COMMISSIONER OF INCOME TAX Vs. ALCATEL INDIA LTD

JUDGEMENT

(1.) THE Revenue is aggrieved by an order dt. 30th June, 2005 passed by the Tribunal Bench T in ITA Nos. 2845 to 2849/Del/2001 relevant for the financial years 1993 -94 to 1997 -98. By the impugned order, the Tribunal has deleted the penalty imposed upon the assessed under Section 271C of the IT Act, 1961.

(2.) THE assessed is a company incorporated in India and it employed expatriate employees who have been seconded to the assessed by its parent company i.e. CIT Alcatel, a company incorporated in France, to work in India. The employees were receiving salary from the parent company in France and were also receiving salary from the Indian company in India.

(3.) THE AO did not accept the contention of the assessed, while the CIT(A) was of the view that the assessed had been able to explain its failure to deduct tax at source in respect of hardship allowance and education allowance. In respect of ex gratia payment the CIT(A) was of the view that the assessed had not been able to show any reasonable cause for not deducting tax thereon at source.