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| The Tax Publishers2019 TaxPub(DT) 6149 (Bang-Trib) INCOME TAX ACT, 1961
Section 271 (1) (c)
When High Court admitted substantial question of law on additions in respect of which penalty was confirmed, then it becomes apparent that issue certainly debatable. Thus, no penalty could be levied under section 271(1)(c).
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Penalty under section 271(1)(c) - Leviability - Disallowance under section 40(a)(i) for non-deduction of TDS - Debatable issue
AO rejected the books of account as per section 145 and computed disallowance under section 40(a)(i) for non-deduction of TDS under section 195 and also levied penalty under section 271(1)(c) for alleged 'tax evasion'. Assessee contended that no tax was required to be deducted as payments made under Ad Word distributor agreement were business profits in the hands of U.S. AE and were not in the nature of royalty that was taxed under section 9(1)(vi). Held: In view of the decision in CIT & Anr. v. Harsha N. Biliangady (2017) 79 Taxmann.com 376 (Karn) : 2016 TaxPub(DT) 0163 (Karn-HC), when additions in respect of which penalty was confirmed has been accepted by the High Court, leading to substantial question of law, then it becomes apparent that issue is certainly debatable. Thus, no penalty could be levied under section 271 (1) (c).
Relied:CIT & Anr. v. Harsha N. Biliangady (2017) 79 Taxmann.com 376 (Karn) : 2016 TaxPub(DT) 0163 (Karn-HC),CIT & Ors. v. Ankita Electronics Pvt. Ltd. (2015) 379 ITR 50 (Karn) : 2016 TaxPub(DT) 0163 (Karn-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2008-2009
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