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TMI Blog2022 (3) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... .CIT(A) deleting the penalty levied u/s 271C held the controverted facts establish that because of the peculiarity of the circumstances involved in this matter, namely, at the time of creation of the provision for brokerage expenses, neither the names of the brokers nor the amounts to be paid to them on account of brokerage was a determinable owing to the fluid situation, due to which TDS was not practically feasible to be deducted by the assessee, and more particularly in view of the fact that the assessee neither claimed nor availed any benefit of the provision made for expenses and paid due tax in full, we are of the considered opinion that the findings of the Ld. CIT(A) that there is neither any tax evasion nor loss of revenue to the Government do not suffer any illegality or irregularity, and that this tribunal cannot interfere with the same - Also see M/S. TELCO CONSTRUCTION EQUIPMENT CO. LTD., BANGALORE [ 2014 (3) TMI 1016 - ITAT BANGALORE] Since, the Ld. CIT(A) while cancelling the penalty levied u/s 271C has given justifiable reasons, therefore, in absence of any distinguishable features brought to our notice by the Ld. DR to take a contrary view than the view taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. He alleged that there was no reasonable cause within the meaning of section 273B of the Act for non-deduction of taxes at source. In view of the above and relying on various decisions, the JCIT levied penalty of ₹ 98,92,242/- for the F.Y. 2012-13 and ₹ 3,10,000/- for the F.Y. 2011-12 respectively. 3. In appeal, the ld. CIT(A), deleted the penalty levied by the JCIT for both the years by observing as under:- 4.2 I have considered the facts and circumstances of the case, submission of the appellant and perused the penalty order of the AO. I find merit in the argument of the appellant. It was submitted that certain provisions were created on an estimate basis (in the absence of receipt of actual invoices from the payee), which were debited to profit and loss account on conformity with the provisions of Accounting Standard 29, pertaining to provisions, contingent liabilities and contingent assets issued by the Institute of Chartered Accountant of India. Furthermore, the said provisions were reversed in the beginning of the next accounting year. The Appellant as a part of disclosure in the notes to tax computation (refer page 56 to 70 of the paper book) suo-moto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is no liability to deduct TDS even though the Auditor has clearly mentioned in its report in Form No.3CD, the amount of TDS deductible and section under which TDS deductible. (3) Whether the Ld. CIT(A) was right in holding that penalty was not leviable u/s 271C without appreciating the fact that the deductor assessee has failed to comply with the statutory provisions under section 194C, 1941 and 194J of the I.T. Act, 1961 by not deducting TDS on credit/payment of expenses. (4) Whether the Ld. CIT (A) has failed to appreciate the distinction between the relief provided to the assessee as per proviso to section 201(1) /201(1 A) and the provisions of section 271C where this relief is not available to the assessee. (5) Whether the Ld. CIT(A) was right in holding that the assessee was prevented by a reasonable cause to withholding taxes without considering the fact that the assessee was aware of the liability of deduction of TDS which is evident from the fact that the assessee itself deducted tax at source in the subsequent year. 5. The Ld. DR heavily relied on the order of the JCIT. 6. The ld. Counsel for the assessee, on the other hand, while supportin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ports and suo-motu disallowed the same under section 4o(a)(ia)/4o(a)(i) of the Act on a conservative basis. The computation of taxable income along with the acknowledgement copy of filing of return of income of the respective financial years is enclosed as part of the paper book (refer pages 1 to 11 of the paper book). In the subsequent year, on receipt of invoices, the applicable taxes were duly deducted and deposited within the stipulated timelines, without any intimation by the tax authorities. 8. We find identical issue had come up before the Coordinate Bench of the Tribunal in the case of ITO vs DLF Southern Homes Pvt. Ltd.(supra). We find the Tribunal under somewhat identical circumstances dismissed the appeal filed by the Revenue against the order of the ld.CIT(A) deleting the penalty levied u/s 271C by observing as under:- 4. We have carefully gone through the record. There is no contravention of the observations of the Ld. CIT(A) that in view of the fact that nothing was due to be paid on account of brokerage at the time of creation of the provision for brokerage expenses, TDS was not practically feasible to be deducted by the assessee on the provision so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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