Pr.commissioner Of Income Tax Appellantthrough: Mr. N.p. Sahni, Senior Standing Counselwith Mr. Nitin Gulati, Advocate v. Coronation Infrastructure Ltd

IN THE HIGH COURT OF DELHI AT NEW DELHI *2.+ITA 505/2015 PR.COMMISSIONER OF INCOME TAX AppellantThrough: Mr. N.P. Sahni, Senior Standing counselwith Mr. Nitin Gulati, Advocate.versusCORONATION INFRASTRUCTURE LTD. Respondent WITH 3. +ITA 506/2015 PR.COMMISSIONER OF INCOME TAX AppellantThrough: Mr. N.P. Sahni, Senior Standing counselwith Mr. Nitin Gulati, Advocate. versus CORONATION INFRASTRUCTURE LTD. Respondent WITH + ITA 507/2015 PR.COMMISSIONER OF INCOME TAX AppellantThrough: Mr. N.P. Sahni, Senior Standing counselwith Mr. Nitin Gulati, Advocate. versus CORONATION INFRASTRUCTURE LTD. Respondent ITA Nos. 505, 506, 507 & 514 of 2015 Signature Not Verified Page 1 of4 AND 6. +ITA 514/2015 PR.COMMISSIONER OF INCOME TAX AppellantThrough: Mr. N.P. Sahni, Senior Standing counselwith Mr. Nitin Gulati, Advocate. versus CORONATION INFRASTRUCTURE LTD Respondent CORAM:HON'BLE DR. JUSTICE S. MURALIDHARHON'BLE MR. JUSTICE VIBHU BAKHRU ORDER%31.07.2015 CM Nos. 13222/2015.13223/2015 & 13243/2015 (for exemption^ 1. Exemptions allowed subject to all just exceptions. 2. The applications are disposed of. ITA Nos. 505/2015. 506/2015. 507/2015 & 514/2015 3. These are appeals by the Revenue under Section 260A (1) against ordersof the Income Tax Appellate Tribunal (TTAT') for various AssessmentYears ('AYs') on issue of penalty under Section 271C of the Income TaxAct, 1961 ('Act'). ITA Nos. 505, 506, 507 & 514 of 2015 4. A survey operation undertaken on 12'^ November 2008 under Section133 A of the Act revealed that the Respondent Assessee made payments ofinterest on loans borrowed from four Non-Banking Financial Companies('NBFCs') without deducting tax at source. It was also found that theRespondent had not collected tax collected at source under Section 206C ofthe Act on the sale of scrap. In that context that the penalty was levied underSection 271-C of the Act. 5. The Assessee succeeded both before the Commissioner of Income Tax(Appeals) [CIT(A)] as well as the ITAT who concurrently held that the non-deduction of TDS was for bonafide reasons. Among the factors that ^weighedwith both the CIT (A) and the ITAT were that the NBFCs in question had intheir returns accounted for the interest amount earned and had paid the taxesthereon. Further, the repayment schedule was fixed and post-dated chequeswere collected upfront which included the principal amount together withthe interest. 6. It was urged by Mr. Sahni, learned Senior Standing counsel for theRevenue that it was only on account of the survey operation undertaken thatthe above lapse was detected and it is only thereafter that the Assessee made ITA Nos. 505, 506, 507 & 514 of 2015 good the lapse. 7. The Court is of the view that where two authorities have, in the context ofpenalty proceedings under Section 271 C of the Act, been convinced withthe reasons offered by the Assessee and have concluded that the failure todeduct TDS was for bonqfide reasons, no substantial question of law arisesfor determination by the Court. 8. The appeals are dismissed. S. MURALIDHAR, J JULY 31,2015/dn VIBHU BAKHRU, J