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2016 (12) TMI 1811 - AT - Income TaxPenalty levied u/s 271CA - default in collection of tax at source - ITAT concurred with the findings of the CIT(A) and held that the belief of the assessee that the goods sold by it were not covered in the definition of scrap though not accepted by the CIT(Appeals) on merit, constituted reasonable cause for failure to comply with the provisions of law - HELD THAT:- Where as a matter of fact it has not been categorically established that the goods were scrap and waste as such which could not be used further, the facts narrated by the assessee, which we find had not been controverted by the revenue, reveal that the assessee harboured an honest belief based on reasonable grounds that the goods sold were not scrap. The same constituted reasonable cause for not collecting tax at source even though the Ld. CIT(appeal) did not accept this content ion of the assessee on merit. We agree with the Ld. CIT(A) that the assessee had reasonable cause for not collecting tax at source, the absence of which is essential for levying penalty as held in the case of Wood ward governor [2001 (4) TMI 34 - DELHI HIGH COURT] . We therefore uphold the order of the CIT(Appeals) deleting the levy of penalty under section 271CA of the Act. The appeal of the revenue is accordingly dismissed.
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