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

Motwani Constructions Pvt. Limited, Khorda vs. Deputy Commissioner of Income Tax, Circle-1(1), Bhubaneswar

In the result, appeal of the assesee is allowed

ITA 452/CTK/2025[2013-14]Status: DisposedITAT Cuttack24 Sept 2025AY 2013-14

Bench: Shri George Mathan & Shri Rajesh Kumarआयकर अपील सं/Ita No.452/Ctk/2025 (नििाारण वर्ा / Assessment Year : 2013-2014) Motwani Constructions Pvt. Limited Vs Dcit, Circle-1(1), Cuttack At:- Ground Floor, Samabaya Bhawan, Janpath, Khurda 751022 Pan No. : Aagcm 2496 K (अपीलार्थी /Appellant) (प्रत्यर्थी / Respondent) .. नििााररती की ओर से /Assessee By : Shri S.K.Sarangi, Ar राजस्व की ओर से /Revenue By : Shri Vijay Singh, Sr. Dr सुनवाई की तारीख / Date Of Hearing : 24/09/2025 घोषणा की तारीख/Date Of Pronouncement : 24/09/2025 आदेश / O R D E R Per Bench : This Is An Appeal Filed By The Assessee Against The Ld.Cit(A), National Faceless Appeal Centre(Nfac), Delhi Order Dated 13/08/2025 Passed In Appeal No. Nfac/2012-13/10027542 For The Assessment Year 2013-2014. 2. It Was Submitted By The Ld. Ar That In The Course Of Assessment, The Ao Had Disallowed The Salary Paid To The Director To An Extent Of Rs.15 Lakhs On The Ground That There Is A Delay In Deduction Of Tds & Payment Of The Same To The Credit Of The Government. It Was The Submission That The Returns Of The Directors Have Also Been Filed Wherein The Tds Has Been Claimed & The Credits Have Been Allowed. It Was The Submission That No Disallowance Is Called For In View Of The Decision Of The Hon’Ble

For Appellant: Shri S.K.Sarangi, ARFor Respondent: Shri Vijay Singh, Sr. DR
Section 201Section 271C