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2012 (9) TMI 218 - AT - Income TaxLevying penalty u/s. 271C - Non deduction of TDS - an order u/s. 201 (1A) by AO raising a demand - TDS u/s. 194J as against sec. 194C - Held that:- Considering submission of assessee that he was under bonafide impression that he was not required to deduct tax at source since the recipient company is filing its returns regularly and paying legitimate tax dues by way of advance tax and self assessment tax - When there is no loss of revenue to the department on account of failure on the part of the assessee to deduct tax at source, penalty should not have been imposed u/s 271C Levy of interest u/s 201(1A) is automatic, however it is not so in case of imposition of penalty u/s 271C. Section 273B provides a discretion to the AO towards imposition of penalty u/s 271C considering the reasonableness of the cause shown by the assessee for failure on its part to deduct tax at source. It is seen from the penalty order u/s 271C that the AO has accepted the fact that the recipient of the printing and processing charges i.e., M/s. Prasad Productions Pvt. Ltd., has declared income received in its return of income filed and has paid taxes. Therefore, no order u/s 201 was passed against the assessee treating it as an assessee in default - in favour of assessee.
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