9911796707
TMI Blog2008 (8) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... llant is a public sector company wholly owned by the State of Karnataka. The appellant-company has entrusted certain contracts to a foreign company known as M/s. Louis Berger International Inc., U. S. A., which is a non-resident company to provide technical know-how and consultancy to the appellant in terms of the contract. Similarly, it also entered into another contract with a company situated in the U. K. As per the terms and conditions of the agreement, the appellant-company in addition to making the payment towards the consultancy fees, the appellant has to reimburse the expenditure that may be incurred by those two companies, when they are in Karnataka (for the accommodation and conveyance of the staff of these two companies, when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances of the case, the Assessing Officer, the Commissioner of Income-tax (Appeals) as well as the Tribunal were justified in passing an order under section 201 of the Income-tax Act, without considering the cause and explanation shown by the appellant. (2) Whether the Assessing Officer was justified in levying interest invoking section 201(1A) of the Income-tax Act? 5. Having heard the counsel for the parties, we are of the opinion that the Assessing Officer has not considered the explanation offered by the assessee in levying the penalty under section 201 of the Income-tax Act. According to the learned counsel for the appellant, when the appellant being a company wholly owned by the State of Karnataka and had deducted taxes on behalf o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and there was no intention to violate the provisions of section 195 of the Income-tax Act. We do see some force in the arguments advanced by the learned counsel for the appellant on the first question of law. Since the authorities have not properly considered the explanation offered, when the assessee-company had deducted the tax at source in respect of the major payments made by it to a non-resident company, an ordinary man of prudence has to accept the explanation offered by the appellant. In the circumstances, we are of the opinion that the levy of penalty under section 201 in respect of the tax not deducted on account of the reimbursement made by the assessee has to be set aside. Accordingly, question No. 1 is answered in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t shall, without prejudice to any other consequences which he or it may incur, be deemed to be an assessee in default in respect of the tax: Provided that no penalty shall be charged under section 221 from such person, principal officer or company unless the Assessing Officer is satisfied that such person or principal officer or company, as the case may be, has (without good and sufficient reasons) failed to deduct and pay the tax. 8. Section 201(1A) also reads as hereunder : "(1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct (the whole or any part of the tax) or after deducting fails to pay the tax as required by or under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
