TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 6
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....y self assessment tax before filing return of income u/s. 140A of the I.T. Act. If the assessee fails to pay, then the assessee is deemed to be an assessee in default in respect of tax and interest remaining unpaid, as per section 140A(3) of the I.T. Act. Thus payment of self assessment tax is an additional facility provided to the assessee to make payment of tax payable that may arise out of some upward revision/correction in their income at the time of filing their return. The assessee was therefore directed to pay the taxes overdue within 3 days from the date of receipt of letter dated 1/11/2012 which was received by the assessee on 2/11/2012 . However, the said letter was not complied with and therefore, the assessee is deemed to be an assessee in default as per the provisions of section 140A(3) of the I.T. Act in respect of the outstanding amount of self assessment tax of Rs. 92,01,650/- for the assessment year 2012-13. The Assessing officer issued notice under section 221(1) r.w.s. 140A(3) of the Act, which was served upon the assessee intimating that the assessee is deemed to be an assessee in default and to show cause as to why penalty u/s. 221(1) of the Act should not be l....
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....x amounting to Rs. 92,01,650/-. 4. The Assessing officer therefore imposed a penalty of Rs. 18,40,330/- being 20% of Rs. 92,01,650/-. 5. On appeal, the CIT(A) confirmed the order of the Assessing officer. Against this, the assessee has preferred this appeal before us. 6. The Ld. AR submitted that the said penalty is illegal and unsustainable in view of the substitution of sub section (3) of 140A by Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989. Attention is invited to the provision of section 140A(3) as at stood immediately before the said amendment effective from 1-4-1989 which is as follows:- "If any assessee fails to pay the tax or any part thereof in accordance with the provisions of sub-section (1), two percent of such tax or part thereof, as the case may be shall be recovered from by way of penalty for every month during which the default continues". 7. The provision of section 140A(3) after the amendment is also given below. "If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an....
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....plementation of the new scheme of assessment, it is necessary that the assessees should also pay interest due it is necessary that the assessees should also pay interest due under the provisions of the new sections 234A to 234C along with the self-assessment tax before filing the return of income. The Amending Act, 1987, has, therefore, amended sub-section (1) of section 140A to make it mandatory for a person to pay before furnishing the return, tax together with interest payable under any provisions of the Act for delay in furnishing the return or any default or delay in payment of advance tax. Proof of payment of such tax and interest is to be attached with the return. Further, an Explanation has been inserted in the said sub-section (1) to clarify that where the assessee pays only part of, the amount due at the time of filing the return, such payment shall first be adjusted towards interest payable, and balance, if any, shall be adjusted towards the tax payable." "4.17. The old provisions of sub-section (3) of the section provided for levy of penalty for non-payment of self-assessment tax. Since the rate of mandatory interest for failure to pay the tax has not been increased, i....
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.... of the Assessing officer that the default was for good and sufficient reasons, no penalty shall be levied under this section." Thus it is clearly directory". He prayed to delete the penalty and do justice. 15. The Ld. DR submitted that in this case, it is apparent from the records that the assessee has failed to deposit the amount of self assessment tax for the assessment year 2012-13 which was as per the return of income filed by the assessee showing the tax liability of Rs. 92,01,650. Although the return has been filed in time, the amount of tax, as worked out by the assessee themselves, could not be remitted in time. Here, the immediate issue is not relating to any dispute regarding the demand of Rs. 92,01,650/-. It is only relating to the payment of such demand where the assessee as submitted that because of financial difficulties and other problems they could not remit the same. Further, section 140A(3) deals with any failure on the part of the assessee to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section 1 shall be deemed to be an assessee in default, in respect of the tax or interest or both remaining unpaid and all....
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....explained the reasons for non payment. That being so, the Assessing officer concluded that the assessee is in default in terms of sec. 221 r.w.s. 140A(3) of the I.T. Act and levied penalty at 20% of the tax outstanding an imposed a penalty of Rs. 18,40,330/-. 18. Section 140A(3) of the I.T. Act provides that if the assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1) of sec. 140A of the Act, he shall be deemed to be an assessee in default, in respect of tax or interest or both remaining unpaid and all the provisions of this Act shall apply accordingly. The assessee in this case has admittedly failed to pay the admitted tax amount of Rs. 92,01,650/- which is admitted tax and interest. The provisions of sec. 221 will come into force if the assessee fails to explain the reasonable cause as provided u/s. 273B of the I.T. Act for not depositing the tax in time with the Government by the assessee and therefore, the penalty u/s. 221 of the Act ought to be imposed by the Assessing officer. The assessee is not able to point out any reasonable cause for not depositing the admitted tax with the Government. The assess....
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....o the credit of the Government before furnishing the return and the return of income shall be accompanied by proof of payment o such tax and interest as provided u/s. 140A(1) of the Act and there is no requirement under the Act for passing an order by the Assessing officer for payment of self-assessment tax by the assessee separately. The liability to pay self-assessment tax arises on the assessee on the basis of the return of income furnished by it and the failure to pay the whole or any part of such interest or tax payable in accordance with provisions of s. 140A(1), renders the assessee to be in default in respect of tax or interest or both remaining unpaid as per the statutory provision of s. 140A(3). The tax, interest, or any other sum found payable in accordance with the assessment or any other order passed by the Assessing officer under the provisions of the Act, are treated differently and in such case a separate notice of demand on the prescribed form has to be served by the Assessing officer upon the assessee specifying the sum so payable in accordance with the provision of s. 156. In this case, the amount found payable by the assessee is in accordance with the return of ....