Appeal allowed for statistical purposes; fresh adjudication ordered after rectifying self-assessment tax non-payment defect.

Valley Iron And Steel Co. Ltd. Versus ACIT, Central Circle 5 Jhandewalan, New Delhi.

Valley Iron And Steel Co. Ltd. Versus ACIT, Central Circle 5 Jhandewalan, New Delhi. - TMI Issues Involved:
1. Delay in filing the appeal and condonation of the delay.
2. Financial difficulties as a reasonable cause for not depositing self-assessment tax.
3. Sustainability of penalty levied under Section 140A(3) of the Income Tax Act.
4. Penalty for default of payment of interest.
5. Calculation and excessiveness of penalty at 100%.

Detailed Analysis:

1. Delay in Filing the Appeal and Condonation of the Delay:
The primary issue was whether there was a delay in filing the appeal and if so, whether it could be condoned. The assessee argued that the appeal was filed within the prescribed period of 30 days from the date of service of the relevant order, and thus, there was no delay. The Tribunal had earlier directed that the date of remittance of self-assessment tax should be considered as the date of removal of the defect in filing the appeal. The CIT(A) initially dismissed the appeal for non-payment of the tax due at the time of filing the appeal, but this was set aside by the Tribunal, which directed the CIT(A) to consider the appeal on merits after the defect was removed.

2. Financial Difficulties as a Reasonable Cause for Non-payment:
The assessee claimed financial difficulties as the reason for not depositing the self-assessment tax on time. The CIT(A) rejected this argument, stating that the assessee had a substantial turnover and failed to provide specific financial details to support the claim of financial hardship. The Tribunal noted that the assessee had paid the self-assessment tax in installments, but the final payment was made only after the Tribunal's order.

3. Sustainability of Penalty under Section 140A(3):
The assessee contested the penalty of Rs. 6,42,85,283 levied under Section 140A(3) for non-payment of self-assessment tax. The Assessing Officer had imposed this penalty after finding no reasonable cause for the non-payment. The Tribunal directed the CIT(A) to adjudicate the appeal on merits after considering the removal of the defect (payment of self-assessment tax).

4. Penalty for Default of Payment of Interest:
The assessee argued that no penalty should be levied for the default of payment of interest. This issue was intertwined with the overall question of the penalty's sustainability and the financial difficulties claimed by the assessee.

5. Calculation and Excessiveness of Penalty at 100%:
The assessee contended that the penalty calculated at 100% was excessive and without basis. The CIT(A) had reduced the penalty in a previous order due to financial difficulties but did not find sufficient evidence to condone the delay in this case. The Tribunal found that the CIT(A) did not follow the Tribunal's directions correctly and needed to adjudicate the appeal on merits once the defect was removed.

Conclusion:
The Tribunal concluded that the CIT(A) failed to notice that the appeal was originally filed within the prescribed period and should have adjudicated the appeal on merits after the defect (non-payment of self-assessment tax) was removed. The Tribunal set aside the CIT(A)'s order and restored the appeal for adjudication on merits in accordance with the law. The appeal of the assessee was allowed for statistical purposes.