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TMI Blog2013 (6) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Educational Department there was bona fide belief under which the assessee operated that it was not required to deduct TDS. The explanation of the assessee that it believed that it had no choice but to transfer the funds received in its account and that it had no control over the executing agency to detain its payments has rightly been held as a reasonable cause as the bona fide belief is borne out from the fact that as soon as the said fact was pointed out to the assessee, the position was corrected. Accordingly department's ground is dismissed. - I.T.A .No.-249/Del/2012 - - - Dated:- 31-5-2013 - Diva Singh And T. S. Kapoor,JJ. For the Appellant : Sh. KVK Singh, Sr. DR. For the Respondent : None ORDER Per Diva Si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR, Sh. KVK Singh, on the facts available on record, it was considered appropriate to proceed with the present appeal filed by the Revenue ex-parte qua the assessee respondent on merit. 3.1. The relevant facts of the case are that the Income Tax Officer (TDS), Hardwar made a reference to the ACIT(TDS), Dehradun to initiate penalty proceedings u/s 271C on account of the assessee's failure to deduct tax at source from certain contract payments made by it during the financial year 2006-07 and 2007-08. The details set out in the penalty order are as under :- Financial Year Payments made Tax to be deducted Amount of tax Deducted 2006-07 19357000/- Rs.4,34,371/- Nil 2007-08 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct payments came to the notice of the Revenue. Accordingly he was of the view that the plea that the assessee had transferred the allotted amount of contract payments to the contractor directly as per the department's instruction after withdrawing the same did not absolve the assessee. Similarly he was of the view that the liability to pay income tax by the contractor does not help the assessee since as per the provisions of section 194C of the Act, the liability to deduct tax is cast on the person responsible for making the payment to the contractor. Accordingly, penalty was imposed upon the assessee. 4. In appeal before the First Appellate Authority, the arguments advanced before the ACIT(TDS) were reiterated on facts, the same are extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any work) in pursuance of a contract between a specified person and the resident contractor is required to deduct tax at source. For this purpose, payer himself is treated as a person responsible for paying any sum to the contractor. If, in case payer is a company, the company itself including the principal officer thereof, is the person responsible for paying to resident contractor." 4.1. Reliance in support of the view that penalty may be quashed was placed upon the following decisions :- i). Birla Cement Co. Ltd. vs CBDT Others 248 ITR 201 page 217; ii). Associated Cement Co. Ltd. Vs. CIT (1993) 111 CTR 165; iii). Woodward Governor India P. Ltd. Vs. CIT (2001) 168 CTR 394 5. Accordingly considering the explanation of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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