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2014 (6) TMI 1 - AT - Income TaxPenalty u/s 271C of the Act – Failure to deduct TDS u/s 194C of the Act – Payment made to broadcasters of different TV channels on account of air time charges – Held that:- Following ORTEL COMMUNICATIONS LTD Versus ASSTT COMMISSIONER OF INCOME TAX (TDS) [2013 (6) TMI 373 - ITAT CUTTACK] - levy of penalty u/s 271C is not automatic - Before levying penalty, the concerned officer is required to find out that even if there was any failure referred to in the concerned provision the same was without a reasonable cause - The initial burden is on the assessee to show that there existed reasonable cause which was the reason Tor the failure referred to in the concerned provision - Thereafter the officer dealing with the matter has to consider the explanation offered by the assessee or the person, as the case may be. An honest belief founded upon reasonable grounds, of the existence of a state of circumstances, which assuming them to be true, would reasonably lead any ordinary prudent and cautious man, placed in the position of the person concerned, to come to the conclusion that the same was the right thing to do - The assessee has given explanation before the authorities that the due to circumstances prevailing and under bonafide belief that tax was not required to be deducted at source U/S.194C on the payments - the non-deduction of tax at source on such payments cannot be said to be without a reasonable cause within the meaning of Section 273C - the penalty levied u/s 271C is not justified and is liable to be set aside – Decided in favour of Assessee.
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