TMI Blog2016 (6) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee cannot be said to be an assessee in default. The authorities below has not disputed this fact that payees of incomes had declared the payments in their income tax return and that is why order u/s 201(1) has not been passed and if the order u/s 201(1) has not been passed the assessee cannot be said to be assessee in default. The Hon’ble Chandigarh Bench of ITAT, in [2016 (5) TMI 69 - ITAT CHANDIGARH] under similar circumstances has deleted the penalty u/s 271 (1)(c) wherein held the assessee being not in default in respect of the amount of tax itself, there cannot be any levy of penalty u/s 271C, more so, where there was a reasonable cause for not deducting the TDS on the payment made by the assessee - Decided in favour of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the Hon ble Supreme Court Judgment in the case of National Thermal Power Co. Ltd. vs. Commissioner of Income Tax 229 ITR 383, it can be raised at any stage. 5. The learned DR did not object to the admission of additional ground raised in the appeals. We find that the ground taken by assessee is a legal ground and therefore we admitted it for adjudication. 6. Inviting our attention to the facts of the case the learned AR submitted that assessee had made certain payments on account of interest to non banking, financial companies and in view of its bonafide belief that it was not required to deduct TDS on payments of interest to non-banking financial companies the tax was not deducted. He further submitted that the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect he invited our attention to the order dated 07.03.2011 and took us to the last para of the order and therefore, he submitted that the penalties has been rightly upheld. 8. The learned AR in his rejoinder submitted that this order was passed u/s 201(1A) and not u/s 201(1) and therefore, no penalty was imposable. 9. We have heard the rival parties and have gone through the material placed on record. We find that it is an undisputed fact that order u/s 201(1A) was passed vide order dated 07.03.2011 and no order u/s 201(1) has been passed as the order pointed out by learned DR was passed u/s 201(1A) and not u/s 201(1). The learned DR was not able to point out any order passed u/s 201(1) of the Act. The amended provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, then there cannot be any scope for levying penalty u/s 27IC of the Act. As in this case the amount of tax has been paid by the recipient of the income. Being so, the provision of section 271C cannot be applied to the assessee's case as these provsions clearly state that if any person tails to deduct whole or any part of the tax as required under the provisions of Chapter XVII B , then such person shall be liable to pay by way of penalty an amount equal to the amount of tax which such person failed to deduct or pay as above said. Being so, in the present case the assessee being not in default in respect of the amount of tax itself, there cannot be any levy of penalty u/s 271C, more so, where there was a reasonable cause for not dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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