2015 (8) TMI 1023

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssment tax u/s.140A at the time of filing of return, the Assessing Officer issued a show cause notice asking the assessee to inform whether the above demand has been paid by him and, if so, to file the copy of the challan. The Assessing Officer further asked the assessee if the amount has not been paid, then to explain as to why penalty u/s.221 of the Act should not be levied. Since the assessee did not reply to the show cause notice the Assessing Officer again issued similar notices asking the assessee to explain. In absence of any reply from the assessee despite opportunities given, the Assessing Officer levied penalty of Rs. 42,16,773/- u/s.140A(3) r.w.s. 221 of the I.T. Act. 4. Before CIT(A) the assessee submitted that his father was looking after the taxation matters who was not feeling well from June to September 2006 for which he decided that the returns will be filed in a month or so but suddenly the mother of the assessee fell sick and after a brief illness she expired on 05-10-2006. Subsequently, his father was also admitted to hospital on 10-10-2006 and he expired on 25-10-2006. Thereafter, the assessee's wife also suffered from low blood pressure who was admitted....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....or asked to assessee before granting permission to recover the amount of Rs. 19,17,560/-. Sir, it was his moral/Legal responsibility on account of Income Tax Department as well as Assessee. Sir, Assessing Officer has no right to give permission of third party recovery. Sir, due to issue of this letter by the Assessing Officer, Assesses source of to deposit Self Asst. Tax was closed and the Income Tax Department has recovered Tax Rs. 9,87,530/- as against sale consideration of shares of Rs. 29,90,549/-. Sir, thereafter assessee has no source no banker are ready to give loan. Sir, assesses previous Tax Consultant has guided assessee that to pay self taxes first then we should file appeal. Sir assessee was not in position to pay of taxes, There was no alternative for payment of taxes except to borrow money. Sir, ENAR STAR TRADE LTD has given unsecured loan to assessee hence he can paid the balance of Self Asst. Tax. Sir, here we are producing all the documents for your honors kind verification and out of the same some copies of such documents are submitting on record. Sir, in all these matters assessee cannot understand that what he has to do first. Due to some other family problem....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....he appellant to explain the circumstances for non-payment before levying the penalty u/s 221 though the same were not availed. Since the appellant has been able to explain with evidences the reasons for not being able to pay the taxes fully on the returned income as well as for not being able to appear before the AO, the penalty levied can be deleted for the successful demonstration of good and sufficient reasons for the aforesaid defaults. In view of the discussions made above, ground No.1 is allowed." 8. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us. 9. The Ld. Departmental Representative strongly challenged the order of the CIT(A) in deleting the penalty levied by the Assessing Officer u/s.140A(3) of the I.T .Act. He submitted that the Ld.CIT(A) without affording any opportunity to the Assessing Officer deleted the penalty. He submitted that despite repeated opportunities given by the Assessing Officer the assessee did not bother to appear before the Assessing Officer to substantiate the financial hardship, if any. Therefore, the assessee should not be given any premium for non-attendance before the Assessing Officer. 10. The Ld. Counsel for....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e down due to the scheme of merger which was against the interest of minority shareholders. The prices fell down to Rs. 150 just in 3 months. The assessee had to sell some of the shares at loss. The matter travelled to the High Court challenging the scheme of merger which continued for six years. Subsequently, the shares became ill-liquid and the prices of those shares in 2008-09 went down to Rs. 62. Similarly, the assessee had 1,49,336 in Rama Pulp Ltd., as on 31-03-2008. The prices of those shares which were quoted between Rs. 40 to Rs. 50 came down to Rs. 20/- in March 2008 and subsequently to Rs. 3 to Rs. 4. Similar is the case with various other shares which were held by the assessee. All these facts show that the assessee's default cannot be said to be wilful. Referring to various decisions he submitted that if the default is not wilful and there is sufficient reason to prove that due to financial hardship the assessee could not pay self-assessment tax then the burden shifts to the Revenue to establish that assessee has not deposited tax without good and sufficient reason. If the Revenue cannot prove that there was no sufficient reason in not paying self-assessment tax, t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... some shares held by the assessee at a very less price was also brought to the notice of Ld.CIT(A). It is also a fact that against the quantum addition made by the Assessing Officer the assessee filed an appeal before the CIT(A) which was dismissed by him as non maintainable in view of section 249(4)(a) of the I.T. Act on the ground that tax on the returned income was not paid by the assessee in full before filing of the appeal. Subsequently, the assessee paid self-assessment tax and filed an appeal before the Tribunal against such order of CIT(A). We find the Tribunal vide ITA No.1721/PN/2012 order dated 28-10-2013 for A.Y. 2006-07 allowed the appeal filed by the assessee by restoring the issue back to the file of the CIT(A) with a direction to admit the appeal and decide the issue on merit. All these facts show that there was some bonafide reason on the part of the assessee for non payment of self-assessment tax. 13.1 Under the provisions of section 140A(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....