https://www.taxtmi.com/caselaws?id=56676 Failure to deduct tax at source can still escape penalty under section 271C where the assessee proves reasonable cause under section 273B. On the facts, the payment arrangement was understood as an agency relationship, tax deduction had not earlier been indicated as necessary, and the explanation was not rebutted by the authorities. The non-deduction was therefore treated as a bona fide mistake, not contumacious conduct. As penalty proceedings are quasi-criminal, penalty is not imposed merely because it is legally permissible; the assessee was found to have established reasonable cause and the penalty was not leviable. en-us Sat, 26 Jun 1999 00:00:00 +0530 Mon, 06 Dec 2010 12:25:16 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=56676 Failure to deduct tax at source can still escape penalty under section 271C where the assessee proves reasonable cause under section 273B. On the facts, the payment arrangement was understood as an agency relationship, tax deduction had not earlier been indicated as necessary, and the explanation was not rebutted by the authorities. The non-deduction was therefore treated as a bona fide mistake, not contumacious conduct. As penalty proceedings are quasi-criminal, penalty is not imposed merely because it is legally permissible; the assessee was found to have established reasonable cause and the penalty was not leviable. Case-Laws Income Tax Sat, 26 Jun 1999 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=56676