TaxTMI 
TaxTMI 
TaxTMI 
2014 (12) TMI 855
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....of Income Tax (Appeals), restricting the penalty imposed under Section 140A (3) to 25%. 2. The relevant facts of the case are, the respondent-assessee filed return of income for the Assessment Year 2009-10 on 03.11.2010 declaring an income of Rs. 6,23,36,790/-, on which tax at Rs. 1,26,46,875/- was due and payable after reducing the advance tax paid of Rs. 14,60,000/-. The respondent-assessee had not paid this admitted tax liability under Section 140A of the Act. The return was processed under Section 143(1) of the Act. The intimation under Section 143(1) of the Act was served upon the assessee on 02.01.2011 and the assessee was required to make the payment by 01.02.2011. The assessee did not make the payment of outstanding demand by the s....
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.... regard. The contention of appellant has no forces. A plain reading of the Sec. 140A(3) states:- 91(3) 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 assessee in default in respect of the tax or interest or both remaining unpaid, and all the provisions of this Act shall apply accordingly.) The intention of the legislative is clear on above provisions contained in the Act. The provisions are made to ensure strict compliance of the law. This is evident from the word "shall" used in treating the assessee in default. Any other interpretation will defeat the very ....
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....oes not deserve the maximum penalty. However, the appellant cannot escape from the liability to pay penalty as the intention of the legislature regarding payment of tax is to pay as you earn. The appellant should have arranged for payment of tax as the income was earned. It is quite a vague reason that the appellant was facing financial crisis and that too without any proof and evidence. In my opinion the appellant is definitely an assessee in default and is liable to pay penalty. Since the intention of the appellant was not to evade tax and the entire tax has been paid also, the imposition of maximum penalty is not justified. In view of the above, I restrict the quantum of the penalty to the 25% of the amount levied by the AO, i.e. 25% of ....
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.... the Assessing Officer. He would state that no reasonable cause was shown by the assessee in not depositing the admitted amount due as tax. He would justify the order of the Assessing Officer in imposing penalty @ 100% of the tax due. 6. Having heard the learned Senior Standing Counsel for the revenue, we note, the respondent-assessee had stated, in his reply before the Commissioner of Income Tax (Appeals), that he had paid the admitted tax by 28.04.2011 before the issuance of the show cause notice by the Assessing Officer on 22.11.2011. In addition the assessee was liable to pay interest for the delayed payment. The delay in payment of tax as stated and argued by the assessee was due to the financial hardship or constraint due to huge los....
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....roportionality' in paras No.18 and 34 has held as under:- "18. 'Proportionality' is a principle where the Court is concerned with the process, method or manner in which the decision-maker has ordered his priorities, reached a conclusion or arrived at a decision. The very essence of decision-making consists in the attribution of relative importance to the factors and considerations in the case. The doctrine of proportionality thus steps in focus true nature of exercise - the elaboration of a rule of permissible priorities. xxx 34. As observed by this Court in M.P. Gangadharan and Anr. v. State of Kerala, the constitutional requirement for judging the question of reasonableness and fairness on the part of the statutory authority mu....
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....ssessing Officer i.e. November 22, 2011. Further, we are of the view, when the authorities were justified in restricting the penalty to 25% based on cogent material and finding, more so when it is discretionary, as is clear from the reading of Section 221 of the Act which is reproduced below:- "Penalty payable when tax in default. 221. (1) When an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under sub-section (2) of section 220, be liable, by way of penalty, to pay such amount as the Assessing Officer may direct, and in the case of a continuing default, such further amount or amounts as the Assessing Officer may, from ....