Payments on 'Transactional Charges' not covered u/s 194J(1)(ba) of Income Tax Act: ITAT deletes Penalty

The New Delhi bench of the Income Tax Appellate Tribunal (ITAT) annulled the penalty order under section 271C of the Income Tax Act, 1961, noting that payments for 'transactional charges' weren't covered by section 194J(1)(ba) of the act. During survey operations at Ambience Private Limited, payments made to directors as sitting fees without TDS deduction were found. A

dditionally, transaction charges were paid without TDS deduction, leading to a penalty notice. The ITAT observed the absence of a specific provision for transaction charges under section 194J(1)(ba), indicating the assessee's genuine belief. 

The two-member Bench, Anubhav Sharma and Dr. B.R.R. Kumar, highlighted the CIT(A)'s acceptance of sitting fee payments, illustrating the justification for non-deduction of TDS.