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TMI Blog2017 (10) TMI 1316X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds in all the years except the amount of penalty involved. The grounds raised in AY. 2012-13 are extracted hereunder for the sake of record: "1. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) did not err in deleting the penalty amount of Rs. 4,83,61,419/- levied under section 271C of the Income Tax Act, 1961? 2. Whether on the facts and in the circumstances of the case, the Ld.CIT(A) did not err in deleting the penalty levied under section 271C of the Income Tax Act, 1961 by holding that the assessee was not required to deduct the tax as per the provisions of Section 194J of the Act even though the Service Agreement between the assessee and the deductee company clearly indicates that the services rendered wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(lA) has been partly allowed vide order No. ITA No. 0039/CIT(A)-8/Hyd/2015-16, dated 6th June, 2016. Keeping in view the facts, issues and circumstances of the instant case, penalty levied u/s.271C is deleted and grounds Nos. 2 to 10 are allowed". Revenue is aggrieved. 4. Ld. CIT-DR submitted that CIT(A) has erred in deleting the penalty as there is a failure on the part of assessee to deduct tax and remit to the Government as quantified in various orders in the impugned assessment years. 5. In response, Ld.AR was to submit that there was no demand u/s. 201(1) for AYs. 2012-13 to 2014-15 and hence the provisions of Section 271C are not applicable. For AY. 2015-16 as the return for that year was not filed, the AO raised the demand u/s. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /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 and paid taxes thereon, the question of short deduction or non-remittance of tax does not arise in this case. In fact there were no demands u/s. 201(1) so as to levy penalty u/s. 271C. 6.1. The Hon'ble High Court of Delhi in the case of CIT Vs. Cadbury India Ltd., [11 taxmann.com 66 (Delhi)] has considered the issue on similar facts of the case, wherein also the TDS was deducted u/s. 194C, whereas the AO demanded the deduction u/s. 194-I and 194-J, at a higher rate. The Hon'ble High Court has held as under: "It is a settled l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the AO has not yet become final as the issue of levy of interest u/s. 201(1A) itself is being restored to the file of AO for fresh examination in appeals in ITA Nos. 1152/Hyd/2016 to 1155/Hyd/2016, (separately considered). Considering this, we are of the opinion that there is no need to interfere with the order of the Ld.CIT(A). Accordingly, the grounds of Revenue are rejected. In fact the grounds are peculiarly worded as can be seen from the grounds itself. The Revenue is asking 'whether the CIT(A) did not err' (sic). In response, we can only say that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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