COMMISSIONER OF INCOME TAX Vs. HITACHI LTD.

JUDGEMENT

(1.) CM No. 6023 of 2005 Allowed, subject to all just exceptions.

(2.) EXEMPTION prayed for is granted.

(3.) ACCORDINGLY , the application stands disposed of. IT Appeal No. 284 of 2005 incorporated and the liaisoning office was wound up. During the course of verification of Form 24 regarding deduction of tax from salaries, it was noticed that during the financial years 1989 -90 to 1996 -97, the assessee had expatriate employees working with the company. The employees were on deputation from Hitachi Japan and being paid salaries from Japan for the service rendered to the Indian company. The assessee -company was not taking into account the salary income they paid in Japan, for the purposes of deduction of tax from salary under s. 192 of the IT Act (for short 'the Act'). After persistent queries and demands, taxes were paid on additional salary income received in Japan from expatriate employees which were rendering services in India initially to the liaisoning office of Hitachi Ltd., Japan and penalty under s. 271C could not be enforced against assessee. It was specifically pleaded that there was no failure, as required under s. 271C because no order under s. 201(1) or under s. 201(1A) was passed. The assessee specifically took the plea that they were not the assessee -in -default, as neither a demand was created nor raised against them under s. 156 of the Act. The contentions raised by the assessee were not accepted and the Jt. CIT vide order dt. 21st equivalent to the amount of short deduction of tax. Against this order, appeal was filed by the assessee before the CIT leviable in terms of the said provisions and consequently, dismissed the appeal of the assessee.