Penalty u/s 271(1)(c) for non deduction of tds

This query is : Resolved

Atul Jain (Querist)
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02 January 2012 Will there be any penalty leviable u/s 271(1)(c) for non-deduction or short deduction of TDS and in case the expenditure for the same has be disallowed by the A.O.??

If No,then kindly cite any SC/HC decision in the matter.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 January 2012 Disallowance of an expense per se cannot mean that the assessee has furnished incorrect particulars of it income. Therefore, penalty u/s 271(1)(c) can't be levied. However, failure to deduct tax at source attracts penalty provisions of section 271C of the I.T Act,1961.