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2017 (9) TMI 297 - AT - Income TaxPenalty u/s 271C - short deduction of tds - Whether TDS to be deducted @ 2% u/s 194C or 10% u/s 194J - bonafide belief - reasonable cause for deducting TDS at a lower rate - Held that:- There was bonafide and reasonable cause on the part of the assessee for short deduction of TDS as the assessee was under a genuine and bonafide belief for not deducting the tax at source u/s 194J instead of 194C as stated by the company M/s NYSA Communications P Ltd on the basis of their previous invoices and as per the expert opinion of Chartered Accountant. Both confirmed that the TDS was deductible @2% and the same was accordingly deducted. Still being dissatisfied, the assessee asked the ITO TDS to advice on the said issue who advised to deduct tax @10%. Accordingly, the assessee deducted the tax @10% from next bill and paid the difference along with interest of first bill on the amount short deducted by it. The fact that the assessee itself obtained the opinion from department itself clearly shows that there was bonafide intention on the part of the assessee not to make any default and the correct TDS was deducted out of the next payment made to NYSA Communications (P) Ltd and paid accordingly. Hence it is not a fit case for levying penalty - Decided in favour of assessee.
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