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2016 (5) TMI 69 - AT - Income TaxPenalty under section 271C - failure to deduct tax - Held that:- In the present case, we find that the assessee has not been treated as an "assessee-in-default" as per section 201 of the Act and is, therefore, neither liable to deduct nor pay any tax as per Chapter XVII-B. In such circumstances, we find that the question of levy of penalty under section 271C does not arise. In view of the same we find no merit in the contention of the learned Departmental representative that the assessee had no reasonable cause for not deducting tax at source. Further, we hold that in lieu of the provisions of section 273B which states that no penalty shall be leviable in cases where reasonable cause for the default committed has been demonstrated, the penalty levied under section 271C is liable to be deleted. - Decided in favour of assessee
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