TMI Blog2014 (1) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... ault – 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. - ITA No.1634/Ahd/2010 - - - Dated:- 2-8-2013 - G C Gupta And A K Garodia, JJ. ORDER:- PER : A K Garodia This is assessee s appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be levied for not deducting taxes. The AO had noted in the penalty order that the assessee has not submitted their reply till 23rd March, 2009 i.e. date of passing of the penalty order by the AO. It is also noted by the AO in the penalty order that survey was conducted on 17.3.2005 at the fag end of the year, and it is observed that the assessee has not deducted TDS throughout the year. He also noted that the TDS was deducted and paid to the government account only because of survey. The AO imposed penalty of Rs.4,91,710/- for default under section 194A and Rs.54,800/- for default under section 194I, and in this manner, he imposed a total penalty of Rs.5,46,510/- under section 271C of the I.T.Act. Being aggrieved the assessee carried th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the authorities below. First, we decide the issue regarding the levy of penalty for default of the assessee for non-deduction of TDS in respect of rent payment under section 194I of the I.T.Act. In this regard, it was submitted by the assessee that the premises in question, for which the rent payment was made by the assessee, was co-owned by five persons, and hence, if the total amount of the rent payment of Rs.2,62,800/- is divided among these five co-owners, the amount of rent paid to each person is much below the threshold limit of Rs.1.20 lakhs 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, and hence, in our considered opinion, the provision under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liance was placed on by the learned AR of the assessee on the decision of the Tribunal rendered in the case of ITO Vs. Smt. Beenaben P. Shah, ITA No.128/Ahd/2013 dated 26.7.2013. We find that this Tribunal decision is in respect of non-deduction of TDS under section 194I, and we have already deleted the penalty imposed by the AO in respect of default under section 194I, and hence, this Tribunal decision is not relevant in respect of default of the assessee for non-deduction of TDS under section 194A. 9. Reliance was placed on this decision of the Tribunal in support of this contention of the learned AR of the assessee also that penalty order passed by the AO is barred by limitation. In this regard, we find that as per this Tribunal order, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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