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TMI Blog2014 (1) TMI 1838X X X X Extracts X X X X X X X X Extracts X X X X ..... Act dated 18/08/2010 is bad in law and on facts of the case, for want of jurisdiction and for various other reasons and hence, the same kindly be quashed. 2. The impugned penalty order u/s. 271C of the Act dated 18/08/2010 is bad in law and on facts of the case, being barred by limitation hence, the same kindly be quashed. 3. Rs. 1,79,309/-: The Ld. CIT(A) erred in law as well as on the facts of the case in confirming the impugned penalty u/s. 271C of the Act of Rs. 1,79,309/-. The penalty so imposed & confirmed being totally contrary to the provisions of law and facts kindly be deleted in full. 4. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed the penalty by observing in para 3.3 & 3.4 of the impugned order which read as under:- 3.3a The appellant allotted construction work to RSRDC by a memorandum of understanding. Thus there was a contract between the appellant and RSRDC. b. Appellant made payment of Rs. 79,13,000/- to RSRDC during the F.Y. 2007-08 without making TDS. c. As per sec. 194C(1) any person responsible for paying any sum in pursuance of a contract is required to deduct tax. Therefore, the appellant was also liable to deduct tax on the sum of Rs. 79,13,000/-. d. Sec. 196 specifies that TDS is not required to be made if the payment is made to: (i) the Government, or (ii) the Reserve Bank of India, or (iii) a corporation established by or under a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was further stated that the penalty could not have been imposed from the end of the month, in which action for imposition of penalty was initiated, which in the present case was on 24/12/2009. Therefore, the penalty could have been levied before 30/06/2010, however, in this case it was levied on 18/08/2010, so, it was barred by limitation. Reliance was placed on the following case-laws:- 1) Mitsui & Company Ltd. Vs. DCIT: (1999) 65 TTJ 1 (Del) 2) L.G. Electronics Inc. Vs. ACIT (2004) 84 TTJ 1029 (Del) 3) CIT Vs. Jitendra Singh Rathore (2013) 257 CTR 18 (Raj) It was further stated that on merit also, the assessee was not required to deduct the tax at source as per the provisions of section 194C(1) of the Act because an advance for mob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o order imposing a penalty under this Chapter shall be passed- (a) x x x (b) x x x (c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated whichever period expires later. 6. In the instant case, the proceedings for levying the penalty under section 271C was initiated vide order dated 19/03/2009 which falls in the financial year 2008-09 and ends on 31/03/2009 and the action for imposition of the penalty was initiated on 24/12/2009 when a reference was made by the AO to the Addl. CIT (TDS), Udaipur, accordingly 6 mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(A) was levied and paid. In view of the above facts, the ld. CIT(A) has held that there was a reasonable cause for failure to deduct TDS as the assessee was under the impression that it was not liable to deduct the TDS and accordingly the liability to deduct TDS was a debatable one, on which there could be two opinions. In view of the above, the ld. CIT(A) held that this is not a suitable case for levy of penalty u/s. 271C of the Act. 2.2. On consideration of facts and in the absence of any contrary facts/observations brought on record by the Department, we do not find any reason to interfere with the order of the ld. CIT(A). Hence, we uphold the order of the ld. CIT(A) and reject the ground of appeal taken by the Department. 8. In view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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