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TMI Blog2018 (3) TMI 1582X X X X Extracts X X X X X X X X Extracts X X X X ..... see against the order of the CIT(A)-1, Noida dated 31.03.2016 for the assessment year 2010-11 on the following grounds of appeal :- 1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the order of penalty under section 271C of the Income Tax Act. 2. That the learned Commissioner of Income Tax (Appeals) while upholding the order of penalty has failed to comprehend and appreciate that on the date of the passing of the order under section 201(1)there was no default of short deduction. 3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that the amounts have already been paid so as to end dispute with Revenue and there was no contumacious conduct on the part of the assessee which is necessary for levy of penalty under section 271C. 4. That in the circumstances of the case and in law, the impugned order passed by the learned Commissioner of Income Tax (Appeals) upholding the order of penalty under section 271C passed by the addl. CIT(TDS) is based upon assumptions, presumptions, whims and fancies, conjectures, surmises, preconceived notions and incorrect application of law and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25,65,011/- 23,3,249/- NIL Total Rs.93,17,920/- Rs.83,26,306/- NIL F.Y. 2009-2010 S.No, Date of credit Amount of TDS + interest Paid on 1 26.8.2009 14,60,281/- 146028/-+ 5841 = 7.1.2010 2. 31.12.2009 11,40,119/- 1,14,012/- 7.1.2010 3. Total Rs.26,00,400/- Rs.2,65,881/- 3. The assessee was liable for payment of royalty at the rate of 2% on sales made by the assessee on which TDS was to be deducted as per the agreements between them. During the course of assessment proceedings, the assessee submitted a written synopsis it was considered by the assessing officer while framing the assessment order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01(1)/201(1A) was passed by the ACIT (TDS) NOIDA on 22.01.2010.The assesse had deducted and paid the taxes in the Government Account prior to completion of assessment proceedings under section 201(1) of the Income Tax Act, 1961. During the course of penalty proceedings it was submitted by the assesse company that no penalty was ordinarily leviable under section 271C just because it was lawful to do so, unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct, contumacious or dishonest or acted in conscious disregard of its obligations. It is also submitted that the Central Board of Direct Taxes decided in the past that the proceedings under section 221 and 271C of the Act for levy of penalty not to be initiated in the case where the employer voluntarily came forward and paid the whole amount of tax under section 192 of the Act along with the interest payable under section 201(1A). In our case as on the date of the passing of the order under section 201(1) there was no default of short deduction at all and therefore the penalty provisions of section 271C are not attracted. The TDS return in FORM N0.26Q in respect of Royalty pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 201(1A). The case of the assessee is that these amounts have already been paid so as to end dispute with Revenue. In the present appeals we are concerned with levy of penalty under section 271C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court have deleted levy of penalty under section 271C in the case of M/s Itochu Corporation, reported in 268 ITR 172(Del) and in the case of CIT Vs. Mitsui Co Ltd reported in 272ITR 545. Respectfully following the aforesaid judgements of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd, we allow the assessee's appeal and cancel the penalty as levied under section 271C. Prayer We very humbly pray before your honour that since we deposited the tax on 7.01.2010 before the order was passed by the assessing officer under section 201(1)/201(1A) on 22.01.2010 and thus as on the date of passing the order under section 201(1) there was no default of short deduction at all and therefore the penalty provisions of section 271C are not attracted. 6. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon ble Delhi High Court have deleted levy of penalty u/s 271-C in the case of Itochu Corporation 268 ITR 172 (Del) and in the case of CIT v. Mitsui Company Ltd. 272 ITR 545. Respectfully following the aforesaid judgments of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee's appeal and cancel the penalty as levied u/s 271-C. 3. Being aggrieved, the Revenue took up the matter before the High Court of Delhi against the order of the Income Tax Appellate Tribunal. The High Court rejected the appeal only on the ground that no substantial question of law arises in the matter. 4. On facts, we are convinced that there is no substantial question of law, the facts and law having properly and correctly been assessed and approached by the Commissioner of Income Tax (Appeals) as well as by the Income Tax Appellate Tribunal. Thus, we see no merits in the appeal and it is accordingly dismissed. No costs. 9. Respectfully following the above judgeme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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