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TMI Blog2020 (12) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... or Solutions P Ltd [ 2019 (4) TMI 193 - ITAT BANGALORE ] and Infineon Technologies India P Ltd [ 2020 (8) TMI 808 - ITAT BANGALORE ]. Subsequently, Hon ble Karnataka High Court in CIT vs. Samsung Electronics Co. Ltd [ 2011 (10) TMI 195 - KARNATAKA HIGH COURT ] held that the payments made for purchase of software was in the nature of royalty and the said decision came to be pronounced on 15.10.2011. Accordingly, the present facts of case assessee could not be treated as an assessee in default in respect of payments made for purchase of licensed software prior to 15.10.2011, being the date of pronouncement of the decision in the case of Samsung Electronics Co. Ltd (supra). Accordingly, demand raised in the hands of the assessee u/s 201(1) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions. The Appellant was therefore not required to deduct tax at source at the time of purchase of software license; b) Not appreciating the fact that, the impugned payments are towards purchase of computer software licenses and it constitutes payments for the purchase of 'copyrighted article or product' which is not liable for deduction of tax at source both under the provisions of the Act (section 194J as well as section 195) and the provisions of respective tax treaty. Accordingly, provisions of section 201 are not attracted; c) Passing order u/s 20](1) (IA) after almost seven years appreciating that the same is barred by limitation. 3. The learned CIT(A) has erred in not appreciating that in the absence of limitation period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as CIT(A)), to the extent prejudicial to the Appellant is bad in law. GROUND RELATED TO PENALTY U/S 271(l)(C): 2. The learned CIT(A) has erred in confirming the action of the AO in; a) Levying penalty u/s 271C, without appreciating the fact that, the requirement for withholding tax on purchase of software was mandated vide Finance Act 2012 as well as Karnataka High Court decision in the case of CIT vs. Samsung Electronics Co Ltd 203 Taxman 477 (Karnataka) was not in force when the Appellant complied with TDS provisions. The Appellant was therefore not required to deduct tax at source at the time of purchase of software license; b) Not appreciating the fact that, the penalty u/s 271C could not be levied in the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion thereon was claimed by assessee in the return of income. Assessment order was passed under section 143 (3) on 21/03/2014 wherein a disallowance was made under section 40(a)(ia) of the Act for non-deduction of tax at source on purchase of software. 3. On an appeal before Ld.CIT(A), the addition was deleted on the ground that section 40(a)(ia) of the Act cannot be invoked when computer software purchased was capitalised. 4. Subsequently, ACIT TDS Circle issued notice under section 201(1) and 201(1A) on 15/03/2017 for non-deduction of TDS on payments was of software. Order under section 201(1) and 201(1A) of the Act was passed on 30/03/2017 for want of details, regarding date of booking and nature of said expenditure in assessee s books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2016) 71 Taxmann.com 110. 10. Aggrieved by the orders passed by Ld. CIT (A) assessee is in appeal before us now. ITA No. 2019/B/2019 11. Assessee is aggrieved by levy of interest under section 201(1A) in the present facts of the case. 12. Ld.AR submitted that requirement of withholding tax on purchase of software was incorporated in the act by way of amendment in Finance Act, 2012. He submitted that decision of Hon ble Karnataka High Court in case of CIT vs Samsung Electronics Co.Ltd., Ors. (Supra) was not passed when the assessee purchased the software licenses. It was submitted that the said decision was rendered in the month of October 2011 that is financial year 2011-12. 13. On the contrary Ld. CIT DR relied on orders passed by authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents made for purchase of licensed software prior to 15.10.2011, being the date of pronouncement of the decision in the case of Samsung Electronics Co. Ltd (supra). Accordingly, demand raised in the hands of the assessee u/s 201(1) and 201(1A) cannot not be sustained and the demands raised in respect of payments made prior to 15.10.2011 in assessment year 2012-13 deserves to be quashed. 16. Above view is fortified by view taken by coordinate bench of this Tribunal by order dated 05/10/2020, in case of Acer India Pvt.Ltd.Vs DCIT in IT(IT)No.107-114 of 2018 for assessment years 2009-10 to 2012-13, this Tribunal held as under: 7. .In the instant case also, the assessee was under bonafide belief that there was no required to deduct tax at sourc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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