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2017 (5) TMI 772 - AT - Income TaxLevy of penalty under section 271C - short/non-deduction of tax at source - Held that:- In case of payments on which the assessee had deducted the tax at source under section194C of the Act and merely because the debate was whether the provisions of section 194J are attracted or not and even if the stand of the Assessing Officer was such, does not make the assessee exigible to levy of penalty under section 271C of the Act and hence the same is deleted. See CIT Vs. Cadbury India Ltd. [2011 (3) TMI 239 - DELHI HIGH COURT] The total amount of payments on which tax in default is ₹ 44,878/- and further short deduction was on amounts totaling ₹ 44,766/-. The assessee has failed to explain as to why the TDS was not applicable on the amounts payable at ₹ 44,878/-. Further the assessee has admitted that it has by oversight not deducted the tax at source on payments on which TDS of ₹ 44,766/- has been held to be in default. We find that where the assessee has short deducted the tax at source and has admitted to have done the same, then the assessee is liable to levy of penalty on such short deduction of tax at source amounting to ₹ 44,766/-. Similarly, the assessee having not established its case of TDS not applicable on which short deduction was to the extent of ₹ 44,878/- the assessee is exigible to levy of penalty under section 271C of the Act. Accordingly, we uphold levy of penalty under section 271C of the Act. TDS on such amounts which were paid in the succeeding year - The assessee claims that there was some reconciliation pending in the case of two transporters and on reconciliation of the amounts the TDS was paid in the succeeding year. In respect of such a claim of the assessee, we find merit in the bonafides of the same and we hold that the assessee had reasonable cause for non deduction of tax on such payments and after reconciliation the assessee admittedly has paid the TDS on a total sum of ₹ 70,387/- in the succeeding year. There is no merit in the levy of penalty under section 271C on such payments.- Decided partly in favour of assessee.
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