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2005 (10) TMI 224 - AT - Income TaxPenalty levied u/s 271C - non-compliance of the provisions of the TDS - HELD THAT:- Considering the facts of this case and the explanation given by the assessee, in our opinion, it cannot be said that the omission on the part of the assessee was deliberate in defiance of law. The assessee cannot be held to be guilty of conduct contumacious or dishonest, nor the assessee can be said to have acted in conscious disregard of its obligation. In this case, the Revenue has already recovered interest u/s 201(1A). Moreover, as per the facts available on record, in most of the cases refund was due and taxable income was also nil Another aspect to be considered here is that there are voluminous transactions involved in the business of the assessee and the assessee and the payees are having interlinking relationship as sister concerns. After examining the facts of the case in the backdrop of the legal principles laid down in the precedents relied on by the assessee, in our considered opinion, assessee's explanation cannot be brushed aside as not a reasonable cause. In our considered opinion, the CIT(A) has rightly held that there existed reasonable cause for the assessee for the non-compliance of the provisions of the TDS. Hence, the CIT(A) has rightly deleted the penalty levied by the Assessing Officer on the assessee u/s 271C. Thus, we find no infirmity in the order of the CIT (Appeals) and we confirm his order. The Revenue's appeal stand dismissed. Order accordingly.
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