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TMI Blog2018 (6) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the assessee has filed the certificates of the recipients with proof that the recipients have offered the income to tax in their hands, the assessee shall not be treated as an “assessee in default” u/s 201(1) of the Act. Since the assessee has not been treated as “an assessee in default” u/s 201(1) of the Act, the penalty u/s 271C are not sustainable as held by the Coordinate Bench of the Tribunal in the case of ACIT vs. M/s. Nexgen Educational Trust [ 2017 (11) TMI 191 - ITAT HYDERABAD] - Decided in favour of assessee. - ITA Nos.1156 to 1163/Hyd/2016 - - - Dated:- 30-5-2018 - Smt. P. Madhavi Devi, Judicial Member And Shri S.Rifaur Rahman, Accountant Member For The Revenue : Shri J. Siri Kumar, CIT(DR) and Smt. M.Narmada, D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee submitted that the demand in respect of nondeduction of tax u/s 201(1) may not be raised in view of the latest amendment to the Finance Act of 2012, which has come into effect w.e.f. 1.4.2013. The assessee submitted the certificate of Chartered Accountant in Annexure-A along with Form No.26A in support of their claim that the recipients of the payments, namely K-12 Educational Management (P) Ltd and M/s. Junior Varsity Educational Management (P) Ltd have admitted the receipts and also filed the returns of income before the due date. Taking the same into consideration, the AO observed that the demand u/s 201(1) is not to be raised separately but only and the interest u/s 201(1A) is to be charged. Accordingly orders u/s 201(1) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erent rates of TDS for different types of payments. In ITA Nos.1148 to 1151/Hyd/2016 dated 31.10.2017, similar issue had arisen and following the decision of the Hon'ble Delhi High Court in the case of CIT vs. Cadbury India Ltd (11 Taxmann.com 66 (Del.), it has held that when there is no demand u/s 201(1) of the Act, the provisions of section 271C are not applicable. 6. In view of our decision in the case of Sri Gotham Academy of General Technical Education (Supra), we are of the opinion that the appeals in ITA Nos. 1160 to 1163/Hyd/2016 need to be remanded to the file of the AO for verification of the transactions which are technical in nature, requiring deduction of tax at source u/s 194J of the Act and the services which require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the interest was leviable. As seen from the provisions of Section 271C, there should be a failure on the part of assessee to deduct tax or remit tax within the provisions so as to attract penalty. In this case, as seen from the facts, assessee in fact deducted tax at 2% under the provisions of Section 194C on the reason that the agreements entered were 'contractual in nature' and not for providing technical services. By virtue of the amendment brought to Section 201(1) by insertion of proviso w.e.f. 01-07-2012, demands u/s. 201(1) cannot be raised, if the deductee has satisfied that it has included the income and remitted the taxes. Therefore, whether it is deduction u/s. 194C or 194-J since the deductee has admitted the incomes an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was neither the case of mala fide intention nor that of negligent intention or want of bona fide, but a case of misconceived belief of applicability of one provision of law. It could not be said judiciously that the assessee had failed to comply with the provision of sections 194-1 and 194J without reasonable cause [Para 8]. Therefore, the findings as recorded by the Tribunal were justified and the instant appeals were to be dismissed . 7. Ld.CIT(A)'s findings on the issue is in consonance with the principles laid down and consistent with the provisions of the Act. The provisions of Section 273B are applicable as assessee has a reasonable cause for non-deduction of tax at 10% as against 2% it has deducted. In fact, the opinion o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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