The Assessee is a university engaged in the field of education and runs various educational and professional courses. Assessee entered in to an MOU with M/s AD education & research. During the year assessee paid certain amounts to M/s AD education & research for the services provided for the procurement of students. Ld. AO treated such payment as commission on which TDS was liable to be deducted u/s 194H of the Act. He noted that there was failure on the part of assessee for non-deducting TDS on commission paid. Ld. AO further levied penalty u/s. 271C. CIT (A) sustained the penalty. Aggrieved by the same, assessee filed an appeal before ITAT challenging the levy of penalty u/s. 271C. The Tribunal observed that assessee had agreed to share fees as high as 50% of association fees and 20% of course fees with the service provider, and held that the said payment seems to be more in the nature of revenue sharing rather than payment of commission for services rendered by the service provider. Therefore, it cannot be held conclusively that such payments would surely fall in the definition of commission so defined in section 194H of the Act. Further it was a debatable issue and thus levy of penalty for non-deduction of TDS cannot be justified. The explanation of the assessee that it was under a bonafide belief that such payments doesn’t call for TDS cannot be disputed. The Tribunal further noted that subsequent to TDS verification by the Department when such matter was pointed out to the assessee, the latter has complied with the same by depositing appropriate TDS along with interest. The Tribunal held that for levy of penalty u/s 271-C what is necessary is to establish that there was contumacious conduct on the part of the assessee which 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 was deleted. (ITA no. 870/JP/2018 dt. 06.02.2019 (AY. 2012-13)