Penalty u/s 271c & sec 40(a) disallowance


This query is : Resolved 

(Querist)
23 April 2013 There has been an expense where TDS was deductible by the assessee u/s 194A, but was not deducted and such expenses was disallowed for non deduction of TDS u/s 40(a) of the Income Tax Act while computing his taxable income.

My Query is whether Penalty can be levied u/s 271C for non deduction of TDS on such expenses where they have been disallowed u/s 40(a)?

CA Krunal (Expert)
23 April 2013 Yes SEc.271C is independant and it can be invoked.

However you can prove that there was reasonable cause to belive that no deduction of taxes were required and hence you can request for waiver of penatly


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