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2015 (11) TMI 630 - AT - Income TaxPenalty levied under section 271C - assessee had not deducted tax at source under section 194A on interest payment - Held that:- As per the provisions of section 194A(3)(iii)(f) no tax is to be deducted at source on income by way of interest which are credited or paid to such other institutions, association or body which the Central Government may notify in this behalf in the special gazette. For the purpose of section 194A(3)(iii)(f) Notification No. S. O. 3489 dated October 22, 1970, lists a number of undertakings which includes any undertaking or body including a society registered under the Societies Registration Act 1860, financed wholly by the Government PEC University is claiming exemption under section 10(23C)(iiiab) of the Act. Section 10(23C)(iiiab), grants exemption from tax to incomes of educational institutions which are wholly or substantially financed by the Government. Undisputedly therefore PEC University is wholly or substantially financed by the Government. Therefore even as per the provisions of section 194A(3)(iii)(f) no tax was required to be deducted at source on the interest paid to it by the assessee. Since both as per the provisions of section 197A and section 194A(3)(iii)(f) the impugned payment was not to be subjected to tax deduction at source. No penalty under section 271C was therefore leviable. - Decided against revenue.
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