penalty for non deduction of TDS

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Dev (Querist)
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16 July 2009 can a penalty u/s 271C be avoided if the assessee pays amount of TDS from his own pocket without deducting it from party to whom it has made payment?

taxindiaconnect

taxindiaconnect (Expert)
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16 July 2009 I hope your query is that if the assessee do not deduct TDS and pays the same from his own pocket, whether the penalty for non deduction is attracted or not. If my understanding is correct, no peanlty can be levied in such case if the deductor has grossed up the amount of tax and such TDS is paid in time without any default. This provisions of grossing up is there in section 196 of IT Act on payment without deduction of taxes. .