Jaipur National University , Jaipur V. Joint Commissioner Of Income Tax, TDS, Jaipur

ITA 870/JPR/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 4040 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 06-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: Bonafide belief; Period of limitation; Question of law; Initiation of penalty proceedings; Non-deduction of tax; Reasonable cause; Time period of passing order; TDS
• Section: 273B; 201(1); 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 870/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2012-13 JAIPUR NATIONAL UNIVERSITY JNU CAMPUS, JAGATPURA, JAIPUR. CUKE VS. THE JCIT, TDS, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L-@ PAN/GIR NO.: AABTJ 0594 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RES PONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VINOD GUPTA (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 19/11/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 06/02/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), JAIPUR DATED 24.05.2018 FOR THE ASSESSMENT YEAR 2012-13 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. IMPUGNED ORDER PASSED U/S 250/271C IS BAD IN LA W AND ON FACTS BEING AGAINST THE PRINCIPAL OF NATURAL JUSTIC E AND FOR MANY MORE OTHER REASONS. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, LD. A.O. HAS ERRED IN LEVYING PENALTY UNDER SECTION 271 C OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS. 99,850/- ON T HE APPELLANT UNIVERSITY FOR ALLEGED NON-DEDUCTION OF TAX AT SOUR CE, FURTHER, ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 2 CIT(A) ERRED BY SUSTAINING THE SAME. THE PENALTY SU STAINED IS UNJUSTIFIED, ILLEGAL OR EXCESSIVE. 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW, LD. A.O. HAS ERRED BY HOLDING THE REVENUE SHARED BY THE APPELLANT UNIVERSITY WITH M/S AD EDUCATIONAL & RESEARCH SOCIE TY, ALLAHABAD IN TERMS OF A MOU SIGNED WITH THEM IN NATURE OF COM MISSION PAID TO THEM AND CONSEQUENTLY LIABLE FOR DEDUCTION OF TA X AT SOURCE BY THE APPELLANT UNIVERSITY, FURTHER, CIT(A) ERRED BY SUSTAINING THE SAME. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT TDS VERI FICATION PROCEEDINGS WAS CARRIED OUT AT THE ASSESSEES PREMISES ON 16.02 .2012 AND DURING THE COURSE OF SUCH VERIFICATION, IT WAS FOUND THE A SSESSEE HAD NOT DEDUCTED TDS WHILE MAKING PAYMENT TO M/S AD EDUCATI ON & RESEARCH ALLAHABAD. THEREAFTER, DURING THE COURSE OF PROCEED INGS U/S 201(1) R.W.S. 201(1A) OF THE IT ACT, THE MATTER WAS EXAMIN ED AND THE ASSESSING OFFICER OBSERVED THAT M/S AD EDUCATION & RESEARCH IS ACTING AS A PLACEMENT CELL FOR THE ASSESSEE AND IS HELPIN G IN PROCURING VARIOUS STUDENTS FOR ENROLMENT WITH THE UNIVERSITY. THEREFO RE, THE AMOUNT PAID BY THE ASSESSEE IS A COMMISSION FOR SERVICES PROVID ED IN PROCUREMENT OF STUDENTS WHICH IS LIABLE FOR TDS U/S 194H OF THE AC T WHEREIN TDS @ 10% SHOULD HAVE BEEN DEDUCTED BY THE ASSESSEE. ACCO RDINGLY, DEMAND OF RS. 99,850/- TOWARDS SHORT FALL IN TDS AND INTER EST U/S 201(1A) AMOUNTING TO RS. 11,781/- WAS RAISED ON THE ASSESSE E VIDE ORDER DATED 31.10.2012. 3. IN THE ABOVE FACTUAL BACKGROUND, THE FIRST CONTE NTION RAISED BY THE LD. AR IS THAT THE ORDER PASSED BY THE LD. JCIT , TDS IS BARRED BY LIMITATION. IT WAS SUBMITTED THAT AS PER SUB-CLAUSE (C) OF SECTION 275, ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 3 TIME LIMIT FOR PASSING PENALTY ORDER IS END OF FINA NCIAL YEAR IN WHICH ORDER IS PASSED I.E. 31.03.2013 OR 6 MONTHS FROM TH E END OF MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED WHICHEVER PERIOD EXPIRES LATER. IT WAS SUBMITTED THAT IN THE INSTANT CASE, LD. DCIT, TDS WHILE PASSING THE ORDER U/S 201(1) R.W.S 201(1A) OF THE ACT DATED 31.10.2012 HAS INITIATED THE PENALTY PROCEEDING AND THEREFORE, THE PENALTY ORDER SHOULD BE PASSED LATEST BY 30.4.2013 WHEREAS THE ORDER HAS BEEN ACTUALLY PASSED ON 29.08.2013. ALTERNATIVE LY, IT WAS SUBMITTED THAT JCIT(TDS) ISSUED THE SHOW-CAUSE ON 11.01.2013 AND BASED ON THE SAME, THE PENALTY ORDER CAN BE PASSED LATEST BY 31. 7.2013. IT WAS ACCORDINGLY SUBMITTED THAT THE ORDER SO PASSED U/S 271C OF THE ACT IS BARRED BY LIMITATION AND DESERVES TO BE QUASHED. 4. PER CONTRA, THE LD. DR HAS SUBMITTED THAT ON PE RUSAL OF THE ORDER PASSED U/S 201(1) R.W.S. 201(1A), IT IS CLEAR THAT A REFERENCE WAS MADE TO THE JCIT (TDS) FOR INITIATION OF PENALTY PROCEED ING U/S 271C OF THE ACT AND THEREFORE, IT IS NOT CORRECT THAT THE DCIT (TDS) WHILE PASSING THE ORDER U/S 201(1) R.W.S 201(1A) HAS INITIATED TH E PENALTY PROCEEDING. IT WAS FURTHER SUBMITTED THAT DCIT (TDS) IS NOT AN APPROPRIATE AUTHORITY FOR INITIATION AND LEVY OF PENALTY U/S 27 1C OF THE ACT AND THE APPROPRIATE AUTHORITY IS JCIT (TDS), THEREFORE ON T HIS ACCOUNT AS WELL, THE CONTENTION SO ADVANCED BY THE LD. AR DESERVES T O BE DISMISSED. IT WAS FURTHER SUBMITTED THAT THE DCIT (TDS) MADE A RE FERENCE TO THE JCIT (TDS) FOR INITIATION OF PENALTY PROCEEDINGS ON 22.01.2013 AND THEREAFTER, NOTICE WAS ISSUED U/S 271C TO THE ASSES SEE ON 11.02.2013 INSTEAD OF 11.01.2013 AS CONTENDED BY THE LD. AR. I T WAS FURTHER SUBMITTED THAT THERE WAS TYPING MISTAKE (IN TERMS O F DATE OF NOTICE) WHILE ISSUING THE NOTICE AND THE SAME WAS CORRECTED BEFORE ISSUANCE OF ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 4 THE NOTICE BY THE JCIT (TDS), JAIPUR, THEREFORE, IN ITIATION OF PENALTY PROCEEDINGS IS BY WAY OF NOTICE DATED 11.02.2013 AN D GIVEN THAT THE ORDER HAS BEEN PASSED ON 29.08.2013, THE SAME IS WI THIN THE LIMITATION PERIOD PRESCRIBED U/S 275(1)(C) OF THE ACT. IT WAS ACCORDINGLY SUBMITTED THAT THE CONTENTION SO ADVANCED BY THE LD . AR SHOULD BE DISMISSED. 5. IN HIS REJOINDER, THE LD. AR SUBMITTED THAT THE PROVISIONS CONTAINED U/S 271D & 271E ARE AKIN TO PROVISIONS CO NTAINED U/S 271C PARTICULARLY AUTHORITY WHO CAN IMPOSE PENALTY UNDER ALL THESE SECTIONS ARE SAME. THEREFORE PRINCIPLE LAID DOWN IN THE CASE RELATED TO PENALTY IMPOSED U/S 271D & 271E SHALL APPLY MUTATIS MUTANDIS IN THE CASES RELATED TO 271C. IT IS RELEVANT TO NOTE THAT THE HO NBLE SUPREME COURT HAD OCCASION TO DEAL THE POINT THAT WHEN THE PERIOD OF LIMITATION PRESCRIBED U/S 275 SHALL COMMENCE IN THE CASE OF CO MMISSIONER OF INCOME TAX VS. HISSARIA BROTHERS 386 ITR 0719 (SC) (2016) WHEREIN IT WAS HELD THAT, ON PERUSING THE JUDGMENT OF THE HIGH COURT, IT IS F OUND THAT PENALTY IMPOSED ON THE RESPONDENT HEREIN WAS A LSO SET ASIDE ON THE GROUND THAT THE PROVISIONS OF SECTION 271-D AND 271-E OF THE INCOME TAX ACT WERE INVOKED AFTER SIX MONTHS OF LIM ITATION AND, THEREFORE, SUCH PENALTY COULD NOT HAVE BEEN IMPOSED . SINCE THE OUTCOME OF THE JUDGMENT OF THE HIGH COURT CAN BE SU STAINED ON THIS ASPECT ALONE, IT IS NOT EVEN NECESSARY TO GO INTO O THER ASPECTS. LEAVING THE OTHER QUESTIONS OF LAW OPEN, THE APPEAL IS DISM ISSED. THERE SHALL BE NO ORDER AS TO COSTS IT WAS SUBMITTED THAT IN THE PRESENT CASE, THE PENA LTY ORDER SHOULD BE PASSED EITHER UPTO 31.03.2013 OR 30.04.2012 (WHICHE VER IS LATER) ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 5 WHEREAS ORDER HAS BEEN PASSED ON 31.08.2013. HENCE BARRED BY LIMITATION AND DESERVES TO BE QUASHED. 6. WITHOUT PREJUDICE TO ABOVE, IT WAS SUBMITTED BY THE LD AR THAT AS PER SUB-CLAUSE (C), TIME LIMIT FOR PASSING PENAL TY ORDER IS END OF FINANCIAL YEAR IN WHICH ORDER PASSED I.E 31.03.2013 (DATE OF PASSING OF ORDER IS 31.10.2012) OR 6 MONTHS FROM THE END OF THE MONTH IN WHICH PENALTY PROCEEDINGS WERE INITIATED. IN THE IN STANT CASE, LD. AO HAS MADE A REFERENCE FOR IMPOSITION OF PENALTY TO L D. JCIT (TDS) VIDE HIS LETTER DATED 22.01.2013 AS MENTIONED IN THE PEN ALTY ORDER. THE REFERENCE IS THE FIRST STEP OF IMPOSITION OF PENALT Y. WITHOUT REFERENCE, NO PENALTY CAN BE IMPOSED, THEREFORE, IT IS A STEP WHICH START BALL MOVING AND HENCE INITIATE THE PENALTY PROCEEDING. T HE POWER OF IMPOSING PENALTY VESTED WITH JCIT AND NOT INITIATIO N. THE IMPOSITION AND INITIATION IS TWO DIFFERENT ACTIVITIES. INITIAT ION IS A STEP FROM WHERE ANY ACTIVITY START AND WITHOUT DOING THAT NOTHING C AN HAPPEN AND IN THE INSTANT CASE I.E. REFERENCE BY JCIT (TDS) ON 22 .01.2013. UNDER THE FACTS AND CIRCUMSTANCES, ORDER SHOULD BE PASSED LATEST BY 31.07.2013 AS AGAINST 29.08.2013, HENCE ORDER UNDER CONSIDERATION IS BARRED BY LIMITATION AND DESERVES TO BE QUASHED. 7. FURTHER, OUR REFERENCE WAS DRAWN TO THE CO-ORDIN ATE BENCH DECISION IN CASE OF ACIT VS SUBHASH PARETA (ITA NO. 183/JP/2017 DATED 1.09.2017) WHEREIN IT WAS HELD AS UNDER:- 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFO RE THE LD CIT(A), THE ASSESSEE HAS DRAWN SUPPORT FROM TWO DECISIONS OF TH E HONBLE RAJASTHAN HIGH COURT IN CASE OF HISSARIA BROS REPOR TED IN 291 ITR 244 ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 6 AND SUBSEQUENT DECISION IN CASE OF JITENDRA SINGH R ATHORE REPORTED IN 352 ITR 327 WHICH HAS CONSIDERED THE EARLIER DECISI ON. WE REFER TO THE LEGAL PROPOSITION WHICH HAS BEEN LAID DOWN BY THE H ONBLE RAJASTHAN HIGH COURT DECISION IN CASE OF JITENDRA SINGH RATHO RE AS UNDER: 7. AFTER HAVING GIVEN THOUGHTFUL CONSIDERATION TO THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT AND HAVING EXAMINED THE RECORD, WE ARE CLEARLY OF THE VIEW THAT THIS APPEAL REMAINS MERITL ESS AND THE FORMULATED QUESTION DESERVES TO BE ANSWERED AGAINST THE APPELLANT PARTICULARLY FOR THE VIEW ALREADY TAKEN BY THIS COU RT IN THE CASE OF CIT V. HISSARIA BROS. [2007] 291 ITR 244/[2008] 169 TAXMAN 262 , WHEREIN, THIS COURT HAS SPECIFICALLY HELD AS UNDER:- '38. WE ARE, THEREFORE, OF THE OPINION THAT SINCE P ENALTY PROCEEDINGS FOR DEFAULT IN NOT HAVING TRANSACTIONS THROUGH THE BANK AS REQUIRED UNDER SECTIONS 269SS AND 269T ARE NOT RELATED TO THE ASSE SSMENT PROCEEDING BUT ARE INDEPENDENT OF IT, THEREFORE, THE COMPLETIO N OF APPELLATE PROCEEDINGS ARISING OUT OF THE ASSESSMENT PROCEEDIN GS OR THE OTHER PROCEEDINGS DURING WHICH THE PENALTY PROCEEDINGS UN DER SECTIONS 271D AND 271E MAY HAVE BEEN INITIATED HAS NO RELEVANCE F OR SUSTAINING OR NOT SUSTAINING THE PENALTY PROCEEDINGS AND, THEREFO RE, CLAUSE (A) OF SUB-SECTION (1) OF SECTION 275 CANNOT BE ATTRACTED TO SUCH PROCEEDINGS. IF THAT WERE NOT SO CLAUSE (C) OF SECTION 275(1) WO ULD BE REDUNDANT BECAUSE OTHERWISE AS A MATTER OF FACT EVERY PENALTY PROCEEDING IS USUALLY INITIATED WHEN DURING SOME PROCEEDINGS SUCH DEFAULT IS NOTICED, THOUGH THE FINAL FACT FINDING IN THIS PROCEEDING MA Y NOT HAVE ANY BEARING ON THE ISSUES RELATING TO ESTABLISHING DEFA ULT E.G. PENALTY FOR NOT ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 7 DEDUCTING TAX AT SOURCE WHILE MAKING PAYMENT TO EMP LOYEES, OR CONTRACTOR, OR FOR THAT MATTER NOT MAKING PAYMENT T HROUGH CHEQUE OR DEMAND DRAFT WHERE IT IS SO REQUIRED TO BE MADE. EI THER OF THE CONTINGENCIES DOES NOT AFFECT THE COMPUTATION OF TA XABLE INCOME AND LEVY OF CORRECT TAX ON CHARGEABLE INCOME; IF CLAUSE (A) WAS TO BE INVOKED, NO NECESSITY OF CLAUSE (C) WOULD ARISE.' 8. IN THE PRESENT CASE, THE NOTICE FOR ISSUANCE OF THE PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT FOR THE A LLEGED CONTRAVENTION OF PROVISIONS OF SECTION 269SS WAS IS SUED TO THE ASSESSEE, OF COURSE BY THE AO, ON 25.03.2003. EVEN IF THE MATTER HAD OTHERWISE BEEN IN APPEAL BEFORE THE CIT(A) AGAINST THE ORIGINAL ASSESSMENT ORDER AND THE APPEAL WAS DECIDED ON 13.0 2.2004, THE SAME WAS HARDLY OF RELEVANCE SO FAR THE PENALTY PROCEEDI NGS UNDER SECTION 271D WERE CONCERNED. AS HELD BY THIS COURT IN HISSA RIA BROS. (SUPRA), COMPLETION OF APPELLATE PROCEEDINGS ARISING OUT OF ASSESSMENT PROCEEDINGS HAS NO RELEVANCE OVER SUSTAINING SUCH P ENALTY PROCEEDINGS. AS HELD CLEARLY BY THIS COURT, IN SUCH A MATTER, CL AUSE (C) OF SECTION 275 (1) WOULD BE APPLICABLE. SECTION 275(1)(C) COULD BE NOTICED AS UNDER:- '275. BAR OF LIMITATION FOR IMPOSING PENALTIES. (1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE PASSED- ..... (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINA NCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FR OM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER.' ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 8 9. IN THE PRESENT CASE, THE FIRST SHOW CAUSE NOTICE FOR INITIATION OF PROCEEDINGS WAS ISSUED BY THE AO ON 25.03.2003 AND WAS SERVED ON THE ASSESSEE ON 27.03.2003. OBVIOUSLY, THE LATER PE RIOD ALSO EXPIRED ON 30.09.2003 WHEN SIX MONTHS EXPIRED FROM THE END OF THE MONTH IN WHICH THE ACTION FOR IMPOSING THE PENALTY WAS INITI ATED. THE ORDER AS PASSED BY THE JOINT COMMISSIONER OF INCOME TAX FOR THE PENALTY UNDER SECTION 271D ON 28.05.2004 WAS CLEARLY HIT BY THE B AR OF LIMITATION AND HAS RIGHTLY BEEN SET ASIDE IN THE ORDERS IMPUGNED. 10. IN VIEW OF THE ABOVE, OUR ANSWER TO THE FORMULA TED QUESTION OF LAW IS THAT EVEN WHEN THE AUTHORITY COMPETENT TO IMPOSE PENALTY UNDER SECTION 271D WAS THE JOINT COMMISSIONER, THE PERIOD OF LIMITATION FOR THE PURPOSE OF SUCH PENALTY PROCEEDINGS WAS NOT TO BE RECKONED FORM THE ISSUE OF FIRST SHOW CAUSE BY THE JOINT COMMISSI ONER; BUT THE PERIOD OF LIMITATION WAS TO BE RECKONED FROM THE DATE OF I SSUE OF FIRST SHOW CAUSE FOR INITIATION OF SUCH PENALTY PROCEEDINGS. F OR THE PURPOSE OF PRESENT CASE, AS OBSERVED HEREINABOVE, FOR THE PROC EEDINGS HAVING BEEN INITIATED ON 25.03.2003, THE ORDER PASSED BY T HE JOINT COMMISSIONER UNDER SECTION 271D ON 28.05.2004 WAS H IT BY THE BAR OF LIMITATION. THE CIT(A) AND THE TRIBUNAL HAVE, THUS, NOT COMMITTED ANY ERROR IN SETTING ASIDE THE ORDER OF PENALTY. (EMPH ASIS SUPPLIED) 6. IN LIGHT OF ABOVE FINDINGS OF THE LD CIT(A) WHI CH REMAIN UNDISPUTED BEFORE US, IT IS CLEAR THAT DURING THE COURSE OF AS SESSMENT PROCEEDINGS, THE AO HAS STATED THAT MATTER RELATING TO PENALTY P ROCEEDINGS IN RESPECT OF VIOLATION OF SECTION 269SS AND 269T ARE BEING RE FERRED TO THE ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 9 ADDITIONAL/JOINT CIT. IN OTHER WORDS, THE AO DIDN T INITIATE THE PENALTY PROCEEDINGS UNDER SECTION 271D AND SECTION 271E DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS. THERE IS NO MENTION OF SUC H PROCEEDINGS BEING INITIATED BY THE AO IN THE ASSESSMENT ORDER. FURTHER, THERE IS NO NOTICE UNDER SECTION 271D AND SECTION 271E WHICH HA S BEEN ISSUED BY THE AO TO THE ASSESSEE BY VIRTUE OF WHICH SUCH PENA LTY PROCEEDINGS CAN BE SAID TO HAVE BEEN INITIATED. IN LIGHT OF THE SA ME, WE ARE UNABLE TO ACCEDE TO THE CONTENTION OF THE ASSESSEE THAT THE D ATE OF PASSING OF THE ASSESSMENT ORDER SHOULD BE RECKONED AS THE DATE OF INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271D AND SECTION 271E OF THE ACT. THE SAID VIEW IS IN CONSONANCE WITH THE DECISION OF THE HON BLE RAJASTHAN HIGH COURT IN CASE OF HISSARIA BROS (SUPRA) AND SUBSEQUE NT DECISION IN CASE OF JITENDRA SINGH RATHORE (SUPRA). WE ACCORDINGLY A FFIRM BOTH THE ORDER OF THE LD CIT(A) ON THIS GROUND AND HOLD THAT THE P ENALTY ORDERS PASSED UNDER SECTION 271D AND SECTION 271E WERE NOT BARRED BY LIMITATION. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE ACCO RDINGLY DISMISSED. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE PENA LTY HAS BEEN LEVIED UNDER SECTION 271C OF THE ACT AND FOR THE PURPOSES OF DETERMINING THE LIMITATION PERIOD FOR PASSING THE PENALTY ORDER, TH E PROVISIONS OF SECTION 275(1)(C) ARE RELEVANT WHICH READS AS UNDER:- 275(1) NO ORDER IMPOSING A PENALTY UNDER THIS CHAP TER SHALL BE PASSED- (A). (B). ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 10 (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINA NCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTIO N FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPL ETED, OR SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FO R IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES L ATER. 9. ON PERUSAL OF THE ORDER PASSED BY THE AO U/S 201 (1) R.W.S. 201(1A) DATED 31.10.2012, IT IS CLEAR THAT A REFERE NCE WAS BEING MADE TO THE JCIT (TDS) FOR INITIATION OF PENALTY PROCEED ING U/S 271C OF THE ACT AND THE SAID REFERENCE WAS ACTUALLY MADE VIDE A OS LETTER DATED 22.01.2013 TO JCIT(TDS). THEREAFTER, THE JCIT(TDS) INITIATED THE PENALTY PROCEEDINGS U/S 271C BY WAY OF ISSUANCE OF NOTICE DATED 11.02.2013 TO THE ASSESSEE AND THE PENALTY ORDER U/ S 271C WAS THEREAFTER PASSED ON 29.08.2013 WHICH IS WELL WITHI N THE LIMITATION PERIOD PRESCRIBED U/S 275(1)(C) OF THE ACT. THE LD ARS CONTENTION THAT THE AO WHILE PASSING THE ORDER U/S 201(1) R.W.S. 20 1(1A) HAS INITIATED THE PENALTY PROCEEDINGS IS NOT FOUND FACTUALLY CORR ECT AS THERE IS NO NOTICE WHICH HAS BEEN ISSUED BY THE AO TO THE ASSES SEE. SECONDLY, THE CONTENTION OF THE LD AR THAT THE INITIATION OF THE PENALTY PROCEEDINGS SHOULD BE RECKONED FROM THE DATE WHEN THE REFERENCE WAS MADE BY THE AO TO JCIT(TDS) CANNOT AGAIN BE ACCEPTED AS THE INI TIATION OF SUCH PROCEEDINGS HAVE TO BE BY WAY OF ISSUANCE OF A NOTI CE TO THE ASSESSEE AND NOT BY MERE REFERENCE FROM THE AO TO JCIT(TDS). THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF HISSARIA BROTH ERS IS IN CONTEXT OF APPLICABILITY OF CLAUSE (C) TO SUB-SECTION (1) TO S ECTION 275 WHICH IS NOT IN DISPUTE AS FAR AS PRESENT CASE IS CONCERNED. FU RTHER, THE DECISION OF COORDINATE BENCH IN CASE OF SUBHASH PARETA DOESNT SUPPORT THE CASE OF ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 11 THE ASSESSEE AS IN THAT CASE ALSO, THE AO DIDNT IN ITIATE THE PENALTY PROCEEDINGS AND THE FIRST NOTICE WAS ISSUED BY ADD. CIT ONLY INITIATING THE PENALTY PROCEEDINGS AND THEREAFTER, THE ORDER W AS PASSED WITHIN THE PRESCRIBED LIMITATION PERIOD. IN LIGHT OF ABOVE DIS CUSSIONS, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUNGED ORDER IS NOT BARR ED BY LIMITATION AND THE CONTENTIONS SO ADVANCED BY THE LD AR IN THIS RE GARD ARE NOT FOUND ACCEPTABLE. 10. NOW COMING TO THE CONTENTION OF THE LD. AR ON MERITS. IT WAS SUBMITTED BY THE LD AR THAT THE ASSESSEE IS A UNIVE RSITY WHICH IS ENGAGED IN THE FIELD OF EDUCATION AND RUNS VARIOUS EDUCATIONAL AND PROFESSIONAL COURSES. AS PART OF ITS EDUCATIONAL AC TIVITIES, THE ASSESSEE HAS ENTERED INTO A MEMORANDUM OF UNDERSTANDING WITH M/S AD EDUCATION & RESEARCH AS PER WHICH BROADLY FOLLOWING SERVICES ARE PROVIDED: A. SEARCH AND RECOMMEND SUITABLE INSTITUTIONS WITH REQUIRED INFRASTRUCTURE AND FACILITIES TO BE ESTABLISHED AS IACC FOR CONSIDERATION BY THE UNIVERSITY. APPLICATION FOR THE APPOINTMENT OF INFORMATION ADMISSION COUNSELING CENTRE SHALL BE FORWARDED BY T HE SERVICE PROVIDER ALONG WITH A DEMAND DRAFT OF ASSOCIATION F EE PAYABLE TO 'DIRECTORATE OF DISTANCE EDUCATION, JAIPUR NATIONAL UNIVERSITY, JAIPUR, RAJASTHAN, PAYABLE AT JAIPUR. B. PROVIDE BOTH EXPERT AND MARKETING SERVICES TO UN IVERSITY IN OPENING INFORMATION ADMISSION COUNSELING CENTRE AND SMOOTH CONDUCT OF ADMISSION COUNSELING FOR VARIOUS ACADEMIC COURSE (A S MENTIONED IN ANNEXURES-1 OF THIS MOU) RUN UNDER DISTANCE EDUCATI ON MODE. ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 12 C. DISPATCH THE COURSE MATERIAL TO INFORMATION ADMI SSION COUNSELING CENTRE. IN THE EVENT OF FAILURE, IN THIS REGARD, TH E ENTIRE COST OF REPRODUCTION BY INFORMATION ADMISSION COUNSELING CE NTRE WILL BE BORNE BY THE SERVICE PROVIDER. D. ENSURE THAT THE PROSPECTUS PROVIDED BY THE UNIVE RSITY, STUDY MATERIALS AND OTHER SUCH REQUIRED MATERIALS ARE BEI NG SENT TO DIFFERENT INFORMATION ADMISSION COUNSELING CENTRE ON TIME AND ALL COST OF TRANSIT OF SUCH MATERIAL WILL BE BORNE BY THE SERVICE PROVI DER. E. CARRY OUT FUNCTION SUCH AS PROCESSING OF IACC ES TABLISHMENT APPLICATION, DISTRIBUTION OF STUDY MATERIAL ETC. F. SHALL PROVIDE AND PUT SERIOUS EFFORTS FOR THE SU ITABLE JOB PLACEMENT OF SUCCESSFUL COURSE PARTICIPANTS. 11. IT WAS SUBMITTED THAT ON PERUSAL OF THE MOU, IT SHOWS THAT PAYMENT HAS BEEN MADE ON THE BASIS OF REVENUE SHARI NG. IT WAS SUBMITTED THAT IT IS A COLLABORATION AGREEMENT, WHE REIN UNIVERSITY, SERVICE PROVIDER AND AN IACC HAVE ENTERED INTO A BU SINESS MODULE ON REVENUE SHARING BASIS FOR IMPARTING EDUCATION AND T HEREFORE, ALL CONSTITUENTS ACTED IN THEIR OWN BEHALF AND NOT ACTE D AS AGENT OF EACH OTHER. IT WAS SUBMITTED THAT THE AMOUNT PAID BY TH E ASSESSEE IS PART OF REVENUE IN RESPECT OF SERVICES PROVIDED TO THE STUD ENTS. IN SUPPORT, RELIANCE WAS PLACED ON THE COORDINATE BENCH DECISIO N IN CASE OF ITO VS. RAJASTHAN KNOWLEDGE CORPORATION LIMITED (ITA NO. 38 TO 40/JP2013 ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 13 DATED 13.02.2015). IT WAS FURTHER SUBMITTED THAT IN SPITE OF THE BONAFIDE BELIEF THAT PAYMENT WAS NOT SUBJECTED TO T DS, AFTER TDS VERIFICATION PROCEEDINGS WERE COMPLETED, THE ASSESS EE HAS NOT DISPUTED THE TAX DEMAND AND HAS PAID TDS ALONGWITH INTEREST ON 09.01.2013, THEREFORE, AT THE TIME OF ISSUANCE OF THE SHOW CAUS E NOTICE FOR PENALTY BY JCIT(TDS), THERE WAS NO FAILURE IN COMPLIANCE OF CHAPTER XVII AND EVEN ALL THE FACTS WERE DISCLOSED AND FOUND DOCUMEN TED EVEN DURING THE SURVEY. IN SUPPORT RELIANCE WAS PLACED ON THE C OORDINATE BENCH DECISION IN CASE OF M/S M.D.S. UNIVERSITY, AJMER (R AJASTHAN) VS. ACIT(TDS) ORDER DATED 23.01.2014. IT WAS FURTHER SU BMITTED THAT EXCEPT THIS TRANSACTION, OTHER TRANSACTIONS UNDERTA KEN BY THE ASSESSEE HAVE BEEN FOUND TO IN DUE COMPLIANCE WITH THE PROVI SIONS OF THE ACT, HOWEVER, BECAUSE OF BONAFIDE BELIEF THAT THE SUBJEC T TRANSACTION WAS NOT SUBJECT TO TDS, THE ASSESSEE HAS NOT DEDUCTED T DS ON THE SAID TRANSACTION. HOWEVER, THE FACT REMAINS THAT THE ASS ESSEE IS A LAW ABIDING CORPORATE CITIZEN AND THE TRANSACTION WAS N OT CONSIDERED LIABLE FOR TDS ON REASONABLE BELIEF AND NOT BECAUSE OF ANY CONTUMACIOUS CONDUCT. IN SUPPORT, RELIANCE WAS PLACED ON THE DEC ISION OF THE HONBLE SUPREME COURT IN CASE OF CIT VS. BANK OF NOVA SCOTI A (CIVIL APPEAL NO. 1704 OF 2008 ORDER DATED 07.01.2016) WHEREIN IT WAS HELD AS UNDER:- 11. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN THE INSTANCE CASE WE ARE NOT DEALING WITH COLLECTION OF TAX U/S 201(1) OR COMPENSATORY INTEREST U/S 201(1A). THE CASE OF T HE ASSESSEE IS THAT THESE AMOUNTS HAVE ALREADY BEEN PAID SO AS TO END DISPUTE WITH REVENUE. IN THE PRESENT APPEALS WE ARE CONCERNED WITH LEVY OF PENALTY U/S 271-C FOR WHICH IT IS NECE SSARY TO ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 14 ESTABLISH THAT THERE WAS CONTUMACIOUS CONDUCT ON TH E PART OF THE ASSESSEE. WE FIND THAT ON SIMILAR FACTS HONBLE DEL HI HIGH COURT HAVE DELETED LEVY OF PENALTY U/S 271-C IN THE CASE OF M/S ITOCHU CORPORATION, REPORTED IN 268 ITR 172 (DEL) AND IN T HE CASE OF CIT VS. MITSUI & COMPANY LTD. REPORTED IN 272 ITR 545. RESPECTFULLY FOLLOWING THE AFORESAID JUDGMENTS OF HONBLE DELHI HIGH COURT AND THE DECISION OF THE ITAT, DELHI IN THE CASE OF TELEVISION EIGHTEEN INDIA LTD., WE ALLOW THE ASSESSEES APPEAL AND CANCEL THE PENALTY AS LEVIED U/S 271-C. 12. FURTHER, PLACING RELYING ON THE PROVISIONS OF SECTION 273B OF THE ACT AND VARIOUS COURTS DECISION IT WAS SUBMITTED BY THE LD AR THAT THE NON DEDUCTION OF TDS WAS DUE TO BONAFIDE BELIEF AND THEREFORE, THERE WAS REASONABLE CAUSE FOR NON-DEDUCTION OF TDS AND H ENCE, PENALTY SO IMPOSED AND CONFIRMED BY THE LD. CIT(A) SHOULD BE D ELETED. 13. PER CONTRA, THE LD. DR IS HEARD WHO HAS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESS EE IS WELL ESTABLISHED IN THE FIELD OF EDUCATION AND IT CANNOT CLAIM TO BE A MAN OF AVERAGE INTELLIGENCE ACTING UNDER NORMAL CIRCUMSTANCES. IT WAS ACCORDINGLY SUBMITTED THAT THERE IS NO REASONABLE CAUSE FOR NON DEDUCTION OF TDS HENCE, THE PENALTY LEVIED BY THE ASSESSING OFFICER SHOULD BE CONFIRMED. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CASE OF THE REVENUE IS TH AT THE ASSESSEE HAS PAID COMMISSION TO M/S AD EDUCATIONAL & RESEARCH FO R SERVICES PROVIDED IN RESPECT OF PROCUREMENT OF STUDENTS AND SUCH COMMISSION IS ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 15 LIABLE FOR TDS U/S 194H AND GIVEN THE FAILURE OF TH E ASSESSEE TO DEDUCT THE TDS U/S 194H, THE ASSESSEE IS LIABLE FOR PENALT Y U/S 271C OF THE ACT. THE CASE OF THE ASSESSEE IS THAT SUCH PAYMENT IS AK IN TO SHARING OF REVENUES IN FORM OF FEES COLLECTED FROM THE STUDENT S AND THE PAYMENT TO M/S AD EDUCATIONAL & RESEARCH IS NOT IN THE NATU RE OF COMMISSION LIABLE FOR TDS U/S 194H OF THE ACT. IN ORDER TO APP RECIATE THE RIVAL CONTENTIONS, WE REFER TO THE MEMORANDUM OF UNDERSTA NDING ENTERED INTO BY THE ASSESSEE WITH M/S AD EDUCATIONAL & RESE ARCH SOCIETY (REFERRED TO AS SERVICE PROVIDER). IN THE PREAMBLE TO THE SAID MOU, IT IS PROVIDED THAT THE ASSESSEE IS DESIROUS OF TAKING TH E EXPERT SERVICES OF THE SERVICE PROVIDER TO RUN CERTAIN ACADEMIC COURSE S OF STUDY UNDER DISTANCE EDUCATION MODE. THEREAFTER, THE FINANCIAL TERMS ARE STATED IN PARA 2 OF THE SAID MOU WHICH READS AS UNDER:- 2. FINANCIAL TERMS THE JAIPUR NATIONAL UNIVERSITY, JAIPUR, RAJASTHAN, SHALL COLLECT ASSOCIATION FEE FROM THE NEWLY ESTABLISHED INFORMA TION-CUM-ADMISSION COUNSELING CELL (IACC) AND COURSE FEE FROM THE STU DENTS ENROLLED IN DIFFERENT ACADEMIC COURSES. A. THE ASSOCIATION FEE COLLECTED FROM THE NEWLY EST ABLISHED IACC SHALL BE SHARED AS UNDER: UNIVERSITY 50% SERVICE PROVIDER 50% B. THE UNIVERSITY SHALL COLLECT THE COURSE FEE (INC LUDING EXAMINATION FEE) AND MISC. FEE FROM EACH STUDENT PER YEAR: - 50% OF COURSE FEE SHALL BE PAID BY UNIVERSITY TO THE IACC FOR PROVIDING ADEQUATE AND NECESSARY INFRASTRUCTURE AND FACILITIES. ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 16 - 20% OF COURSE FEE SHALL BE PAID TO THE SERVICE PR OVIDER BY UNIVERSITY FOR RENDERING SERVICES AS MENTIONED IN T HIS MOU. - 30% OF THE COURSE FEE SHALL BE RETAINED BY THE U NIVERSITY AT ITS END. - THE SERVICE PROVIDER SHALL FURNISH A SECURITY DEP OSIT OF RS. 1.00 LAKH AND SHALL NOT CLAIM ANY INTEREST THEREON. - THE SECURITY AMOUNT SHALL BE ADJUSTED AGAINST ANY DEFAULT COMMITTED BY THE SERVICE PROVIDER UNDER THIS MOU. - THE SECURITY DEPOSITED OR THE REMAINING AMOUNT TH EREOF WILL BE REFUNDED TO THE SERVICE PROVIDER AT THE END OF THE TERM OF THE MOU PROVIDED THAT UNIVERSITY SHALL RESERVE ALL ITS RIGHTS AGAINST THE SERVICE PROVIDER NOTWITHSTANDING THE ABOVE. THEREAFTER, IN PARA 9, THE ROLE OF THE SERVICE PROV IDER HAS BEEN DESCRIBED IN DETAIL AS UNDER:- 9. ROLE OF THE SERVICE PROVIDER: THE SERVICE PROVIDER SHALL: A. SEARCH AND RECOMMEND SUITABLE INSTITUTIONS WITH REQUIRED INFRASTRUCTURE AND FACILITIES TO BE ESTABLISHED AS IACC FOR CONSIDERATION BY THE UNIVERSITY. APPLICATION FOR THE APPOINTMENT OF INFORMATION ADMISSION COUNSELING CENTRE SHALL BE FORWARDED BY T HE SERVICE PROVIDER ALONG WITH A DEMAND DRAFT OF ASSOCIATION FEE PAYABL E TO DIRECTORATE OF DISTANCE EDUCATION, JAIPUR NATIONAL UNIVERSITY, JAI PUR, RAJASTHAN, PAYABLE AT JAIPUR. B. PROVIDE BOTH EXPERT AND MARKETING SERVICES TO UN IVERSITY IN OPENING INFORMATION ADMISSION COUNSELING CENTRE AND SMOOTH CONDUCT OF ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 17 ADMISSION COUNSELING FOR VARIOUS ACADEMIC COURSES ( AS MENTIONED IN ANNEXURE-1 OF THIS MOU) RUN UNDER DISTANCE EDUCATIO N MODE. C. CONDUCT NO ACTIVITY WHICH SHALL BE COMPETITIVE OR DETRIMENTAL TO THE INTEREST OF THE UNIVERSITY. D. DISPATCH THE COURSE MATERIAL TO INFORMATION ADMI SSION COUNSELING CENTRE. IN THE EVENT OF FAILURE IN THIS REGARD THE ENTIRE COST OF REPRODUCTION BY INFORMATION ADMISSION COUNSELING CE NTRE WILL BE BORNE BY THE SERVICE PROVIDER. E. ENSURE THAT THE PROSPECTUS PROVIDED BY THE UNIVE RSITY, STUDY MATERIALS AND OTHER SUCH REQUIRED MATERIALS ARE BEI NG SENT TO DIFFERENT INFORMATION ADMISSION COUNSELING CENTRE ON TIME AND ALL COST OF TRANSIT OF SUCH MATERIAL WILL BE BORNE BY THE SERVICE PROVI DER. F. SEEK PRIOR APPROVAL OF UNIVERSITY OF ALL THE PRO MOTIONAL MATERIAL INCLUDING DESIGN OF ART WORK TO BE PUBLISHED THROUG H PRINT MEDIA, MAINTAIN COMPLETE RECORDS OF ALL PROSPECTUSES SOLD AND THE STUDENTS ENROLLED BOTH IN SOFT COPY AND HEARD COPY. G. PROMOTE WITH PRIOR APPROVAL OF THE UNIVERSITY, A CADEMIC COURSES THROUGH PUBLISHING ADMISSION NOTICE, ARTICLES AND O THER NEWS ITEMS IN IMPORTANT NEWSPAPERS OF THE COUNTRY. H. NOT TO MAKE ANY FINANCIAL COMMITMENT ON BEHALF O F OR IN THE NAME OF THE UNIVERSITY NOR WILL TAKE LOANS OR CREATE ANY OT HER FINANCIAL LIABILITY BINDING ON THE UNIVERSITY THIS MOU. I. HELP MONITOR THE FUNCTIONING OF IACC. J. CARRY OUT FUNCTIONS SUCH AS, PROCESSING OF IACC ESTABLISHMENT APPLICATIONS, DISTRIBUTION OF STUDY MATERIAL ETC. ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 18 K. UNDERTAKE TO MAINTAIN THE SECRECY AND CONFIDENTI ALITY OF THE PROGRAMMES OFFERED BY THE UNIVERSITY, MODE OF INSTR UCTIONS AND ITS METHODS, SYLLABI AND PROGRAMME CURRICULA ETC. L. SHALL PROVIDE AND PUT SERIOUS EFFORTS FOR THE SU ITABLE JOB PLACEMENT OF SUCCESSFUL COURSE PARTICIPANTS. 15. WE THEREFORE FIND THAT SERVICES SO SPECIFIED IN THE MOU RANGES FROM SELECTION OF IAAC CENTRES, PROMOTION OF ACADEM IC COURSES, CO- ORDINATION IN SUPPLY AND DISPATCH OF COURSE MATERIA L, OTHER STUDY MATERIAL, MAINTENANCE OF RECORDS OF STUDENTS WHICH HAVE BOUGHT THE PROSPECTUS AND SUBSEQUENTLY ENROLLED FOR THE VARIOU S COURSES. FOR SUCH SERVICES, THE SERVICE PROVIDER IS ENTITLED TO SHARE OF ASSOCIATION FEES TO THE EXTENT OF 50% AND 20% OF COURSE FEES. THEREFORE , IT CANNOT BE DISPUTED THAT THERE IS SHARING OF REVENUES BY THE A SSESSEE WITH THE SERVICE PROVIDER TO THE EXTENT OF 50% OF ASSOCIATIO N FEES AND 20% OF COURSE FEES. IN THE MOU, THERE IS REFERENCE TO SC OPE OF SERVICES TO BE RENDERED BY THE SERVICE PROVIDER AND PRIMA FACIE, I T GIVES AN IMPRESSION OF RENDERING OF SERVICES. HOWEVER, AT THE SAME TIM E, WE FIND THAT THROUGH THE MOU, THERE IS POOLING OF ACADEMIC RESOU RCES OF THE UNIVERSITY WITH THE MARKETING RESOURCES OF THE SERV ICE PROVIDER WHEREBY THE VIRTUAL FOOTPRINT OF THE UNIVERSITY HAS BEEN EN VISAGED TO BE EXPANDED THROUGH DISTANCE EDUCATION PROGRAMMES AND SETTING UP OF IAACS IN CLOSE ASSOCIATION WITH THE SERVICE PROVIDE R. TO OUR MIND, LOOKING AT THE TERMS OF THE MOU WHEREBY THE ASSESSE E HAS AGREED TO SHARE FEES AS HIGH AS 50% OF ASSOCIATION FEES AND 2 0% OF COURSE FEES WITH THE SERVICE PROVIDER, THE SAID PAYMENT SEEMS T O BE MORE IN THE NATURE OF REVENUE SHARING RATHER THAN PAYMENT OF CO MMISSION FOR SERVICES RENDERED BY THE SERVICE PROVIDER. THEREFOR E, IT CANNOT BE HELD ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 19 CONCLUSIVELY THAT SUCH PAYMENTS WOULD SURELY FALL I N THE DEFINITION OF COMMISSION SO DEFINED IN SECTION 194H OF THE ACT. TO OUR MIND, IT IS CLEARLY A DEBATABLE ISSUE AND ON SUCH ISSUE, LEVY O F PENALTY FOR NON- DEDUCTION OF TDS CANNOT BE JUSTIFIED. THEREFORE, T HE EXPLANATION OF THE ASSESSEE THAT IT WAS UNDER A BONAFIDE BELIEF THAT S UCH PAYMENTS DOESNT CALL FOR TDS THUS CANNOT BE DISPUTED. IT IS ALSO NO TED THAT SUBSEQUENT TO TDS VERIFICATION BY THE DEPARTMENT WHEN SUCH MATTER WAS POINTED OUT TO THE ASSESSEE, THE LATTER HAS COMPLIED WITH THE S AME BY DEPOSITING APPROPRIATE TDS ALONG WITH INTEREST. AS HELD BY THE HONBLE SUPREME COURT IN CASE OF NOVA SCOTIA (SUPRA), FOR LEVY OF P ENALTY U/S 271-C WHAT IS NECESSARY IS TO ESTABLISH THAT THERE WAS CONTUMA CIOUS CONDUCT ON THE PART OF THE ASSESSEE WHICH, WE FIND, IS NOT PRESENT IN THE CASE OF THE ASSESSEE. IN LIGHT OF ABOVE DISCUSSIONS AND KEEPING IN VIEW THE PROVISIONS OF SECTION 273B OF THE ACT, THE PENALTY SO LEVIED U/S 271C IS HEREBY DIRECTED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/02/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 06/02/2019. * SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- JAIPUR NATIONAL UNIVERSITY, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- JCIT, TDS, JAIPUR. ITA NO. 870/JP/2018 JAIPUR NATIONAL UNIVERSITY VS. JCIT, TDS 20 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. XKMZ QKBZY@ GUARD FILE { ITA NO. 870/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR