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2023 (1) TMI 865 - AT - Income TaxPenalty levied u/s. 271C - order passed u/s. 201(1)/201(1A) for default for short/non-deduction - HELD THAT:- On careful and logical analysis of the basis taken by the AO for imposing penalty u/s. 271C and findings recorded by the CIT(A) for deleting said penalty. First of all we are in agreement with the CIT(A) that the AO himself was not sure at all as to with regard to what payments the assessee failed to deduct TDS at source. When the AO himself was not sure about the omission or non-compliance of TDS provision by the assessee then the penalty u/s. 271C of the Act cannot be held as sustainable. In the case of CIT vs. Bank of Nova Scotia [2016 (1) TMI 583 - SUPREME COURT] held that when the appellant’s conduct is not contumacious then the penalty cannot be levied. This preposition has been consistently followed by lower authorities and in the case of CIT vs. ITOCHU Corp [2004 (5) TMI 53 - DELHI HIGH COURT] and CIT vs. Mistui & Co. Ltd [2004 (5) TMI 17 - DELHI HIGH COURT]. Therefore we are unable to see any valid reason to interfere with the findings arrived by the Ld. CIT(A) and thus uphold the same resultantly appeal of revenue.
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