2001 (10) TMI 760 - AT - Income Tax

Summary

The Appellate Tribunal ITAT Rajkot dismissed the department's appeal against the deletion of a penalty of Rs. 86,238 under section 271C of the Income-tax Act, 1961 for assessment year 1995-96. The penalty was imposed for failure to deduct tax at source on rent payments. The Commissioner (Appeals) deleted the penalty, considering the confusion regarding the applicability of tax deduction provisions to warehousing charges in the initial year of implementation. The Tribunal upheld the deletion of the penalty, emphasizing the assessee's good faith in rectifying the error promptly.