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2014 (1) TMI 1326 - AT - Income TaxLevy of penalty u/s 271C of the Act Non-deduction of TDS on rent payment u/s 194I of the Act Held that:- The premises for which the rent payment was made by the assessee, was co-owned by five persons, thus, if the total amount of the rent payment is divided among these five co-owners, the amount of rent paid to each person is much below the threshold limit available to per person, and hence, it has to be accepted that there may be bona fide belief of the assessee that no TDS is deductible u/s.194I thus, the provision under section 271C is not applicable for this default u/s194I of the act and the penalty is not justified for the default Decided in favour of Assessee. Levy of penalty for default u/s 194A of the Act Held that:- The default is in respect of about 35 persons, and the total default is of Rs.4,91,710/- being the amount of TDS which was required to be deducted by the assessee under section 194A, but it was not deducted - number of persons from whom TDS was not deducted is about 3.5% of total persons from whom TDS was to be deducted under section 194A thus, penalty under these facts, is not justified because there was substantial compliance of TDS provisions u/s.194A of the Act Decided in favour of Assessee.
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