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2016 (6) TMI 421 - AT - Income TaxLevy of penalty u/s 271C - non deduction of tds - assessee treated as 'assessee in default' - Held that:- We find that it is an undisputed fact that order u/s 201(1A) was passed vide order dated 07.03.2011 and no order u/s 201(1) has been passed as the order pointed out by learned DR was passed u/s 201(1A) and not u/s 201(1). The learned DR was not able to point out any order passed u/s 201(1) of the Act. The amended provisions of section 201 of the act also states that if the person to whom any amount has been paid without deduction of tax and such person had taken such income in their income tax returns and had paid taxes on such income the assessee cannot be said to be an assessee in default. The authorities below has not disputed this fact that payees of incomes had declared the payments in their income tax return and that is why order u/s 201(1) has not been passed and if the order u/s 201(1) has not been passed the assessee cannot be said to be assessee in default. The Hon’ble Chandigarh Bench of ITAT, in [2016 (5) TMI 69 - ITAT CHANDIGARH] under similar circumstances has deleted the penalty u/s 271 (1)(c) wherein held the assessee being not in default in respect of the amount of tax itself, there cannot be any levy of penalty u/s 271C, more so, where there was a reasonable cause for not deducting the TDS on the payment made by the assessee - Decided in favour of assessee.
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