Sudoku Ltd., an Indian company, is engaged in the business of manufacture and sale of lamp shades. To expand its international sales, it hired the services of a New York based company, Moon Inc., for online advertisement
CS Professional · Advanced Tax Laws · PYQS · June 2024
Sudoku Ltd., an Indian company, is engaged in the business of manufacture and sale of lamp shades. To expand its international sales, it hired the services of a New York based company, Moon Inc., for online advertisements. Moom Inc. has no permanent establishment in India. During the previous year 2023-24, Sudoku Ltd. paid ₹ 6 lakhs to Moon Inc. for such services and deducted the equilization levy on 15.03.2024 and credited it to the account of Central Government on 16.04.2024. You are required to: (ii) What are the circumstances under which penalty cannot be imposed ?
Answer & Explanation:
No penalty for failure to deduct or pay equalisation levy shall be imposable, if Sudoku Ltd. proves to the satisfaction of the Assessing Officer that there was reasonable cause for the said failure. Further, no order imposing a penalty shall be made unless Sudoku Ltd. has been given a reasonable opportunity of being heard.
Topics: Equalization Levy
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