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2021 (8) TMI 148 - AT - Income TaxPenalty levied u/s 271C - Penalty for failure to deduct tax at source - assessee has claimed interest expenses only for the year under consideration after deducting the TDS u/s 194A but failed to deposit the same in the account of government exchequer - HELD THAT:- There remains no ambiguity that the assessee has not failed to deduct the TDS on the expenses as discussed - DR at the time of hearing has also not brought anything on record against the arguments advanced by the assessee with respect to deduction of TDS on the expenses as discussed above. Accordingly we reached to the conclusion that the assessee has deducted the TDS on the expenses as discussed above but failed to deposit the same in the account of Government exchequer account within the specified time. Thus in such a situation, the penalty u/s 271C of the Act is not attracted. We also note that the judgments relied by the authorities below in reaching to the conclusion that the assessee is subject to the penalty under the provisions of section 271C of the Act have been reversed by the subsequent judgment in the case of Lakshadweep development Corporation Ltd [2019 (3) TMI 333 - KERALA HIGH COURT] The assessee cannot be visited with the penalty under the provisions of section 271C of the Act on account of failure on his part to deposit the amount of TDS deducted on the expenses as discussed above within the time specified under the statute. Accordingly the assessee succeeds in its grounds of appeal - Appeal filed by the assessee is allowed.
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