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TMI Blog2019 (10) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... perquisite in form of rent free accommodation in salary due to bonafide belief, which itself shows that assessee is law abiding and not having contumacious conduct, hence penalty should not be sustained In view the provisions of Section 273B of the Act, hold that there was a reasonable cause for the failure of the assessee, therefore, no penalty should be imposed - There is no merit in penalty so imposed U/s 271C - Decided in favour of assessee - ITA Nos. 1456 And 1457/JP/2018 (Assessment Years: 2014-15 And 2015-16) - - - Dated:- 16-7-2019 - SHRI RAMESH C SHARMA, ACCOUNTANT MEMBER Assessee by: Shri Vinod Kumar Gupta (CA) Revenue by: Smt. Roshanta Meena (JCIT) ORDER PER: R.C. SHARMA, A.M. These are the appeals filed by the assessee against the separate orders of ld.CIT(A)-3 Jaipur dated 02/11/2018 for the A.Y. 2014-15 2015-16 in the matter of imposition of penalty U/s 271C of the Income Tax Act, 1961 (in short, the Act). In ITA No. 1456/JP/2018 for the A.Y. 2014-15, the assessee has raised following grounds of appeal: 1. Impugned order passed U/s 250/271C is bad in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodation is essential and part parcel of the work assigned to them. The premises of the assessee are situated at a remote location near Jagatpura, Jaipur, where, there is no proper public transport connectivity and private transport is not available at all. Therefore, it is difficult for the professors and other staff to ensure their presence in time. Under such facts and circumstances, the assessee is obligated provide proper accommodation facilities so as to ensure that they can perform their duties in efficient manner. 5. I further observe that as soon as it came to the knowledge of assessee that rent free accommodation/accommodation provided at concessional rates is taxable as perquisite u/s 17(2) and TDS is liable to be deducted on notional value calculated under provision of Rule 3 of the Income Tax rules, assessee started deducting TDS on such perquisites i.e. from financial year 2015-16 onwards. Realizing the facts that assessee started deducting TDS of such perquisites, Ld. AO in the order passed u/s 201(1) 201(1A) for financial year 2015-16 (up to 12.08.2015) did not made any addition. Thus, the only issue emerged was non-deduction of TDS on rent fre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion on almost all payments or heads except not including said perquisite in form of rent free accommodation in salary due to bonafide belief, which itself shows that assessee is law abiding and not having contumacious conduct, hence penalty should not be sustained. In this regard, I further place our reliance on the decision of Hon'ble Supreme Court in case of Comm. of Income Tax Vs. Bank of Nova Scotia, Civil Appeal No. 1704 of 2008, vide order dated 07.01.2016 (Case Law # 5) has confirmed the order of ITAT and the ITAT in its order has held that:- 11. We have carefully considered the rival submissions. In the instant case we are not dealing with collection of tax u/s 201(1) or compensatory interest u/s 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 u/s 271-C 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 M/s. Itochu Corporation, reported in 268 ITR 172 (Del) and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty who do not have good and sufficient reason for not deducting the tax. The burden, of course, is on the person to prove such good and sufficient reason. In each of the 104 cases before us, we find that non-deduction of tax at source took place on account of controversial addition. The concept of aggregation or consolidation of the entire income chargeable under the head Salaries being exigible to deduction of tax at source under Section 192 was a nascent issue. It has not be considered by this Court before. Further, in most of these cases, the tax- deductor-assessee has not claimed deduction under Section 40(a)(iii) in computation of its business income. This is one more reason for not imposing penalty under Section 271C because by not claiming deduction under Section 40(a)(iii), in some cases, higher corporate tax has been paid to the extent of ₹ 906.52 Lacs (see Civil Appeal No. 1778/06 entitled CIT v. The Bank of Tokyo-Mitsubishi Ltd.). In some of the cases, it is undisputed that each of the expatriate employees have paid directly the taxes due on the foreign salary by way of advance tax/self-assessment tax. The tax-deductor-assessee was under a genuine and bona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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