JUDGMENT

S. Ravindra Bhat,J: (Open Court)

The revenue claims to be aggrieved by the order dated 25.2.2011 of the Tribunal. The substantial question of law urged by it is that the Tribunal fell into error in holding that TDS was not recoverable from the assessee in terms of the Section 194-I, at 22%.

2. The brief facts are that the assessee is a well known manufacture of consumer goods such as detergent, soaps etc. It hires godowns on rent and also engages c & f agents to manage them for various purposes. The assessing officer, for the financial year 2000-01 was of the view, after examination of form No.26G and 26J, that the assessee wrongly deducted tax at 2.2% under Section 194C from the amounts paid to the c & f agents. The assessing officer was of the opinion that the assessee ought to have deducted tax at the rate of 22% under Section 194-I because they contain warehousing charges. Therefore, he treated the assessee in default of Rs.78,43,252/- and charged interest of Rs.25,29,448/- under Section 201(1A) and made consequential demands. Later he also initiated penalty proceedings under Section 271C. The assessee carried the matter in appeal; the CIT(Appeals) partly allowed the