the fact of the payment is also proved.
The payment to the various parties has been made on account of
carrying on of certain work by them. The assessee is also
specifically form for the object of preparation for and holding the
South Asian Federation Winter Games in February 2009 allotted
to Indian Olympic Association. The functions of the assessee are
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
18 to collect funds through grants for furtherance of the aims and
objectives of the society. Assessee has stated that grants are
received by the assessee and in turn, it are disbursed to the
various recipients who were appointed as executing agencies to
get the work done through contractors. Further, those agencies
have also submitted their utilization certificate for the amount
utilized by them. Based on the above fact it is apparent that
assessee is an implementing agency on behalf of Indian Olympic
Association for preparation of these games. No doubt, the
assessee has received the funds as sponsorship and grants but
the responsibility is on the assessee to execute the entire
infrastructure for the games. Though the contractor may be
identified and engaged by the other organization, however, the
implementation and utilization is the sole responsibility of the
assessee. Otherwise, there is no other reason for the formation of
the above society. The society itself was registered on
06.02.2008. Further, the payments to above companies/ PSu
have been made by the assessee. Therefore, it is clear that
assessee is the person responsible for payments of sums to those
PSUs. In view of this it is apparent that the contract is between
the recipient of the income and the assessee. Hence, according to
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
19 us the assessee is responsible for TDS u/s 194C of the act on
payment made to these parties.
Merely because the assessee is provided grant for onward
distribution to these parties does not exclude the assessee from
the liability for deduction of tax at source u/s 194 C of the act,
as the assessee is responsible for making payments to these
parties and in fact, undeniably assessee has made the payments
and obtained utilization certificates.
Furthermore, it cannot be a reason for non-deduction of tax at
source that recipient of the income have onward distributed the
work to the sub contractors and recipient of the income have in
turn deducted the tax at source on payment made by them to
those sub- contractors. According to the provision of 194C of the
Act even, the contractor is also required to deduct tax at source
on payment made to their sub contractors.
In view of this we hold that payment made to the above parties
are subject to tax deduction at source u/s 194C of the Act and
assessee is liable to deduct tax at source u/s 194C of the Act.
Therefore, to this extent we uphold the order of lower
authorities.
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
20 25. Next clinching, alternative argument made by the assessee is
that all the recipient of the income has already confirmed that
they have received the grant. Such certificates are placed in the
paper book from page No. 126 to 179 of the paper book. We have
perused the same. The argument of the assessee is that if tax is
recovered from the assessee it becomes refundable in the hands
of the recipient. To mitigate such an impact the proviso has been
added u/s 201 of the Act w.e.f. 01.07.2012 which provides that
any person who fails to deduct tax in accordance with chapter
XVII of the Act, shall not be deemed to be an ‘assessee in default’
on fulfillment of certain condition. The above amendment is on
similar line as argued by the appellant. Though the above
amendment has come in to effect from /7/2012 but
Honourable Delhi high court has held in Ansal Landmark
Townships Limited in 161 /2015 held that
“11. The first proviso to Section 210 (1) of the Act has been
inserted to benefit the Assessee. It also states that where a
person fails to deduct tax at source on the sum paid to a
resident or on the sum credited to the account of a resident
such person shall not be deemed to be an assessee in
default in respect of such tax if such resident has furnished
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
21 his return of income under Section 139 of the Act. No doubt,
there is a mandatory requirement under Section 201 to
deduct tax at source under certain contingencies, but the
intention of the legislature is not to treat the Assessee as a
person in default subject to the fulfillment of the conditions
as stipulated in the first proviso to Section 201(1). The
insertion of the second proviso to Section 40(a) (ia) also
requires to be viewed in the same manner.”
Therefore respectfully following the decision of Honourable Delhi
High court we set aside the order u/s 201 of the Act with a
direction that assessee may submit the requisite prescribed
detail in specified manner before the ld Assessing Officer and
then ld AO may decide the issue and, if found in accordance with
the law, shall not treat the assessee in default u/s 201 of the Act.
With respect to the interest u/s 201(1A) of the Act similar proviso
is also added and AO may work out, based on the details
furnished by the assessee, appropriate interest in accordance
with law. In view of this ground No. 4 and 5 of the appeal is
allowed accordingly.
With respect to the payment of the State Trading corporation
(STC), it is apparent that the equipment have been purchased by
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
22 the assessee as identified by it through STC. The STC has
incurred certain expenditure with respect to import of those
goods. The assessee has placed correspondence at page No. 122
and 123 of the paper book. According to that correspondence,
the state trading corporation has facilitated import of certain
equipment for the assessee and for clearance of the equipment
has incurred certain expenditure. The ld CIT (A) has held that no
tax is required to be deducted on the above sum. On careful
consideration of the orders of the lower authorities, the STC had
undertaken to import and supply the equipment as per the
requirement of the assessee. For the purpose of import of these
goods, the STC incurred certain expenditure such as installation
commissioning charges, handling charges, insurance, and other
payments. In this case, it is not the claim of the assessee that
STC has supplied the goods. In fact, STC has arranged for the
import of the goods as per requirement of the assessee. In view of
this, it is apparent that assessee has given work to the STC for
import of the material. Hence, according to us it is apparent that
such payment falls under the provisions of section 194C(3) of the
Act and tax is required to be deducted on the basis of the invoice
value stated therein. The invoices are not place before us. Hence,
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
23 we set aside this matter back to the file of the ld Assessing
Officer with a direction to assessee to produce the bills of STC etc
before ld AO who will examine them. If the invoice value shows
the value of the material separately then assessee is required to
deduct tax at source only on the invoice value excluding the
value of material. Findings given by us with respect to the
payment to the PSU with respect to Proviso to section 201 shall
also apply mutatis mutandis to this payment also. Accordingly,
the ground no. 2 of the appeal of the revenue is set aside to the
file of the ld AO.
In the result the appeal of the assessee and the revenue for AY
2009-10 and 2010-11 on the issue of demands raised on the
assessee by order u/s 201(1) and 201(1A) of the Act for both the
years are disposed off with above direction.
Now we come to the appeal of the assessee against the order of
the CIT(A), Dehradun dated 24.12.2014 passed for AY 2010-11
wherein, the penalty u/s 271C of the Act of Rs. 1152461/- levied
by the JCIT, TDS, Dehradun vide order dated 25.03.2013 is
confirmed.
The assessee submits that it has a bonafide belief that payment
made is not subject to TDS with respect to the PSU and STC. It
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
24 was stated that there was a reasonable cause for non-deduction
of tax at source. Hence, no penalty can be levied.
The ld DR supported the orders of the lower authorities.
We have carefully considered the rival contentions and perused
the orders of the lower authorities. On looking to the facts of the
case as discussed by us in appeal of the assessee and revenue in
201(1) and 201(1A) proceedings above, we find that the belief of
the assessee is bonafide and failure to deduct tax at source u/s
194C of the Act is for a reasonable cause. The ld Assessing
Officer could not show any contemptuous conduct on part of the
assessee for non-deduction of tax at source. There could also not
be any reason for non-deduction as assessee has made most of
the payments to the public sector undertaking. The Hon'ble
Supreme Court in the case of CIT Vs. Bank of Nova Scotia in 380
ITR 550 has approved the decision of the Hon'ble Delhi High
Court wherein, it has been held that it is necessary to establish
‘contumacious conduct’ on the part of the assessee for failure to
deduct tax at source for levy of penalty u/s 271C of the act. In
the present case, all the recipients have also furnished a
certificate that they have received the payment. In view of this,
we reverse the order of the ld CIT (A) confirming the levy of the
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
25 penalty of Rs. 1152461/- u/s 271C of the Act in absence of any
finding to show contumacious conduct on the part of the
assessee. Ld OA id directed to delete the penalty-levied u/s 271C
of the act. Accordingly, appeal of the assessee in ITA No.
1576/Del/2015 for AY 2010-11 is allowed.
Accordingly, ITA No. 626 and 627/Del/2013 filed by the assessee
are partly allowed and ITA No. 798 and 799/Del/2013 filed by
the AO are partly allowed. ITA No. 1576/Del/2015 for AY 2010-
11 filed by the assessee is allowed. Hence, all five appeals are
disposed off.
Order pronounced in the open court on 15/10/2018.
Sd/- Sd/-
(AMIT SHUKLA) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated:15/10/2018 A K Keot Copy forwarded to
Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
Date of dictation Date on which the typed draft is placed before the dictating member Date on which the typed draft is placed before the other member Date on which the approved draft comes to the Sr. PS/ PS Date on which the fair order is placed before the dictating member for pronouncement Date on which the fair order comes back to the Sr. PS/ PS Date on which the final order is uploaded on the website of ITAT date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the order
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,
626-627-798-799-Del-2013 and 1576-Del-2015-The Joint Secretary Organizing Committee for Winter Games,