M/S. DISTRICT MANAGER,KAITHAL vs. JCIT (TDS), KARNAL
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the penalty under Section 271C should be deleted, following precedents from the Delhi High Court and ITAT. The assessee had already deposited the difference in TDS.
What were the facts?
The assessee paid commission to cooperative societies and deducted TDS at a lower rate than prescribed. A demand was raised for the short deduction, and penalty proceedings under Section 271C were initiated.
What were the issues?
Whether penalty under Section 271C is leviable when there was a bona fide mistake in TDS deduction and the differential tax has been paid.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(2)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Parma Nand81 citing268 ITR 172 · 2004 · HC
- CIT v. Mitsui & Company Ltd.55 citing272 ITR 545 · 2005 · HC
Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI
Before: SHRI R. S. SYAL & SHRI N. K. CHOUDHRY
Date of hearing: 16.08.2016 Date of Pronouncement: 17.08.2016 ORDER
PER N. K. CHOUDHRY, JM:
This appeal has been filed by the assessee against the order dated 09.09.2013 passed by CIT(A) Karnal for the Assessment Year 2009-10 on the ground that the penalty imposed on account of short deduction is time barred, illegal and arbitrary.
The brief facts of the case are that TDS inspection was carried out on 22.09.2009. It was noted by the TDS Officer that the deductor assessee had paid commission to various cooperative societies and deducted TDS @ 5.33% against the applicable rate o 10.30% in this year on the commission payment. Accordingly demand of R.1,46,918/- was created on account of short deduction of tax at source and penalty proceedings u/s 271C of the Act were initiated. JCIT, TDS Range, Karnal has imposed
2 I.T.A.No.2040/Del/2014 penalty @ 100% at Rs.1,46,918/- for short TDS paid by the appellant, which was been confirmed by Ld. CIT(A), Karnal vide impugned order dated 09.09.2013.
Aggrieved by the impugned order of Ld. CIT(A), assessee filed appeal before this Tribunal and submitted that the appellant is a Government organization and has no intention to conceal the facts. It was bona fide mistake in deducting TDS @ 5% instead of 10% and the appellant has already deposited the difference of TDS. Appellant further submitted that similar issue has been dealt with by ITAT in case of CIT Vs Bank of Nova Scotia and vide order dated 31.03.2006, it observed as under: “11 We have carefully considered submissions. In the instant case dealing with collection of tax u/s compensatory interest u/s 201 (1A), the assessee is that these amounts been paid so as to end dispute with the present appeals we are concerned the rival we are not 201 (1) or The case of have already Revenue. In with levy of penalty u/s 271-C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court had deleted levy of penalty u/s 271-C in the case of M/s. Itochu Corporation, reported in 268 ITR 172 (Del) and in the case of CIT Vs. Mitsui & Company Ltd. reported in 272 ITR 545. Respectfully following the aforesaid judgments of Hon’ble Delhi High Court and the decision of the 'ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee's appeal and cancel the penalty as levied u/s 271-C."
3.1 In civil appeal No.1704 of 2008, Hon'ble High Court in the above case has confirmed the order of ITAT and 3 I.T.A.No.2040/Del/2014 dismissed the appeal of the Revenue deleting the penalty in question.
Ld. D.R. relied upon the order of Ld. CIT(A) and does not raise any serious objection in following the principles laid down by Hon'ble Jurisdictional High Court on the issue.
Respectfully following the precedent laid down by Hon'ble Jurisdictional High Court, even otherwise, the appellant has already deposited difference of TDS, hence we allow the appeal of the assessee and delete the penalty imposed by the Assessing Officer and confirmed by Ld. CIT(A).
In the result, appeal filed by assessee stands allowed. Order pronounced in the open court on 17th Aug., 2016.
More judgments on Section 271C
- Sbi, (Erstwhile Sbbj), Baran vs ITO (TDS), KotaITA 143/JPR/2026[2017-18]Status: Disposed13 Oct 2026AY 2017-18
- Jagadish Panchal, Udaipur vs Additional Commissioner of Income Tax…ITA 314/JODH/2024[2016-17]Status: Disposed29 Sept 2026AY 2016-17
- Teampumkin Corporation, Mumbai vs Income Tax Officer (TDS)-2(3)(2), MumbaiITA 5318/MUM/2026[2018-19]Status: Disposed22 Sept 2026AY 2018-19
- Teampumkin Corporation, Mumbai vs Income Tax Officer (TDS)-2(3)(2) Mumbai…ITA 5281/MUM/2026[2019-20]Status: Disposed22 Sept 2026AY 2019-20
- Azure Green Tech Private Limited, Delhi vs Deputy Commissioner of Income Tax, Circle…ITA 6199/DEL/2026[2021-22]Status: Disposed21 Sept 2026AY 2021-22
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