Commissioner of Income Tax vs Riso Kagaku Corpn.

This appeal is directed against the order passed by the Income Tax Appellate Tribunal on 06.01.2005 in ITA No. 178/Del/2002 pertaining to the financial year 1997-98. The assessee was in appeal before the Tribunal against the order dated 19.10.2001 passed by the Commissioner of income tax (Appeals), New Delhi who had confirmed the penalty of Rs. 5,57,827/- u/s 271-C of the Income Tax Act, 1961, levied by the Assessing Officer. The Assessing Officer found that the assessee had not deducted the tax at source in respect of the payment of salary to one Mr. Tadashi Sasaki who was receiving the salary both in India, as well as, in Japan from the employer. The Assessing Officer found the assessee to be in default in terms of Section 201(1) of the said Act. Consequently, he levied a penalty u/s 271-C of the said Act.

The Tribunal upon a consideration of the factual position has deleted the penalty on the ground that the assessee had not deducted the tax at source in respect of the salary paid to Mr. Tadashi Sasaki under bona fide belief that Mr. Tadashi Sasaki was not liable to tax in India during the Finance Year 1997-98. This is a finding of fact. No substantial question of law arises for our consideration. The appeal is dismissed.