Cognizant Technology Solutions India Pvt. Ltd. v. Assistant Commissioner of Income Tax (TDS) & Anr. The matter came up for hearing before the Hon Justice Mr Senthil Ramamurthy , Hon’ble Madras High Court in a batch of writ petitions challenging the penalty proceedings initiated under Section 271C of the Income-tax Act, 1961, involving an aggregate penalty demand of
Cognizant Technology Solutions India Pvt. Ltd. v. Assistant Commissioner of Income Tax (TDS) & Anr.
The matter came up for hearing before the Hon Justice Mr Senthil Ramamurthy , Hon’ble Madras High Court in a batch of writ petitions challenging the penalty proceedings initiated under Section 271C of the
Income-tax Act, 1961, involving an aggregate penalty demand of approximately ₹101.14 crores arising out of the alleged delayed deduction and remittance of Tax Deducted at Source (TDS). Learned Senior Counsel appearing for the petitioner contended that Section 271C was inapplicable in cases of delayed deduction and remittance of TDS and, therefore, the impugned penalty orders deserved to be set aside. Opposing the writ petitions, Dr. B. Ramaswamy, learned Senior Standing Counsel for the Income Tax Department, strongly defended the penalty proceedings and submitted that the petitioner’s failure to deduct TDS within the prescribed time attracted penal consequences under Section 271C. He elaborately explained the statutory scheme governing TDS compliance and emphasized that the delay in deducting TDS adversely affected the Revenue’s interests. During the course of hearing, the Hon’ble Court appreciated the submissions advanced on behalf of the Revenue and, while safeguarding the interests of the Revenue Department, declined to interfere with the pending appellate proceedings. The Hon’ble Court directed the petitioner to pursue its statutory remedy before the Commissioner of Income Tax (Appeals) and, subject to the deposit of ₹4 crores, granted interim protection from recovery of the remaining penalty amount until disposal of the appeals, directing the appellate authority to expeditiously decide the same.
