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2017 (6) TMI 540 - AT - Income TaxPenalty u/s. 271C - short deduction of TDS - Held that:- Assessee has made deduction in the light of the provisions of section 194C. The revenue authorities were of the opinion that Section 194I/194J was applicable on the impugned payments. In our considered opinion, the A.O. should not have levied the penalty mechanically without going into the merits of the case. On the given facts, it cannot be said that the assessee has willfully defaulted in deducting tax at source. From the above chart, we find that only demurrage charges of ₹ 2,96,820/- were paid without any deduction of tax. We further find that the said payment was made for delay in lifting the goods and the same was of penal in nature which can be safely accepted as a reasonable case for non-deduction of tax at source. As prior to the passing of the order u/s. 200(1) of the Act, the assessee has paid the differential amount of tax in the case of Padhiyar Hi-tech Engineering. This itself shows that there was no mala fide on the part of the assessee to willfully evade the provisions of the law. Section 273B of the Act provides that no penalty shall be imposable on the assessee for any failure referred to in the said provisions if he proves that there was a reasonable cause for the said failure. - Decided in favour of assessee.
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