Liaility of TDS not advised by CA_Penalty cancelled

Last updated: 19 August 2008

Court :
Delhi High Court

Brief :
the assessee had made certain payments for fabrication charges, but had not deducted tax at source. The Assessing Officer held that the assessee has failed to deduct tax at source u/s.194C. The contention of the assessee was that it was not advised by its Chartered Accountant that it was liable to deduct tax at source u/s.194C of the Act and therefore the failure to deduct tax at source was bona fide.

Citation :

held that the assessee has not been correctly advised by its Chartered Accountant in regard to its liability.The Tribunal found the explanation to be bona fide. The assessee would not be liable to penalty if he is able to prove that there was a reasonable cause for failing to deduct the tax. No penalty proceedings.Delhi High Court upheld the decision of the Tribunal