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2017 (10) TMI 682 - AT - Income TaxPenalty u/s 271(1)(c) - non-deducting and non-depositing the TDS - Held that:- Omission for non-deduction of the TDS was not intentional rather due to bonafide mistake as immediately after pointing out by the tax auditors, TDS was deposited by the assessee company out of its own pocket without collecting it from the deductee. Assessee company has even deposited the TDS even before deduction made by the revenue authorities. So, we are of the considered view that it was a reasonable cause for the assessee company not to deposit the TDS within time. Furthermore, penalty order u/s 271(1)(c) of the Act has been passed without declaring the assessee in default by passing order u/s 201(1) of the Act. So, when AO has not recorded his satisfaction for initiation of the penalty u/s 271(1)(c) in the order required to be passed u/s 201(1) of the Act, the penalty order is not sustainable. - Decided in favour of assessee.
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