TaxTMI 
TaxTMI 
2011 (3) TMI 859
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....n the identical grounds in both the appeals and the facts are also identical. Hence, both these appeals are disposed off by this common order for the sake of convenience. 2. The A.O. levied the penalty u/s.221(1) of the I.T. Act of Rs. 2.82 crores for the A.Y. 2007-08 and Rs.1.98 crores for the A.Y. 2008-09. The facts which revealed from the record are as under. The assesseecompany is engaged in the business of reality and civil construction. So far as assessment year 2007-08 is concerned, the due date of filing of the return was 30.11.2007. The assessee did not pay any advance tax for the A.Y. 2007-08. The survey action u/s.133A was conducted in the business premises of the assessee-company. In the course of the survey action, au....
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....e penalty u/s.221(1) of the Act r.w.s.140A(3) as the assessee failed to pay the due tax on the returned income treating the assessee in default in payment of the taxes and interest in respect of both the assessment years. The assessee contended that due to acute shortage of funds it could not pay the tax and offered to pay the same by installment by 31st March 2009. The A.O. rejected the plea of the assessee. It was noticed by the A.O. that the assessee has made substantial sales in the A.Ys. 2007-08 and 2008-09 to the extent of Rs.268.94 crores and Rs.223.25 crores respectively. The A.O. was also not impressed with the contention of the assessee that due to financial crunch the assessee was unable to pay due tax on the return of income. Th....
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....n-payment of the taxes and hence, there was no reason to levy penalty u/s.221(1) of the Act. The assessee could not get any relief from the Ld. CIT(A) and all contentions of the assesses were rejected. Now, the assessee is in appeal before us. 3. We have heard the rival submissions of the parties and perused the records. The survey action u/s.133A was carried out in the business premises of the assessee on 11th and 12 September, 2008. There is no dispute about the fact that the assessee has not paid any advance tax nor had filed the return for the A.Y. 2007-08 till the date of survey, though the same was due on 30.11.2007. So far as assessment year 2008-09 is concerned, on the date of survey, due date for filing of the return was ....
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....reated as a reasonable cause. He further submits that there is a discretion to the A.O. u/s.221(1) for invoking the harsh provision of sec. 221(1) and same is to be invoked in only rare case. It is argued that sufficient safeguards are provided in the Act to compensate the revenue by way of the payment of the interest, in case, the assessee fails to make the payment on the due dates. He further submits that penalty proceedings are qusi-judicial proceedings and A.O. has to establish the deliberate Act on the part of the assessee. He pleaded for canceling the penalty. Per contra, the Ld. D.R. supported the orders of the authorities below. 4. Section 221 reads as under:- (1) "When an assessee is in default or is deemed to b....
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....fact that the assessee has not paid any advance tax in both the assessment years and also did not pay self assessment tax as per provisions of sec.140A of the Act. During the course of the Survey action, audited statement of accounts were found for the A.Y. 2007-08 in which the assessee has declared substantial profit. In the original return filed by the assessee for the A.Y. 2007-08, the same profit was declared, but subsequently the assessee filed the revised return. We do not want to go into the legality and sanctity of the revised return filed by the assessee. The contention of the assessee is that there was financial crunch due to lack of liquidity as reality market was badly affected in that period. The question before us is whether t....
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....rvey action and it was not passed in the finance year 2006-07 or 2007-08. Hence, this defence of the assessee is not helpful to support the contention that due to provisional attachment order, there was liquidity crunch in F. Yrs. 2006-07 and 07-08. The A.O. passed the order u/s.140A(3) treating the assessee in default in respect of the tax and interest remaining unpaid on the income declared in the returns for the A.Ys. 2007-08 and 2008-09. As per the copy of the Balance-sheet filed on record for the year ending 31.3.2007, the cash in hand as on 31.3.2007 was declared at Rs.1,60,71,286/- in addition to the balances in the bank plus F. Ds at Rs.2,44,55,643/- and Rs.3,06,47,176/- respectively. Hence, so far the financial year 2006-07 relevan....