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3.
HIGH COURT OF DELHI
ITA 505/2015
PR.COMMISSIONER OFINCOME TAX Appellant
Through: Mr.N.P. Sahni,Senior Standing counsel with Mr.Nitin Gulati,Advocate.
Through: Mr.N.P. Sahni, Senior Standing counsel
AND
6.
HON'BLE MR.JUSTICE VIBHU BAKHRU
31.07.2015 CM Nos.13222/2015.13223/2015 & 13243/2015(for exemption^
1.Exemptions allowed subjectto alljust exceptions.
2.The applications are disposed of.
ITA Nos.505/2015.506/2015.507/2015 & 514/2015
ORDER
3. These are appeals by the Revenue under Section 260A(1)against orders of the Income Tax Appellate Tribunal (TTAT') for various Assessment Years('AYs')on issue of penalty under Section 271C ofthe Income Tax Act,1961('Act'). ITA Nos.505,506,507&514of2015 Page2of[4]
4. A survey operation undertaken on 12'^ November 2008 under Section 133A ofthe Act revealed that the Respondent Assessee made payments of interest on loans borrowed from four Non-Banking Financial Companies ('NBFCs') without deducting tax at source. It was also found that the Respondent had not collected tax collected at source under Section 206C of the Acton the sale ofscrap.In that contextthatthe penalty waslevied under Section 271-C ofthe Act.
5. The Assessee succeeded both before the Commissioner ofIncome Tax (Appeals)[CIT(A)]as well as the ITAT who concurrently held thatthe nondeduction ofTDS wasfor bonafide reasons.Among the factors that^weighed with both the CIT(A)and theITAT were thatthe NBFCs in question had in their returns accounted for the interest amount earned and had paid the taxes thereon. Further,the repayment schedule was fixed and post-dated cheques were collected upfront which included the principal amount together with the interest.
6. It was urged by Mr. Sahni, learned Senior Standing counsel for the Revenue that it was only on account ofthe survey operation undertaken that the above lapse was detected and it is only thereafter thatthe Assessee made ITA Nos.505,506,507&514of2015 Page3of[4] good the lapse.
7. The Court is ofthe view that where two authorities have,in the context of penalty proceedings under Section 271 C ofthe Act, been convinced with the reasons offered by the Assessee and have concluded that the failure to deduct TDS was for bonqfide reasons, no substantial question oflaw arises for determination by the Court.
8. The appeals are dismissed.
S.MURALIDHAR,J VIBHU BAKHRU,J JULY 31,2015/dn ITA Nos.SOS,S06,S07& S14 of201S Page4of[4]