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TMI Blog2014 (1) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... d suitable relief be granted to the appellant. 2. That the TDS u/s. 1941 is not applicable to assessee as the rent payments to individual parties were below TDS limits, That when TDS itself is not applicable, no penalty u/s. 271C for violation u/s. 1941 is attracted Therefore, the penalty levied u/s 271C of Rs.54,800/- be deleted and suitable relief be granted to the appellant." 3. The brief facts as noted by the AO in the penalty order are that the during the present year, there was a failure on the part of the assessee in deducting tax under Sections 194A and 194I, because the assessee did not deduct tax at the rate of 10% under section 194A, at the time of making interest payment against fixed deposits to the extent of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khs, and therefore, the assessee was under bona fide belief that no TDS was required to be deducted, and therefore, the penalty imposed by the AO under section 271C in respect of this default is not justified. 5. Regarding the penalty imposed by the AO in respect of default of the assessee under section 194A, it was submitted that in some cases, the TDS was deducted under section 194A, and only in some cases, there were failure on the part of the assessee to deduct TDS. He further submitted that the default committed by the assessee for non-deduction of TDS under section 194A was in respect of only about 35 persons but the assessee has already deducted in respect of 975 persons, and therefore, the default of the assessee is in respect of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons, and the total default is of Rs.4,91,710/- being the amount of TDS which was required to be deducted by the assessee under section 194A, but it was not deducted. As per the order of the learned CIT(A), it is also seen that the assessee has already deducted TDS to the extent of Rs.9,78,292/- for the year under consideration, as has been noted by the learned CIT(A) at page no.9 of his order. As per the copy of the TDS return filed by the assessee for the preset year in form no.26 & 27A submitted before us, it is seen that such deduction of TDS was in respect of 975 persons. This goes to show that number of persons from whom TDS was not deducted is about 3.5% of total persons from whom TDS was to be deducted under section 194A. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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