Tribunal held that the assessee was under bona fide belief that its employees were to be regarded as employees of State Government and were entitled to exemption of entire sum of unutilised leave encashment under S. 10(10AA)(ii) of the Act. Failure to deduct tax at source was under bonfide belief hence, proceedings under S. 201(1) and 201(1A) of the Act was quashed. (ITNO .2379 of 2017 dt .8-2-2019)& 2223 /2017dt 2-05 -2018 (AY. 2013-14, 2015-16)
Karnataka Power Transmission Corporation Ltd. v. ITO(TDS) (2019) 70 ITR 352 / 175 ITD 504/ 198 TTJ 470/ 175 DTR 313/199 TTJ 377/ 177 DTR 256(Bang.)(Trib.)
S. 201 : Deduction at source-Failure to deduct or pay–Bonafide belief that as employees of State Government and were entitled to exemption of entire sum of unutilised leave encashment–Failure to deduct tax at source–Cannot be treated as assessee in default .[S.10(10AA(ii), 192, 201(1), 201(IA)]