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2016 (3) TMI 818 - AT - Income TaxPenalty under section 271 C - failure to deduct tax on payment made on account of salary - Held that:- In FY 2008-09 the assessee was found to have failed to deduct tax on payment made on account of salary amounting to ₹ 1,54,072/-. Subsequently an order under section 154/201(1)/201(1A) was passed stating that since the entire amount had either been paid by the deductees or was not required to be paid by the deductees after claiming relief under section 89 of the Act, the entire demand raised on the assessee was deleted and only interest on account of delay in payment of TDS was levied under section 201(1A) amounting to ₹ 499/-. We find that the assessee had given an explanation for non deduction of TDS as stated above by the Ld. AR which has not been found to be false by the authorities below. The same we find is a good and sufficient reason for not deducting tax. No contumacious conduct can therefore be attributed to the assessee and therefore applying the ratio laid down by the Hon’ble Apex Court in the case of CIT Vs. Bank of Nova Scotia [2016(1) TMI 583 (SC) ] we hold that no penalty under section 271 C is leviable for nondeduction of TDS on salary. In FY 2008-09 we find that the assessee has also failed to deduct TDS on AMC charges amounting to ₹ 288/- for which no explanation has been offered. In the absence of any explanation we uphold the levy of penalty on the same. - Decided partly in favour of assessee
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