Facts:
a)
Assessee (Aishwarya Rai Bachchan) made payment of US $ 77,500 to a non-resident
for development of website without deducting TDS under Section 195.
b)
The Assessing Officer (AO) observed that payment made for development of
website would fall within the meaning of 'fees for technical services' as per
Explanation 2 to Section 9(1)(vii). Therefore, payment so made was taxable in
India in hands of non-resident and, hence, assessee had made default for not
deducting TDS while making such payment. Consequently, the AO imposed penalty
under section 271C for not deducting the TDS.
c)
Assessee submitted that she had not deducted TDS by relying upon advice of her
CA. Therefore, penalty shouldn’t be imposed as there was no mala fide intension
on her part.
d)
CIT(A) confirmed the order of AO. Aggrieved by the order of CIT(A), assessee
filed the instant appeal before the tribunal.
The tribunal held in favour of assessee as
under-
2)
It is a well-accepted fact that every citizen of the country is neither fully
aware of nor is expected to know the technicalities of the Income Tax Act.
Therefore, for discharging their statutory duties and obligations, they take
assistance and advice of professionals who are well acquainted with the
statutory provisions.
3)
In the instant case, assessee's CA had issued a certificate opining that tax
was not required to be deducted at source on said remittance. Therefore,
assessee under a bonafide belief didn’t deduct TDS while making such
remittance.
4)
Therefore, failure on the part of the assessee to deduct tax at source was due
to a reasonable cause. Hence, no penalty under Section 271C should be imposed-
[2016] 68 taxmann.com 324 (Mumbai - Trib.)
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