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TMI Blog2019 (2) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... to other NGOs/Charitable Institutions and business entities. The action of the A.O. was thus confirmed in principle. Alternative argument of the assessee that the payees concerned had duly accounted for the impugned receipts in their return of income and paid the taxes as per Law - alternative contention of assessee was accepted and assessee was directed to furnish documentary evidences in support of its contention before A.O. with a direction to A.O. to satisfy himself about the correctness of the claim of assessee and modify the tax demand accordingly. Interest was however chargeable for the default and it should be reviewed as per verification of the taxes paid by the recipients. The appeal of assessee was thus partly allowed. D.R, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as to why it should not be penalized for failure to deduct TDS during the year under appeal. The assessee filed written submissions in which it was explained that assessee-society was a unit of Uttarakhand Government formed by the Health Department of Uttarakhand for implementation of various schemes under the National Rural Health Mission Programme initiated by the Government of India in the States. All funds were received from the Government of India on the specific directions for expenditure oN health related object. During the year under question, it made payment to various NGOs for implementation of various objects of the schemes on behalf of the State Government. All the organisation to whom payments were made were registered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veral decisions in support of the contention. 3. The JCIT, however, did not accept the arguments advanced by the assessee on account of the fact that EMRI was providing technical and professional services and EMRI was taxable. Further, it was held that the payer, the payee and the payments are all covered within the scope of TDS provision. It was submitted that with regard to the NGOs even though they may not be taxable, there is no automatic exemption from TDS in respect of the payments to entities which may be registered under section 12A of the Income- Tax Act. The A.O. accordingly levied the penalty under section 271C of the Income Tax Act, 1961. 4. The penalty Order was challenged before the Ld. CIT(A) and same facts were reitera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction of TDS on a sum i.e., the payments and not on the income . Therefore, the findings of the Ld. CIT(A) are incorrect. 6. None appeared on behalf of the assessee, despite service of the notice. 7. We have heard the submissions of the Ld. D.R. Vide Order Dated 22.11.2018, one of the Department Appeal in ITA.No.1690/Del./2015 was heard and the present appeal was adjourned to 05.02.2019. The record reveals that the appeal of the Department in ITA.No.1690/Del./2015 for the A.Y. 2010-2011 have been dismissed by the Tribunal because of the low tax effect. In the present case, the A.O. passed the Order on account of default on the part of the assessee for non-deduction of the TDS vide order dated 9th January 2013 under section 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le, has confirmed the Order of the A.O. that assessee is liable to deduct TDS on the payments in question, therefore, Ld. CIT(A) should not have taken a contrary view in the penalty matter. Since the matter of quantum is restored to the A.O. for verifying the above claim of assessee, therefore, it would be reasonable and proper to restore the penalty matter also to the file of A.O. to pass the fresh Order in accordance with Law, after passing the Order under sections 201(1)/201(1A) of the Income Tax Act, 1961, as per the directions of the Ld. CIT(A). Whether assessee would have a reasonable cause shall be re-determined by the A.O, after giving reasonable, sufficient opportunity of being heard to the assessee. We, accordingly, set-aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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