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2015 (2) TMI 1296 - AT - Income TaxPenalty u/s 271C - non deduction of tds u/s 194J by assessee bank on payments made to State Bank of India, Surat in connection with clearance of MICR cheques - "reasonable cause" - penalty levied on the successors for an alleged infringement by the predecessor bank - bonafide belief that there was no tax deductible on such charges - Held that:- The expression "reasonable" gives an impression that prima facie, if a person of average intelligence has acted and under those circumstances the said action was at that point of time not infringed the settled law then it can be reasonably held that assessee was prevented by a "reasonable cause" under those circumstances not to act as prescribed or determined by a case law. We are aware that ignorance of law is not an excuse but at the same time, it is not practical that every tax payer should be aware about the latest development of tax law; which are otherwise fast changing. We find that issue at hand was debatable at relevant point of time and assessee was prevented by a reasonable cause not to deduct TDS under the relevant provisions of Income Tax Act. In view of this, assessee is entitled for relief from penalty levied under the provision of 271C - Decided in favour of assessee
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