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| The Tax Publishers2019 TaxPub(DT) 6427 (Del-Trib) INCOME TAX ACT, 1961
Section 271C Section 194C
On facts, assessee did have bona fide reason for not deducting TDS and in the absence of any findings that the assessee had deliberately avoided the TDS provision and as such there was no contumacious conduct on the part of the assessee accordingly, AO was directed to delete the penalty.
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Penalty under section 271C - Validity - Reasonable cause - No contumacious conduct on part of assessee
Assessee was a private limited company engaged in the business of real estate development in the State of Haryana. The assessee company obtained license dt. 7-5-2012 from Directorate of Town and Country Planning (DTCP), Haryana, under section 3 of the Haryana Development and Regulation of Urban Areas Act, 1975 for development of land parcel into commercial colony upon payment of the requisite charges, including external development charges. AO had levied penalty under section 271C on the ground that assessee had not deducted TDS from EDC paid to HUDA under section 194C. Held: Under the facts and circumstances it was clearly borne out that assessee did have bonafide reason for not deducting the TDS. Firstly, for the reason that the license was granted by DTCP which was a Governing authority and it had clarified that EDC charges were paid to HUDA; and secondly, DTCP had issued a clarification to the effect that no TDS was required to be deducted precisely. In the absence of any findings that the assessee had deliberately avoided the TDS provision and as such there was no contumacious conduct on the part of the assessee. Accordingly, the AO was directed to delete the penalty.
Followed:RPS Infrastructure Ltd. v. Asstt. CIT (2019) 74 ITR (Trib) 596.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15 & 2015-16
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