Non-deduction of TDS on directors' fees & transaction charges not liable for penalty. Payments to directors allowed. Bona fide belief on transaction charges.

The Income Tax Appellate Tribunal ruled that non-deduction of TDS on directors' fees and transaction charges u/s 194J was not liable for penalty u/s 271C. It accepted the assessee's contention that payments to directors on account of sitting fees were allowable. Regarding transaction charges, the assessee had a bona fide belief that they were not covered u/s 194J(1)(ba), as there is no such head. Consequently, non-deduction of TDS was not justified for imposing penalty. The assessee's appeal was allowed. .....

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