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2014 (12) TMI 20 - HC - Income TaxPenalty u/s 271C - Whether the Tribunal has substantially erred in upholding the order of the CIT(A) to delete the penalty u/s 271C – Held that:- TDS not deducted on reimbursement of food expenses paid to its employees u/s 192 – Held that:- CIT(A) and Tribunal was rightly of the view that there was bona fide mistake on the part of the assessee in not deducting the tax at source and that there was no deliberate intention or negligence on the part of the assessee in not deducting the tax at source - the assessee had made out a reasonable cause for failure in deducting tax at source – relying upon Commissioner of Income-tax, New Delhi Versus Eli Lilly & Company (India) Pvt. Ltd. [2009 (3) TMI 33 - SUPREME COURT] – it cannot be held that the provision to be mandatory or compensatory or automatic because u/s 273B Parliament has enacted that penalty shall not be imposed in cases falling - section 271C falls in the category of such cases - the liability to levy of penalty can be fastened only on persons who do not have good and sufficient reason for not deducting tax at source - the assessee has proved that there was reasonable cause for failure to deduct tax at source – thus, the order of the Tribunal in upholding the deletion of penalty u/s 271C is upheld – Decided against revenue.
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