2015 (6) TMI 51

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....oth the appeals by the revenue against the same assessee on same issue were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The issue raised in both the appeals is identical and we proceed to take up the facts and grounds of appeal in ITA No. 1137/Chd/2010 in order to dispose the appeals : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing appeal of the assessee without appreciating the facts of the case. 2. On the facts and in the circumstances of the case and in law the Ld.CIT (A) has erred in allowing the appeal of the assessee without taking into account the material facts on record and believing the version of the assessee wh....

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....e pleas raised by the ld. DR for the revenue in this regard in view of the observations of CIT(Appeals) in para 4 of the appellate order . Upholding the same, we dismiss the ground No.2 raised by the revenue. 6. The issue in ground No.3 raised by the revenue is against the deletion of penalty levied under section 140A(3) read with section 221(1) of the Act at Rs .66 lacs . 7. The facts relating to the issue were that the assessee had filed return of income declaring total income of Rs .8,99,88,410/-on 30.09.2008. The assessee had failed to pay part of the income tax/ interest and after processing return of income under section 143(1) of the Act , penalty proceedings under section 140A(3) read with section 221(1) of the Act were initia....

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.... , 1964 and also the ratio laid down by the Hon'ble Andhra Pradesh High Court in Addl .CIT Vs Sarvarya Textiles Ltd. 137 ITR 319 (AP) and the penalty levied under section 140A(3) read with section 221(1) of the Act was deleted by the CIT(Appeals). 9. The revenue is in appeal against the said order of the CIT(Appeals) . The ld. DR for the revenue pointed out that where the assessee had defaulted in making the payment of taxes and the interest while filing the return of income, the levy of penalty under section 140A(3) read with section 221(1) of the Act was justified. 10. The ld. AR for the assessee, on the other hand, pointed out that because the assessee was in the expansion mode, there was financial crunch and as such the taxes ....

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....taxes were paid along with interest under section 234B & 234C of the Act on a later date. 12. The issue arising before us is in relation to levy of penalty under section 140A(3) of the Act with section 221(1) of the Act for non-deposit of the taxes before filing the return of income. The Courts have time and again laid down the proposition that liberal interpretation should be given to the provisions of section 140A(3) with section 221(1) of the Act. The list of cases have been referred by the CIT(Appeals) . There is no dispute regarding the said issue. However, the perusal of the financial statements of the assessee company for the financial year 2007-08 and 2008-09 reflect the availability of the funds with the assessee which in- tu....