Idea Cellular Ltd., Noida V. Addl. CIT (TDS), New Delhi

ITA 3367/DEL/2015

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9083 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 26-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST S DATED PASSED
• Keywords: Initiation of penalty proceedings; Reasonable cause; TDS; Set aside
• Section: 273B; 201(1); 27

Judgement Text

1 3366, 3367, 3368/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDICIAL MEMBER I.T.A. NO. 3366/DEL/2015 (A.Y. 2003-04 ) I.T.A. NO. 3367/DEL/2015 (A.Y. 2004-05 ) I.T.A. NO. 3368/DEL/2015 (A.Y. 2005-06 ) ORDER PER SUCHITRA KAMBLE, JM THESE THREE APPEALS ARE FILED BY THE ASSESSEE AGAIN ST THE ORDERS DATED 20.03.2015 PASSED BY CIT(A)-41, NEW DE LHI FOR ASSESSMENT YEARS 2003-04, 2004-05 AND 2005-06. 2. GROUNDS OF APPEALS ARE AS UNDER:- ITA NO. 3366/DEL/2015 (A.Y. 2003-04) GROUND NO. 1 : PASSING OF ORDER BARRED BY LIMITATIO N U/S 275 OF THE ACT VODAFONE IDEA LIMITED (FORMERLY KNOWN AS IDEA CELLULAR LIMITED) A-19, MOHAN CO-OPERATIVE INDUSTRIAL ESTATE, MATHURA ROAD, NEW DELHI - 110044 AAACB2100P (APPELLANT) VS ACIT TDS RANGE-50, NEW DELHI 4TH FLOOR, LAXMI NAGAR DISTT. CENTRE, NEW DELHI-110092 (RESPONDENT) APPELLANT BY SH. RONAK DOSHI, CA RESPONDENT BY MS. RINKU SINGH, SR. DR DATE OF HEARING 0 3 .07.2019 DATE OF PRONOUNCEMENT 10.07.2019 2 3366, 3367, 3368/DEL/2015 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-41, NEW DE LHI (CIT(A)) ERRED IN NOT ANNULLING THE PENALTY ORDER PASSED U/S 271C OF THE INCOME TAX ACT, 1961 (THE ACT) BY THE ADDITIONAL COMMISSIONER OF INCOME, RANGE 50, NEW DELHI (THE TDS OFFICER) WHICH WAS BARRED BY LIMITATION U/S 275 OF THE ACT. 2. THE APPELLANT PRAYS THAT, THE PENALTY ORDER, BEING TIME BARRED BE ANNULLED/SET ASIDE AS BEING AB-INITIO VOID AND B AD IN LAW. WITHOUT PREJUDICE TO GROUND I GROUND NO. II : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE TDS OFFICER IN LEVYING PENALTY AMOUNTING TO RS. 10,73,990/- U/S 27 1C OF THE ACT ON THE ALLEGED GROUND THAT THE APPELLANT HAS FAILED TO DEDUCT TAX AT SOURCE U/S 194H OF THE ACT. 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD : A) THE APPELLANT HAD ACTED UNDER AN HONEST AND BONA FI DE BELIEF THAT TAX WAS NOT DEDUCTIBLE U/S 194H OF THE ACT ON DISCOUNT (ALLEGED BY THE DEPARTMENT AS COMMISSION) GIVEN T O DISTRIBUTORS; B) APPELLANTS STAND WAS ALSO APPROVED BY THE HONBLE TRIBUNAL BEFORE THE HONBLE HIGH COURT REVERSED THOSE DECISI ONS AND THEREFORE THERE WAS A REASONABLE CAUSE. C) THERE WAS A REASONABLE CAUSE FOR NON-DEDUCTION OF TDS AND IN VIEW OF SECTION 273B OF THE ACT, NO PENALTY CAN BE LEVIED. D) WITHOUT PREJUDICE, IF THE MECHANISM TO DEDUCT TDS F AILS IN ABSENCE OF PAYMENT OR CREDIT, THERE IS A REASO NABLE CAUSE FOR NON-DEDUCTION OF TDS U/S 194H OF THE ACT. 3. THE APPELLANT PRAYS THAT THE PENALTY AMOUNTING TO 1 0,73,990/- LEVIED U/S 271C OF THE ACT BE DELETED. GROUND NO. III THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER AND / O R AMEND, WITHDRAW ALL OR ANY OF THE FOREGOING GR OUNDS OF APPEAL. ITA NO. 3367/DEL./2015 (A.Y. 2004-05) GROUND NO. I: PASSING OF ORDER BARRED BY LIMITATION U/S 275 OF THE ACT 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) - 41, NEW DELHI (CIT(A)) ERRED IN NOT ANNULLING THE PENALTY ORDER PASSED 3 3366, 3367, 3368/DEL/2015 U/S 271C OF THE INCOME TAX ACT, 1961 (THE ACT) BY THE ADDITIONAL COMMISSIONER OF INCOME, RANGE 50, NEW DE LHI (THE TDS OFFICER) WHICH WAS BARRED BY LIMITATION U/S 27 5 OF THE ACT. 2. THE APPELLANT PRAYS THAT, THE PENALTY ORDER, BEING TIME BARRED BE ANNULLED/SET ASIDE AS BEING AB-INITIO VOID AND B AD IN LAW. WITHOUT PREJUDICE TO GROUND I GROUND NO. II: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN UPHOLDING THE ACTION OF THE TDS OFFICER IN LEVYING PENALTY AMOUNTING TO RS. 30,76,179/- U/S. 2 71C OF THE ACT ON THE ALLEGED GROUND THAT THE APPELLANT HAS FA ILED TO DEDUCT TAX AT SOURCE U/S. 194H OF THE ACT. 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD: A) THE APPELLANT HAD ACTED UNDER AN HONEST AND BONA FI DE BELIEF THAT TAX WAS NOT DEDUCTIBLE U/S. 194H OF THE ACT ON DISCOUNT (ALLEGED BY THE DEPARTMENT AS COMMISSION) GIVEN T O DISTRIBUTORS; B) APPELLANTS STAND WAS ALSO APPROVED BY THE HONBLE TRIBUNAL BEFORE THE HONBLE HIGH COURT REVERSED THOSE DECISI ONS AND THEREFORE THERE WAS A REASONABLE CAUSE. C) THERE WAS A REASONABLE CAUSE FOR NON-DEDUCTION OF TDS AND IN VIEW OF SECTION 273B OF THE ACT, NO PENALTY CAN BE LEVIED. D) WITHOUT PREJUDICE, IF THE MECHANISM TO DEDUCT TDS F AILS IN ABSENCE OF PAYMENT OR CREDIT, THERE IS A REASO NABLE CAUSE FOR NON-DEDUCTION OF TDS U/S 194H OF THE ACT. 3. THE APPELLANT PRAYS THAT THE PENALTY AMOUNTING TO 30,76,179/- LEVIED U/S. 271C OF THE ACT BE DELETED. GROUND NO. III: THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER AND / O R AMEND, WITHDRAW ALL OR ANY OF THE FOREGOING GROUNDS OF APP EAL. ITA NO. 3368/DEL./2015 (A.Y. 2005-06) GROUND NO. 1 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-41, NEW DE LHI (CIT(A)) ERRED IN UPHOLDING THE ACTION OF THE ADDITIONAL COM MISSIONER OF INCOME, RANGE 50, NEW DELHI (THE TDS OFFICER) IN LEVYING PENALTY AMOUNTING TO RS. 62,00,145/- U/S 271C OF THE INCOME TAX ACT, 4 3366, 3367, 3368/DEL/2015 1961 (THE ACT) ON THE ALLEGED GROUND THAT THE APP ELLANT HAS FAILED TO DEDUCT TAX AT SOURCE U/S. 194H OF THE ACT . 2. HE FAILED TO APPRECIATE AND OUGHT TO HAVE HELD : A) THE APPELLANT HAD ACTED UNDER AN HONEST AND BONA FI DE BELIEF THAT TAX WAS NOT DEDUCTIBLE U/S. 194H OF THE ACT ON DIS COUNT (ALLEGED BY THE DEPARTMENT AS COMMISSION) GIVEN TO DISTRIB UTORS; B) APPELLANTS STAND WAS ALSO APPROVED BY THE HONBLE TRIBUNAL BEFORE THE HONBLE HIGH COURT REVERSED THOSE DECISI ONS AND THEREFORE THERE WAS A REASONABLE CAUSE. C) THERE WAS A REASONABLE CAUSE FOR NON-DEDUCTION OF TDS AND IN VIEW OF SECTION 273B OF THE ACT, NO PENALTY CAN BE LEVIED. D) WITHOUT PREJUDICE, IF THE MECHANISM TO DEDUCT TDS F AILS IN ABSENCE OF PAYMENT OR CREDIT, THERE IS A REASO NABLE CAUSE FOR NON-DEDUCTION OF TDS U/S 194H OF THE ACT. 3. THE APPELLANT PRAYS THAT THE PENALTY AMOUNTING TO 6 2,00,145/- LEVIED U/S 271C OF THE ACT BE DELETED. GROUND NO. II : THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER AND / O R AMEND, WITHDRAW ALL OR ANY OF THE FOREGOING GROUNDS OF APP EAL. 3. DURING THE HEARING THE LD. AR SUBMITTED THAT AS REGARDS GROUND NO. 1 AND 2 FOR ASSESSMENT YEAR 2003-04 AND 2004-05 THE SAME ARE NOT PRESSED. THEREFORE, GROUND NO. 1 AND 2 FOR ASSESSMENT YEARS 2003-04 AND 2004-05 ARE DISMISSED. 4. WE ARE TAKING UP ASSESSMENT YEAR 2003-04 AS THE FACTS ARE IDENTICAL IN ALL THE THREE ASSESSMENT YEARS. 5. THE BRIEF FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING CELLULAR MOBILE TELEPHONE SER VICES TO ITS SUBSCRIBERS. IN THE COURSE OF ITS BUSINESS, IT APP OINTS VARIOUS DISTRIBUTORS THE ASSESSEE IS ADMITTEDLY PAYING SERV ICE TAX ON THE 5 3366, 3367, 3368/DEL/2015 TELECOMMUNICATIONS SERVICES PROVIDED TO THE ULTIMAT E SUBSCRIBERS. THE ASSESSEE SUPPLIED PREPAID CARDS I.E. SUBSCRIBER IDENTIFICATION MODULE AND RECHARGE VOUCHERS (SIM/RV) TO ITS DIST RIBUTORS AT A DISCOUNTED PRICE. THE DISTRIBUTORS ARE FREE TO RESU PPLY THEM TO THE RETAILERS AT ANY PRICE SUBJECT TO THE MAXIMUM RETAI L PRICE. IT IS THE DISTRIBUTOR WHO PAYS THE DISCOUNTED PRICE TO THE AS SESSEE AND THERE IS NO PAYMENT OF ANY KIND MADE BY THE ASSESSEE TO T HE DISTRIBUTOR FOR THE ABOVE TRANSACTION. THE DISTRIBUTORS ARE REQ UIRED TO PAY THE ASSESSEE COMPANY, THE DISCOUNTED PRICE OF THE PRODU CTS PURCHASED BY THEM IN THE ADVANCE IRRESPECTIVE OF THE FACT THA T WHETHER SUCH PRODUCTS PURCHASED ARE IN TERN SOLD OR ARE REMAINED UNSOLD. THE DEDUCTOR COMPANY, M/S IDEA CELLULAR LTD. STARTED HI S COMMERCIAL OPERATION IN NOVEMBER, 2002. A SURVEY WAS CONDUCTED U/S 133(A) OF THE IT ACT, 1961 ON THE PREMISES OF THE COMPANY AT DELHI ON 24.03.2003. STATEMENT OF GENERAL MANAGER FINANCE AN D ACCOUNT WAS RECORDED ON OATH. THE ASSESSING OFFICER VIDE OR DER DATED 13.02.2004 HELD THAT THE TRANSACTION BETWEEN IDEA C ELLULAR LTD. AND ITS PREPAID DISTRIBUTOR IS THAT PRINCIPAL AND AGENT AT ALL TIMES AND PREPAID DISTRIBUTOR IS MERELY SELLING THE PREPAID S IM CARD / RECHARGE COUPONS ON BEHALF OF THE IDEA CELLULAR LTD . THE ASSESSING OFFICER HELD THAT AS A LOGICAL CONCLUSION, VARIOUS DISCOUNTS, BONUS OFFER TO THE PREPAID DISTRIBUTOR FALSE BILL WITHIN THE DEFINITION OF COMMISSION AND LIABLE TO DEDUCTION U/S 194H ACCORDI NGLY COMPANY WAS HELD LIABLE TO PAY THROUGH DEDUCTION/ NON-DEDUC TION U/S 201(1) AND INTEREST U/S 201(1A) OF THE INCOME TAX A CT, 1961. ORDER U/S 201(1) / 201(1A) WAS PASSED FOR ASSESSMENT YEA R 2003-04 ON 13.02.2004 AND THE MATTER WAS REFERRED TO ADDITIONA L CIT FOR INITIATION OF PENALTY PROCEEDINGS U/S 271C OF THE A CT. THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) AND CIT(A) VIDE ORDE R DATED 31.03.2005 UPHOLD THE ORDER OF THE ASSESSING OFFICE R. ACCORDINGLY THE ASSESSEE FILED APPEAL TO THE TRIBUNAL WHICH WAS ALLOWED IN FAVOUR OF ASSESSEE VIDE ORDER DATED 28 TH MARCH, 2008. AGAINST THIS ORDER THE REVENUE FILED APPEAL IN THE HONBLE HIGH COURT, NEW DELHI 6 3366, 3367, 3368/DEL/2015 AND THE HONBLE HIGH COURT VIDE ORDER DATED 19.02.2 010 DECIDED THE ISSUES IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. ACCORDINGLY NECESSARY APPEAL EFFECT WAS GIVEN THE ORDER OF THE HONBLE HIGH COURT FOR BOTH FINANCIAL YEARS AND THE NOTICE FOR PENALTY U/S 271C WAS ACCORDINGLY REVISED ON 20.01.2 011. THE ASSESSING OFFICER PASSED PENALTY ORDER AT A SECTION 271C READ WITH SECTION 274(1) OF THE ACT. 6. BEING AGGRIEVED BY THE PENALTY ORDER THE ASSESSE E FILED APPEAL BEFORE THE CIT(A) WHICH WAS DISMISSED BY THE CIT(A) . 7. THE LD. AR SUBMITTED THAT IT IS A SETTLED POSITI ON IN LAW THAT PENALTY U/S 271C OF THE ACT CANNOT BE IMPOSED IF TH ERE IS A REASONABLE CAUSE FOR ANY FAILURE ON THE PART OF THE ASSESSEE AS REFERRED TO VARIOUS PROVISIONS OF THE ACT. SECTION 273B OF THE ACT CLEARLY STATES THAT NO PENALTY SHALL BE IMPOSED ON THE PERSON OR ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFER RED TO IN THE SAID PROVISIONS. IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. THE HONBLE JURISDICTION OF DELHI HIGH COU RT IN CASE OF WOODWARD GOVERNORS INDIA PRIVATE LTD. VS. CIT (253 ITR 745). THE ASSESSEE APPOINTED PREPAID DISTRIBUTORS. AN AGREEME NT IS EXECUTED BETWEEN THEM. THE DISTRIBUTOR IS COMMUNICATED DISCO UNTED PRICE OF VARIOUS PRODUCTS LIKE SIM / RECHARGE VOUCHERS. THE DISTRIBUTOR COMMUNICATES ITS PURCHASE ORDER TO THE ASSESSEE AND PAYS THE DISCOUNTED PRICE UPFRONT IN ADVANCE TO THE ASSESSEE . THE ASSESSEE POST RECEIPT OF THE MONEY, DELIVER THE PRODUCTS TO THE DISTRIBUTOR WHO THEREAFTER RESELLS TO RETAILERS/ETC. THUS, FOR EXAMPLE, MRP OF A PRODUCT IS RS.100 AND DISCOUNTED PRICE IS RS.80. TH E DISTRIBUTOR PAYS RS.80 IN ADVANCE. THEREAFTER, THERE IS NO FINA NCIAL TRANSACTION BETWEEN ASSESSEE DISTRIBUTOR. THE DISTRIBUTOR IS NO T ACCOUNTABLE TO ASSESSEE AS TO AT WHAT PRICE IT SOLD TO RETAILER. T HUS, IT IS NOT THE CASE THAT HE FIRST SELLS TO RETAILER, RECOVERS PRIC E AND THEN RETAINS HIS COMMISSION AND ONLY REMITS THE NET SUM. THE ASS ESSEE IS 7 3366, 3367, 3368/DEL/2015 UNAWARE OF WHAT PRICE HE RESELLS, WHEN HE RESELLS E TC. THE ASSESSEE'S REASONABLE CAUSE FOR NON-DEDUCTION OF TA X AT SOURCE U / S . I94H WAS BASED ON THE FOLLOWING: RELATIONSHIP BETWEEN ASSESSEE AND DISTRIBUTOR WAS O N PRINCIPAL TO PRINCIPAL AND HENCE IN ABSENCE OF PRIN CIPAL AND AGENT RELATIONSHIP, SECTION 194H WOULD NOT APPLY; T HIS VIEW WAS AFFIRMED BY THE TRIBUNAL AND THEN REVERSED BY THE H ON'BLE HIGH COURT; WHILE THE HONBLE DELHI HIGH COURT DECIDED A GAINST BY STATING THAT SERVICES CANNOT BE BOUGHT AND SOLD, TH E KARNATAKA HIGH COURT STATES THAT RIGHT TO AVAIL TELECOM SERVI CES AND BE BOUGHT AND SOLD. WITHOUT PREJUDICE, IN ABSENCE OF PAYMENT OR CREDIT BY THE APPELLANT OF RS.20/- AND APPELLANT NOT BEING PERSON RESPONSIBLE TO PAY ANY INCOME TO DISTRIBUTOR, AGAIN SECTION 194 H DOES NOT APPLY AS MECHANISM TO DEDUCT TDS FAILS. RELIANCE IS PLACED ON: I.M. S. HAMEED VS. DIRECTOR OF STATE LOTTERIES (249 ITR 186) (KER.) AS SUBSEQUENTLY AFFIRMED BY THE DIVISIONAL B ENCH AND THE HON'BLE SUPREME COURT; II.CIT VS. QATAR AIRWAYS (332 ITR 253) (BOM.); III. PIRAMAL HEALTHCARE LTD. VS. ACIT (21 TAXMANN.C OM 225) (TRIB-MUMBAI) AS SUBSEQUENTLY AFFIRMED BY THE HON'B LE BOMBAY HIGH COURT IN CIT VS. PIRAMAL HEALTHCARE LTD (ITA N OS. 1427, 1428, 1545. 1622 OF 2012 AND 15 OF 2013); IV. SRL RANBAXY LTD. VS. ACIT (2011) (50 SOT 173) ( TDEL) LASTLY, THE DEPARTMENT STAND IS THAT THE APPELLANT SHOULD HAVE COLLECTED SAY RS.82 (RS.80 DISCOUNTED PRICE AN D RS.2. BEING 10% TDS ON RS.20 I.E MRP RS.100 LESS DISCOUNTED PRI CE). APPELLANT HUMBLY SUBMITS THAT THIS ARGUMENT WOULD I MPORT TCS PROVISIONS U/S.206C INTO I94H 8. THE LD. AR FURTHER RELIED UPON THE DECISION O F DELHI TRIBUNAL IN THE CASE OF ITO VS. G. B. MORRISON TRAVELS (P.) LIMITED (99 TTJ 8 3366, 3367, 3368/DEL/2015 117). IN THAT CASE, PENALTY WAS IMPOSED ON THE ASSE SSEE (CARRYING ON THE BUSINESS AS TRAVEL AGENTS FOR VARIOUS AIRLIN ES) UNDER SECTION 271C OF THE ACT FOR NOT DEDUCTING TAX UNDER SECTION 194H ON DISCOUNT GIVEN BY IT TO ITS SUB-AGENTS. FURTHER, TH E LD. AR RELIED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT (TDS) VS GM TELECOM, BSNL (ITA NO. 39 OF 2014) WHERE ON SIMILAR FACTS THE HIGH COURT HELD IN FAVOUR OF THE ASSESSEE CONFIRMING THE TRIBUNAL'S ACTION OF DELETION OF LEV Y OF PENALTY U/S 271C OF THE ACT ON THE GROUND THAT THE REASONABLE C AUSE WITHIN THE MEANING OF SECTION 273B OF THE ACT HAD BEEN SHOWN B Y THE ASSESSEE BY RELYING ON THE DECISION OF DELHI ITAT IN CASE OF IDEA CELLULAR LTD VS. DC1T (121 TTJ 352). THUS, THE LUCKNOW TRIBUNAL AND THEREAFTER THE HON'BLE ALLAHABAD HIGH COURT HAS DEL ETED PENALTY U/S 271C OF THE ACT BY RELYING ON THE DELHI TRIBUNA L'S DECISION IN THE ASSESSEE'S CASE, DESPITE DEPARTMENT'S REFERENCE TO THE DECISION OF CALCUTTA HIGH COURT (WHICH HAS IN TURN CONSIDERE D DELHI HIGH COURT DECISION). SINCE, THE TRANSACTIONS UNDER CONS IDERATION RELATE TO FY 2002-03, 2003-04 AND 2005-06 FOR WHICH INITIA LLY ITAT DECIDED IN FAVOUR AND WHERE THE HIGH COURT DECIDED AGAINST IN FEBRUARY 2010, NO PENALTY IS LEVIABLE U/S. 271C. TH E LD. AR SUBMITS THAT THE FACT THAT AS OF DATE, THERE ARE HI GH COURTS AND TRIBUNAL TAKING CONTRARY VIEW- AND FACT THAT SLP HA S BEEN ADMITTED, ITSELF SHOWS THAT ASSESSEE HAS A REASONAB LE CAUSE FOR NON DEDUCTION OF TAX AT SOURCE ON THE DISCOUNT ALLOWED TO THE PREPAID DISTRIBUTOR. THE LD. AR FURTHER PRAYED THAT PENALTY LEVIED U/S 271C OF THE ACT DESERVES TO BE DELETED. 9. THE LD. DR RELIED UPON THE PENALTY ORDER AND THE ORDER OF THE CIT(A). 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ISSUE ON WHICH TH E PENALTY U/S 271C IS IMPOSED IS DEBATABLE AS DIFFERENT COURTS HA VE TAKEN DIVERSE 9 3366, 3367, 3368/DEL/2015 VIEWS. THEREFORE, THE FACT REMAINS THAT THE ASSESSE E HAS REASONABLE CAUSE FOR NON DEDUCTION OF TAX AT SOURCE ON THE DIS COUNT ALLOWED TO THE PREPAID DISTRIBUTOR AS THERE ARE DECISIONS OF T HE HONBLE HIGH COURTS AND TRIBUNAL TAKING DIVERSE VIEWS. THUS, IT IS CONTESTING ISSUE AND THE ASSESSEE HAS REASONABLE CAUSE NOT TO DEDUCT THE TAX AT SOURCE. THEREFORE, THE ACTION OF NON DEDUCTION O F TAX IN THE PRESENT CASE WILL NOT ATTRACT THE PENALTY U/S 271C. SINCE THIS ISSUE IS DECIDED IN CASE OF ASSESSEES OWN CASE FOR EARLI ER ASSESSMENT YEARS THE SAME WILL BE FOLLOWED. 11. IN RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JULY, 2019 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10/07/2019 BR COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 10 ITA NO. 3366, 3367, 3368/DEL/2015 DATE OF DICTATION 0 3 .0 7 .2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 0 3 .07.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK