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2016 (9) TMI 437 - AT - Income TaxPenalty U/s 271(1)(c) - Held that:- It is a fact that the ld Assessing Officer in assessment proceedings had not mentioned any particular limb of penalty whether it is for concealment of income or for furnishing inaccurate particulars of income. He also had not given any finding in the penalty order that this penalty was on account of a particular limb. The ld DCIT at the time of imposing penalty, has also not taken approval from the ld JCIT U/s 274(2)(b) of the Act. It is also undisputed fact that the assessee has not deducted TDS on commission expenses claimed during the year under consideration but it has been explained that this provision was inserted w.e.f. 01/4/2005 which was amended from time to time. There was an ambiguity and doubts in application of this provision. The auditor of the assessee had also not pointed out this defect in the audit report whether TDS was liable to be deducted or not on commission expenses claimed by the assessee. Non-deduction of TDS is a technical violation U/s 40(a)(ia) of the Act. The disallowance under this Section are made on the basis of deeming provision held that legal fiction created U/s 40(a)(ia) cannot be extended for levy of penalty U/s 271(1)(c) of the Act as the deeming provision inserted for specific purposes. The case laws relied upon by the assessee are squarely applicable, therefore, we uphold the order of the ld CIT(A). - Decided against revenue.
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