Ultra vires penalty provision cannot sustain self-assessment tax penalty; unenforceable law led to deletion.

Penalty for failure to pay self-assessment tax in time under section 140A(3) could not be sustained because the penalty provision had already been declared ultra vires and therefore unenforceable. The Tribunal rejected the assessee's plea of paucity of funds on the facts, noting that financial inability did not excuse non-payment when liquid funds were available. The decisive point was the invalidity of the penalty-enabling provision itself, so the penalty was deleted.

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Issues: Whether penalty levied for failure to pay self-assessment tax in time under section 140A(3) of the Income-tax Act, 1961 could be sustained when the provision had been struck down as ultra vires.

Analysis: The assessee's plea of paucity of funds was rejected on the facts, as financial inability did not justify non-payment of self-assessed tax when liquid funds were available. The decisive consideration, however, was that the provision empowering penalty under section 140A(3) had been declared ultra vires by the Madras High Court. The Tribunal treated that provision as not enforceable and held that the penalty could not stand.

Conclusion: The penalty was unsustainable and was deleted.

Ratio Decidendi: A statutory penalty cannot be sustained if the provision creating it has been struck down as ultra vires and is therefore unenforceable.

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