IN THE HIGH COURT OF DELHI AT NEW DELHI 
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  25.03.2009 
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 Present:       Mr R.D.Jolly,  Advocate for the Appellant. 
 Ms Aarti Saini,  Advocate for the Respondent. 
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 + ITA No.149/2009 
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 Penalty under Section 271 (1) (c) of the Income Tax Act, 1961 (in 
 short the ?Act?) was imposed by the Assessing Officer for not deducting tax at 
 source under Section 194 C (2) of the Act.  The CIT(A) in appeal set aside this 
 penalty, after appreciating the facts of the case and arriving at a finding of 
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 fact that the assessee did not deduct tax at source due to a bonafide belief 
 regarding liability to deduct tax at source even as in respect of sub- 
 contractors. This is clear from the following portion of the Order passed by the 
 CIT(A):- 
 ?I have carefully considered the facts and circumstances of the case and I find 
 that the assessee has defaulted for the first time in complying with the TDS 
 provisions, and, this default has taken place on account of the fact that the 
 appellant was under the bonafide belief that once TDS was deducted on payments 
 received by him from M/s Punj LLOYD, there was not further requirement for any 
 deduction of tax in respect of same services involving sub-transporters.  In my 
 opinion, this is a bonafide explanation and thus constitutes reasonable cause 
 within the meaning of section 273B.? 
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 No doubt the ITAT while dismissing the appeal of the Revenue and 
 affirming the aforesaid order has given an additional reason, the fact remains 
 that ITAT also has accepted the finding that there was bonafide belief on the 
 part of the Assessee regarding liability to deduct tax at source even in respect 
 of sub contractors.  These are the pure findings of fact and concurrently 
 arrived at by the two authorities below.  In these circumstances, we are of the 
 opinion that no substantial question of law arises for our consideration. 
 The Appeal is dismissed. 
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 A.K. SIKRI, J. 
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 RAJIV SHAKDHER, J. 
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 MARCH 25, 2009 
 nt 
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 9,10,11,12