2015 (6) TMI 455

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....d in brief. The assessee is engaged in the business of trading and investment in shares and securities and also doing financing business. It filed its return of income for the year under consideration declaring a total income of Rs. 43.32 crores. As per return of income the self assessment tax due was Rs. 9.08 crores, but the assessee did not pay the same at the time of filing of the return of income. Hence, the AO held that the assessee company as "assessee in default" for non-payment of self assessment tax before filing the return of income in terms of provisions of section 140A(3) of the Act. Hence, the AO levied penalty under section 221(1) of the Act at 10% of the self assessment tax due from the assessee, which worked out to Rs. 90.85....

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.... return of income and accordingly, it was prayed that the penalty levied under section 221(1) of the Act should be deleted. 5. The assessee had also placed reliance on certain case laws before the tax authorities to support its stand. 6. However, the ld.CIT(A) noticed that the assessee had made investment of Rs. 50.20 crores and it had advanced loans and advances to the tune of Rs. 37.67 crores as on 15.3.2011. The ld. CIT(A) further noticed that the assessee had started paying self assessment tax only after receipt of notice dated 15.2.2011 from the AO. Accordingly, the ld.CIT(A) took the view that financial position of the company is sound and the self assessment tax was not paid only on account of indifferent attitude of the assessee. ....

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....emed to be in default, if the tax and interest is not paid in accordance with the provisions of sec. 140A(1) of the Act. The provisions of sec. 221 (1) provides that 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 sec. 220(2), be liable to pay by way of penalty such sum as the AO may direct. The second proviso states that the AO shall not levy penalty, if the assessee proves that there was good and sufficient reason for non-payment of tax. 10. In the instant case, the only reason furnished by the assessee for non-payment of tax was that it was not having liquid funds and all its funds were locked in shares an....