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2018 (6) TMI 1797 - ITAT MUMBAIPenalty u/s 271(1)(c) - addition u/s 40(a)(ia) - HELD THAT:- Deduction of TDS is a debatable and technical issue; therefore, at least penalty cannot be imposed. Admittedly, the provision of section 40(a)(ia) is a deeming section which creates legal fiction, therefore, the disallowance made simply invoking the provision will not attract penalty for concealment or furnishing of inaccurate particulars of income. Hon'ble Apex Court in Hindustan Steel Ltd. vs State of Orissa [1969 (8) TMI 31 - SUPREME COURT] supports our view, wherein, it was held that ‘the authority competent to impose the penalty will be justify in refusing the penalty where there is a technical or venial breach of provision or where the breach flows from a bon-fide belief that offender is not liable to act in a manner prescribed by a statute’. The case of the assessee further find support from the decision in the case of CIT vs AT & T Communications Services Pvt. Ltd. [2012 (2) TMI 8 - DELHI HIGH COURT] wherein it was held that invoking the provisions of section 40(a)(ia) for making the disallowance should not be a ground for levy of penalty. Identical ratio was laid down in New Horizon India Pvt. Ltd. vs DCIT [2010 (5) TMI 653 - ITAT DELHI] and in Ram Krishna S. Shetty [2014 (1) TMI 1072 - ITAT MUMBAI] and the decision from Hon'ble Apex Court in the case of Reliance Petro Products [2010 (3) TMI 80 - SUPREME COURT]. - Decided against revenue.
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