TaxTMI 
TaxTMI 
2016 (5) TMI 1169
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.... within a period of two months from the filing of return of income by the appellant and return of income was filed before the due date u/s 139(1) of the Act. (iii) That the learned Commissioner of income Tax (Appeals) has also failed to appreciate that there was reasonable cause on the part of the appellant for delay in deposit of self-assessment tax and the alleged breach was at best a technical and venial breach, for which no penalty is leviable. (iv) That the learned Commissioner of Income Tax (Appeals) has further erred both in law and on facts in not admitting additional evidence filed by the appellant company to explain that cash balance of Rs. 93.80 lacs was balance lying at various branches of appellant company and, which had been utilized to repay bank borrowing and as such, there was no default by the appellant company. It is therefore prayed that the penalty levied and sustained of Rs. 23,46,616/- may kindly be deleted and appeal of the appellant company be allowed." Whereas the following grounds of appeal has been taken by the Revenue in ITA No.398(Asr)/2014. "(i) Whether the Commissioner of Income Tax (Appeals), Jammu was right in law in reducing the penal....
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....55,026/- u/s 221(1) of the Act. 4. Aggrieved with the order the assessee filed appeal before learned CIT(A) and submitted detailed submissions. The learned CIT(A) after going through the submissions filed by assessee allowed part relief to the assessee by holding as under: "4.4 Ground of appeal Nos.4 to 6, 8 & 9 related to the plea of the appellant that the appellant deposited the tax within two months of the filing of return and the delay was on account of reasonable cause. The appellant during the course of penalty proceedings argued that the tax could not be deposited on time because of shortage of funds. However, on verification of cash flow statement submitted by the appellant himself, it was observed by the AO that funds of Rs. 93,86,475/- was available with the appellant which could have been used for meeting its income tax liabilities. It was desirable that the taxes should have been paid as soon as income was earned. The appellant during the course of appellate proceedings has submitted that out of the said balance of Rs. 93.86 lakhs, the amount of Rs. 75.48 lakhs was in corporation bank which was later on used for repayment of bank borrowings. First of all, no such ple....
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.... the deposit of tax was not made immediately after the close of the financial year and deferred till the first week of month of December, 2011. In CIT vs Smt. Vijaynathimala (1977) 108 ITR 882, (Mad), it was observed that once an assessee has failed to pay the amount of advance tax on the due date, default has^ occurred and liable for penalty. The fact that the assessee has subsequently paid the amount after the issue of notice by the Assessing Officer could not wipe out the default which had already occurred. In principle, I agree so far as levy of penalty is concerned but do not agree entirely with the quantum of penalty levied which was at the maximum amount prescribed under the statute. As per scheme of Act, any number of penalties could be levied u/s 221(1) without any time limitation is suggestive of the fact that the maximum penalty may not be levied in the first instance unless situation warrants otherwise. The minimum and maximum penalty prescribed are such amount as the AO may impose for default or continuing default and amount of tax in arrear respectively. From facts and circumstances of the case the gravity of default did not warrant maximum penalty in this case. Th....
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....pellant. It is observed that as per the provisions of section 140A, the assessee shall be liable to pay tax together with interest before furnishing the return and the return shall be accompanied by the proof of payment of such tax and interest. Therefore, the assessee is in default for making payment of tax, if he does not deposit self assessment tax before filing of return. Section 140 A talks about payment of tax before filing of return and not before due date of return. Therefore, the appellant could not take the benefit of extended period up to due date of filing of return for deposit of tax, if return was filed before the due date of filing of return. Therefore, this plea of the appellant could not be sustained as per the provisions of income tax Act. For the sake of arguments, it is also noticed that as per the present provisions, the return is treated as defective return u/s 139(9) if tax is not deposited before the filing of return. Now, if the return is filed before due date without deposit of self assessment tax, the return is to be considered as defective and assessee cannot plead that the return cannot be treated as defective till the due of filing of return. This grou....
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....eriod of filing of return was extended to 30th November, 2010 and it was again extended to 31st January, 2011. The learned AR submitted that the assessee had deposited the due taxes before two months i.e., before the due date of filing of return. Inviting our attention to definition of tax as contained in Section 2(43) of the Act, the learned AR submitted that as per this definition the tax means the Income Tax chargeable under the provisions of this act and does not include advance tax as argued by learned DR. The learned AR in this respect invited our attention to (PB-70) where a copy of notice issued by Office of Assistant Commissioner of Income Tax was placed and submitted that the Department itself had issued notice for non payment of self assessment tax u/s 140A of the Act. The learned AR submitted that assessee had deposited interest under the provisions of section 234A to 234C of the Act which amounted to approximately Rs. 21 lacs and therefore, the imposition of penalty was not justified. Inviting our attention to detailed submissions filed before learned CIT(A) the learned AR took us to (PB-97 to 114) and submitted that the assessee had filed detailed submissions before l....
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.... up of funds as per paper book page 85 and assessee had not diverted any of its funds for non business purpose, therefore, penalty u/s 221(1) was not imposable as there was reasonable and sufficient cause for non payment of taxes. Reliance in this respect was placed on the following case laws. (i) DCIT vs. Aanjaneya Life Care Ltd. 61 taxman.com 207 (Mumbai_Trib.). (ii) DCIT vs.Sheetal Refineries Ltd. 50 taxman.com 84(Hyderabad-Trib) Replying to the reliance placed by learned DR on the case laws of Mumbai Bench the learned AR submitted that in that case the assessee was not facing financial difficulties, therefore, the Bench had decided against the assessee. 10. The learned DR in his rejoinder submitted that section 221(1) is a mandatory section and tax u/s 140A means under any provisions of the Act and which means advance tax also. Regarding the judgments relied upon by learned AR the learned DR submitted that these cannot be relied as the assessee had not been able to prove financial difficulties. He further submitted the assessee needed to file cash flow statement from June 2009 onwards on which date the first installment fell due. The learned DR further submitted that asse....
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.... or section 91 on account of tax paid in a country outside India; (iv) any relief of tax claimed under section 90A on account of tax apid in any specified territory outside India referred to in that section; and (v) any tax credit claimed to be set off in accordance with the provisions of section 115JAA [or section 115JD],] [the assessee shall be liable to pay such tax together with interest payable under any provisions of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest.] [Explanation- Where the amount paid by the assessee under this subsection falls short of the aggregate 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.]***** [(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 ....