Section 271C of the Income Tax Act

Income-tax Act, 2025: s.448

Section 271C of the Income-tax Act, 1961 corresponds to section 448 (Penalty for failure to deduct tax at source) of the Income-tax Act, 2025.

Read section 448 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 271C is CIT v. NHK Japan Broadcasting Corporation (305 ITR 137), cited in 96 of the 782 judgments on BharatTax that turn on this section.

Leading authorities on Section 271C

CIT v. NHK Japan Broadcasting Corporation
305 ITR 137 · 2008 · High Court
96
citing judgments

When no specific statutory period of limitation exists, proceedings under Section 201(1) and 201(1A) of the Income-tax Act, particularly for payments to non-residents, must be initiated within a reasonable period of four years. This limitation also applies to consequential penalty proceedings under Section 271C.

CIT v. Mitsui & Company Ltd.
272 ITR 545 · 2005 · High Court
55
citing judgments

Penalty under Section 271C for failure to deduct tax at source is not leviable unless contumacious conduct on the part of the assessee is established. Where such conduct is not proven, the High Court upholds the deletion of the penalty.

CIT v. Bank of Nova Scotia
380 ITR 550 · 2016 · Supreme Court
55
citing judgments

Penalty under Section 271C for failure to deduct tax is not leviable if the assessee acted under a bona fide belief and without contumacious conduct.

CIT v. Ankita Electronics Pvt. Ltd.
379 ITR 50 · 2015 · High Court
45
citing judgments

When the High Court admits a substantial question of law concerning an assessee's claim or alleged default, it indicates the assessee's bona fides, thereby preventing the imposition of penalties under sections 271(1)(c) or 271C. The mere disallowance of a claim or an addition by revenue authorities does not automatically lead to a penalty if the issue is debatable and pending appeal.

M/s Puri Construction Private Limited v. Addl. CIT & Ors.
159 Taxmann.com 444 · 2024 · High Court
42
citing judgments

External Development Charges (EDC) paid by a developer to a government body like Haryana Shahari Vikas Pradhikaran (HSVP) for a development project are contractual payments, making them liable for tax deduction at source under Section 194C of the Income-tax Act, 1961.

Bagalkot District Central Co-op Bank v. JCIT
48 Taxmann.com 117 · 2014 · ITAT
34
citing judgments

Co-operative societies engaged in banking are exempt from deducting tax at source on interest paid to members on time and other deposits, per Section 194A(3)(v).

CIT v. Harsiddh Construction Pvt. Ltd.
244 ITR 417 · 2000 · High Court
19
citing judgments

Penalty under section 272A(2) cannot be levied for mere technical or venial breaches of tax law, especially when the revenue has not suffered any loss due to the assessee's actions.

670 (Del-Trib) and Medi Assist India TPA P Ltd. v. DCIT (TDS), Circle 18(1)
184 Taxmann 359 · 2009 · High Court
11
citing judgments

The assessee is liable for demands raised under sections 201(1) and 201(1A) for failure to deduct TDS, even if interest periods require further verification.

Technologies v. CIT
195 Taxmann 323 · 2010 · High Court
9
citing judgments
CIT v. Frick India Ltd.
369 ITR 328 · 2014 · High Court
6
citing judgments

Judgments on Section 271C

ITO, WD-2(2), Kolkata vs. M/S Liver Foundation, Kolkata

In the result, Revenue’s appeal stands dismissed

ITA 459/KOL/2016[2010-2011]Status: DisposedITAT Kolkata15 Nov 2017AY 2010-2011

Bench: Shri Waseem Ahmed & Shri S.S.Viswanethra Raviassessment Year:2010-11 Income Tax Officer, M/S Liver Foundation, बनाम Ward-2(2)/Tds/Kolkata, 12, Dr. M. Ishaque / V/S. 10B, Middleton Row, 7Th Road, (Kyd Street), Floor, Kolkata-71 Kolkata-16 [Pan Callo 23274 B] .. अपीलाथ" /Appellant ""यथ" /Respondent Shri Arindam Bhttacharjee, Addl. Cit-Dr अपीलाथ" क" ओर से/By Appellant None ""यथ" क" ओर से/By Respondent 01-11-2017 सुनवाई क" तार"ख/Date Of Hearing 15-11-2017 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per Waseem Ahmed:- This Appeal By The Revenue Is Directed Against The Order Of Commissioner Of Income Tax (Appeals)-24, Kolkata Dated 30.12.2015. Assessment Was Framed By Ito Ward-58(3)/Tds, Kolkata U/S 201(1)/201(1A) Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) Vide His Order Dated 26.12.2009 For Assessment Year 2009-10. Penalty Levied By Jcit(Tds), Range-58, Kolkata U/S 271C Of The Act. 2. At The Time Of Hearing None Appeared On Behalf Of Assessee Though Notice Of Hearing Was Sent To Assessee Through Rpad. So We Decided To Hear The Present Appeal Without Appearance Of Assessee Or By Ld. Authorized Representative For The Assessee & After Hearing Ld. Dr. 3. The Only Issue Raised By The Revenue In This Appeal Is That Ld Cit(A) Erred In Confirming The Penalty Imposed By The Ao For Rs. 26,52,615.00 U/S 271C Of The Act

Section 115Section 194BSection 194JSection 201Section 201(1)Section 271C

JCIT, Coimbatore vs. Chroma Print India Pvt . Ltd., Coimbatore

In the result, the appeal filed by the Revenue is allowed

ITA 2083/CHNY/2016[2012-13]Status: DisposedITAT Chennai13 Oct 2017AY 2012-13

Bench: Shri Sanjay Arora & Shri Duvvuru Rl Reddyआयकर अपील सं./I T.A. No.2083/Mds/2016 "नधा"रण वष"/Assessment Year:2012-13 The Joint Commissioner Of M/S. Chroma Print India Pvt. Ltd., Income Tax, Tds Range, Vs. P.B. No. 5316, 53, Ganesh Nagar, Coimbatore. G.N. Mills Post, Mtp Road, Coimbatore. [Pan:Aaccc6021A] (अपीलाथ" /Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से / Appellant By : Ms. Veni Raj, Jcit ""यथ" क" ओर से/Respondent By : Shri T.N. Seetharaman, Advocate सुनवाई क" तार"ख/ Date Of Hearing : 03.08.2017 घोषणा क" तार"ख /Date Of Pronouncement : 13.10.2017 आदेश /O R D E R Per Duvvuru Rl Reddy: This Appeal Filed By The Revenue Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 2, Coimbatore Dated 30.03.2016 Relevant To The Assessment Year 2012-13. The Revenue Has Raised The Following Grounds In Its Appeal: “1. The Order Of Learned Cit(A) Is Opposed To The Facts & Circumstances Of The Case. 2. The Ld Cit(A) Has Erred In Holding That No Penalty Is Leviable On The Non Deduction Of Tds On Payment Of Labour Charges Worth

For Appellant: Ms. Veni Raj, JCITFor Respondent: Shri T.N. Seetharaman, Advocate
Section 201(1)Section 271CSection 273