TaxTMI 
TaxTMI 
2016 (5) TMI 1031
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.... 2.1 The assessee has filed petition for admission of additional ground that the above legal ground charging of levy of penalty was not raised on earlier occasion before this Tribunal die to lack of proper professional advice and the omission to include this ground on the part of the assessee at the time of filing of the appeal is not wilful or wanton. Further, it was stated that the addition ground involves a legal issue, which does not require investigation of any fresh fact for adjudication of the same. He relied on the judgment of the Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (229 ITR 283), wherein it was held that a legal ground can be raised at any stage of appeal. Thus, he prayed for admission of additional ground. 2.2 On the other hand, the ld. DR objected the admission of the additional ground. However, in our opinion, the issue raised by the assessee does not require any investigation of facts and the facts are already on record. As such, we do not agree with the argument of the ld. DR that it should not be admitted. Accordingly, relying on the decision of the Supreme Court in the case of National Thermal Power Co. Ltd cited supra, we admit....
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....ancial crisis during the period and made the payment of self-assessment tax by instalments as follows : Date of payment Challan No. Income-tax Interest 30.08.2012 11002 24,00,000/- - 26.09.2012 11387 24,00,000/- - 18.10.2012 10204 72,00,000/- - 22.11.2012 10504 72,00,000/- - 20.12.2012 10431 1,71,39,561/- 28,60,439/- 04.01.2013 14362 - 1,52,17,724/- Total 3,63,39,561/- 1,80,78,163/- Further, he submitted that the assessee received the following amounts on sale of deluxe apartment and building : 2008-09 Rs. 73,15,200.00 2009-10 Rs. 12,40,90,310.00 2010-11 Rs. 4,75,00,000.00 Total Rs. 17,89,05,510.00 5.1 The ld. AR has also filed details of payment made for acquiring Thiruvanmiyur property, which is as follows : F.Y 2009-10 Rs. 4,50,00,000.00 F.Y 2010-11 Rs. 36,25,00,000.00 F.Y 2011-12 Rs. 1,40,00,000.00 Total Rs. 42,15,00,000.00 According to the ld. AR, the above tables clearly show that the assessee is in expansion of business and invested huge money in the project, which is earning of inc....
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....er that the assessee is in default, penalty cannot be levied. 6. On the other hand, the ld. DR submitted that the first notice issued u/s.221(1) of the Act dated 26.9.2012 clearly shows the assessment year as 2010-11 and that notice was acknowledged by Shri Om Prakash Agarwal on 27.9.2012. In the notice u/s.221(1) of the Act dated 8.10.2012, it is also clearly stated the asst. year 2010-11. Since, there was no response for these two notices, letter dated 5.12.2012 was issued to the assessee, which was received on 8.12.2012. In that letter, inadvertently the assessment year was typed as 2012-13 instead of 2010-11. In that letter, notice u/s.221(1) dated 8.10.2012 was referred to by the AO and it was clearly written the asst. year as 2010-11, being so, the plea of the assessee's counsel that there was no notice for the asst. year 2010-11. He relied on the provisions of sec. 220(2) of the Act to hold that any such clerical mistake to be rectified in the view of the provisions of the Act. Further, the ld. DR submitted that there is no merit in the contention of the ld. AR in stating that the assessee has not received the notice dated 26.9.2012, because the assessee has acknowledged ....
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....d the return was signed by Mr.Om Prakash Agarwal. In the return, it was mentioned that the tax payable was nil. This being the case, when the letter dated 05.12.2012 was received by the appellant in which the AY was wrongly written as 2012-13 instead of AY 2010-11, the appellant's contention that the notice was ignored because no proceedings were pending for AY 2012-13 becomes unbelievable because the firm having filed the return for AY 2012-13 with no tax payable. The appellant was certainly aware that the proceedings related to AY 2010-11 and not 2012-13 (since no demand was payable as per return for AY 2012-13). As on 31.03.201, the appellant had enough funds which are as under: 31.03.2010 31.03.2009 Mr. V. Kumaravel 4,50,00,000 Nil Mr. S. Umapathy 40,00,000 10,00,000 Tamil Nadu Mercantile Bank 6,36,34,423 1,55,09,063 Chitra Construction 1,00,90,000 Nil DABC 4,73,01,190 Nil BB Asia Impex Pvt. Ltd. 1,18,26,584 1,80,00,636 Petroplast Industries Ltd. Nil 2,14,21,656 Assets side as on 31.03.2009 was Rs. 8,72,03,826/- and increased to Rs. 21,24,24,810/-. In the circumstances, paucity of funds as one of ....
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....te of the tax and interest as aforesaid, the amount so paid shall first be adjusted towards the interest payable as aforesaid and the balance if any, shall be adjusted towards the tax payable." 8. As evident, s. 140A provides that where any tax is payable on the basis of any return to be furnished, after taking into account the amount of tax, which has already been paid, the assessee shall be liable to pay such tax together with any interest payable for, inter alia, any default or delay in the payment of advance tax, before furnishing the return and proof of payment of such tax and interest is to accompany the return. As per the Explanation, where payment made under s. 140A(1) falls short of the aggregate of the tax and interest payable as envisaged by s. 140A(1), the amount paid shall be first adjusted towards the interest payable and the balance, if any, shall be adjusted towards the tax payable. 9. Sec. 221 (1) and the Explanation thereto read as under : "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-s. (2) of s. 220, be lia....
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....amount for of Rs. 3,63,39,561/- and interest of Rs. 1,80,78,163/- before 04.01.2013 i.e., before passing of penalty order u/s.221(1) of the Act on 08.02.2013. Thus, the explanation of the assessee is that insufficient funds to pay the self-assessment tax and according to the assessee, payment of business commitment is far most important than the payment of tax, which was discharged with interest. 13. First of all, un-denyingly the assessee was in default for making the payment of tax as well as interest leviable u/s.234A, 234B & 234C of the Act for which reason only penalty u/s.221(1) of the Act has been levied by the Authority. In the case of Nachimuthu Industrial Association Vs. Learned Commissioner of Income Tax (123 ITR 611)(Madras) wherein it was held that "income was exempt and that there was paucity of funds are relevant circumstances for deletion of penalty u/s.221(1) of the Act. Further, it was seen that the assessee is not being habitual defaulter with no adverse history tainted on the assessee goes to prove that the default was committed without malafide intention and under extreme paucity of funds, so when substantial justice and technical considerations are pitted a....