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2015 (9) TMI 179 - AT - Income TaxPenalty levied u/s 271C - non deduction of TDS from the payments made to creditors for expenses, unpaid labour charges, job work charges, transport charges, labour charges and royalty payments - Held that:- Assessee in the present case has given explanation before the authorities below 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 in question. Moreover, no such issue was made out by Revenue in A.Y. 2002-03, in which year assessee has paid an amount of ₹ 1060.04 lakhs as against ₹ 948.09 lakhs during this year. Thus 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. Therefore, the penalty levied u/s.271C in the instant case is not justified. As for as the short deduction is concerned, the assessee itself did not pursue the matter and conceded the lapses, which is evident from the order of the Tribunal in quantum appeal. Therefore, there was lapse on the part of the assessee by short deducting tax at source from payments made to Job work charges and Transportation charges u/s 194A and 194C for the A.Y. 2003-04 and u/s 194C for the A.Y. 2004-05, which was accepted by the authorized representative before the Bench. Thus short deduction of TDS u/s 194A amounting to ₹ 38,268/- and Job work charges and transportation charges u/s 194C amounting to ₹ 65,555/- for the A.Y. 2003-04 and short deduction of TDS u/s 194C for labour charges and transportation charges amounting to ₹ 40,900/- for the A.Y. 2004-05 is confirmed. - Decided in favour of assessee in part.
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