DISTRICT BASIC EDUCATION OFFICER,HATHRAS vs. ITO TDS ALIGARH, ALIGARH

This assessee’s appeal for assessment year 2017-18 arises against Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and Order No. ITBA/NFAC/S/250/2024-25/1066188381(1) dated 28.06.2024, in proceedings u/s 271C of the Income-tax Act, 1961, [hereinafter referred to as the ‘Act’].

Heard both the parties at length. Case file perused.

It emerges during the course of hearing that both the learned Lower authorities have levied section 271C penalty herein alleging non- deduction of TDS by the assessee/deductor, i.e. Uttar Pradesh Education, on payments made to various persons for carrying out the designated project assignments. The assessee/deductor is admittedly a government body who engaged various persons to whom payments in question have been held as consultancy services liable for TDS deduction u/s 194J of the Act.

The Revenue’s vehement argument in light of the Assessing Officer’s order date 24.01.2024 pressed u/s 201(1) of the Act is that the assessee had admittedly not deducted TDS on payments to various said experts. We find from a perusal of the said order that certain persons in the rank of coordinator etc. have been treated as so called experts without even arriving at a conclusion whether they are actual experts or mere assistants, as the case may be. We are of the considered view in these facts that impugned Section 201(1) penalty herein deserves to be deleted as the assessee has indeed offered a reasonable explanation in the given facts. Ordered accordingly.