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-
