1999 (9) TMI 928

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pplication as contained in annexure 1 was moved for extension of time on the ground of financial constraint and further on the ground that the company has submitted a revival proposal to the B.I.F.R. and is waiting its order on the proposal. It was stated in the application that being a sick company raising outside funds for the current operation was quite impossible. This application was moved on September 8, 1997 and was rejected on September 9, 1997 and simultaneously by the same order penalty to the tune of Rs. 1,88,250 for the month of June, 1997 and Rs. 1,97,930 for the month of July, 1997 was imposed. It further appears that after the said penalty order was passed the revisionist had deposited the entire amount of tax due along with ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e application as contained in annexure 1 for extension of time to deposit the tax due was rejected by the order by which the penalty was imposed. 9.. The submission of Sri Agrawal is that the company of the revisionist was declared sick by the B.I.F.R. on July 9, 1997 as is evident from copy of the scheme prepared by the Board for Industrial and Financial Reconstruction as contained in annexure 7. He points out that the Tribunal has wrongly observed in its order that the unit was neither sick nor was declared as such by the B.I.F.R. It is further submitted that the settled view of law has been ignored by the Tribunal while allowing the appeal. The learned Standing Counsel justified the order on the ground that the tax due for the months ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... tax, if any, payable by him......." 12.. It is evident from perusal of the above provisions of law that penalty under section 15-A(1)(a) of the Act can be imposed only when the assessing authority is satisfied that the dealer has failed to deposit the amount of tax due without reasonable cause. In the instant case, it is evident from annexure 7 that the revisionist was declared a sick unit and it was under financial constraint. This was also a finding of fact recorded by the first appellate authority. That was a reasonable cause which ought to have been considered by the Tribunal. Penalty cannot be imposed for the mere reason that the assessee has failed to deposit the tax due before furnishing of the return or along with the return. Be....