Assessee was engaged in business of providing consultancy services and supply of manpower services to power and infrastructure sector in India and abroad . Assessee created provisions for certain expenses and claimed that tax was deducted when liability to pay such expenses was crystallized on receipt of invoices . Assessing Officer denied said claim on ground that under mercantile system of accounting, accrual of liability for any expenditure was not dependent on receipt of invoices . He\u00a0 held that assessee-company failed to deduct TDS and levied penalty under section 271C\u00a0 of the Act .\u00a0 CIT(A)\u00a0\u00a0\u00a0 deleted penalty on ground that taxes were duly deducted and deposited against impugned expenses when liability to pay such expenses was crystallized . Dismissing the appeal of the Revenue the Tribunal held that\u00a0 the assessee has made only provision and there was no crystallisation of income in the hands of the recipient at the end of the financial year . Referred ITO v. DLF Southern Homes (P) Ltd\u00a0 2017 SCC Online ITAT 148 \/ DCIT v. Telco Construction Equipment Co Ltd ( ITA. 478 \/Bang \/2012 \u00a0dt.7-3 -2014 . \u00a0(AY. 2013 -14 ) \u00a0\u00a0<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 271C : Penalty – Failure to deduct at source \u2013Mercantile system of accounting – Provision made on estimate basis \u2013 Tax was deducted and deposited TDS upon crystallization of liability to pay expenses on receipt of invoices- Penalty is not leviable .[ S. 40(a)(ia), 145 ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-29878","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-7LU","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/29878","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=29878"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/29878\/revisions"}],"predecessor-version":[{"id":29879,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/29878\/revisions\/29879"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=29878"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=29878"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=29878"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}