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2010 (5) TMI 653 - AT - Income TaxTDS - penalty under section 271(1)(c) on the disallowance - assessee had made payment of royalty, advertisement and publicity, audit fee and recruitment expenses on which tax at source has not been deducted - auditors of the assessee had itself quantified these payments as inadmissible under section 40(a)(ia) of the Income-tax Act - books of account were finalised on October 29, 2005 and these liabilities were provided for, tax has been deducted in October, 2005 and paid in November, 2005. These should have been added to this year's taxable income and allowed in the next year's taxable income - Assessing Officer disallowed the payment for the current year and remarked that the amount will be allowed in the next assessment year – Held that:- if the contention of the Revenue is accepted then in case of every return where the claim is not accepted by the Assessing Officer for any reason, the assessee, will invite the penalty under section 271(1)(c). This is clearly not the intendment of the Legislature, orders set aside and delete the levy of penalty, appeal filed by the assessee is allowed.
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