| The Tax Publishers2020 TaxPub(DT) 4256 (Bang-Trib) INCOME TAX ACT, 1961
Section 271C
Where penalty under section 271C was imposed on account of failure to deduct tax at source on leave travel concession provided to employees, considering fact that issue was under appeal before High Court, admission of substantial questions of law by High Court leads credence to the bona fide of the assessee and merely because claim of the assessee was rejected by the revenue authorities would not make the assessee liable for penalty.
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Penalty under section 271C - Validity - Failure to deduct tax at source on leave travel concession provided to employees -
Revenue imposed penalty under section 271C on assessee on ground that assessee failed to deduct tax at source on leave travel concession. Revenue rejected plea of assessee that failure was on a reasonable belief that tax was not deducted under the impression that if the destination was India, irrespective of the fact that en-route journey is out of India, entire Leave Travel Allowance was exempt. Held: Against order of Tribunal holding assessee was in default for non-deduction of tax at source, assessee preferred appeal before High Court and the question as to whether assessee is guilty of non-deduction of tax at source or not, was to be decided in such appellate proceedings. Mere admission of appeal by High Court on substantial questions of law, would make it apparent that additions made were debatable. Admission of substantial questions of law by High Court leads credence to the bona fide of the assessee and merely because claim of the assessee was rejected by the revenue authorities would not make the assessee liable for penalty.
Followed:Syndicate Bank, Banashankari v. Addl. CIT (TDS) 2019 TaxPub(DT) 4960 (Bang-Trib).
REFERRED : CIT, New Delhi v. Eli Lilly & Company (India) (P) Ltd. [Civil Appeal No. 5114/2007, Order, dated 25-3-2009] : 2009 TaxPub(DT) 1585 (SC), CIT & Anr. v. ITI. Ltd. (2009) 183 Taxman 219 (SC) : 2009 TaxPub(DT) 1347 (SC), Syndicate Bank v. Asstt. CIT [ITA 634/2017, dt. 22-11-2018], CIT & Ors. v. Ankita Electronics (P) Ltd. (2015) 379 ITR 50 (Kar) : 2015 TaxPub(DT) 5139 (Karn-HC), CIT & Addl. CIT Range-16, v. Rajajinagar Co-Operative Bank Ltd. [ITA 86 of 2006, Order Date 20-7-2011], Syndicate Bank, NGV Koramangala, Bangalore, Syndicate Bank, NGV Yelhanka, Bangalore, Syndicate Bank, Ganganagar, Bangalore v. Asstt. CIT (TDS), Range 32019 TaxPub(DT) 5479 (Bang-Trib), Syndicate Bank, Banashankari v. Addl. CIT (TDS) 2019 TaxPub(DT) 4960 (Bang-Trib), State Bank of India v. Asstt. CIT (TDS) (2019) 101 Taxmann.com 61 (JP-Trib.) : 2019 TaxPub(DT) 151 (Jp-Trib), Nayan Builders & Developers (P) Ltd. v. ITO [ITA No. 2379/Mum/2009, dated 18-3-2011] and CIT & Anr. v. Larsen & Toubro Ltd. 2. Asea Brown Boveri Ltd. (2009) 181 Taxman 71 (SC) : 2009 TaxPub(DT) 1348 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2011-12 & 2013-14
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