TaxTMI 
TaxTMI 
2016 (9) TMI 606
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....5/Mum/2015 pertaining to assessment year 2011-12 is taken as the lead case, since it was a common point between the parties that facts and circumstances in both the years are similar. 3. ITA No.4045/Mum/2015:- This appeal is directed against an order passed by CIT(A)-59, Mumbai dated 17/04/2015, which in turn arises out of an order passed by the Assessing Officer under section 221(1) r.w.s. 201(1) of the Income Tax Act, 1961 (in short 'the Act') dated 29/05/2013. In this appeal, assessee has raised the following Ground of appeal. " 1. That on facts and circumstances of the case and in law the Id. CIT. (Appeals) has erred in confirming the penalty imposed u/s. 221(1) r.w.s. 201(1) at Rs. 5,10,000/- by the Id. Dy. CIT (TDS)- 2(1), Mumba....
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....e basis of an estimated provision made in the books of account as on 31/03/2011. It was explained that when actual estimation of expense was made, the requisite tax was deposited along with applicable interest. The assessee also pointed out that it did not have adequate liquidity at the relevant point of time, but the delayed deposit was made along with applicable interest. The Assessing Officer was not satisfied with the explanation rendered by the assessee and held that there was no reasonable and sufficient reason for delay in payment of the TDS. Accordingly, he levied a penalty of Rs. 5,10,000/-, which was equivalent to around 3% of the defaulted amount of TDS. The said levy of penalty has been sustained by the CIT(A) by noticing that n....
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....21(1) r.w.s. 201(1) of the Act could not be deleted merely because of the financial crunch as held by the lower authorities, based on the decision of the Hon'ble Calcutta High Court in the case of Jubilee Investments & Industries Ltd. vs. ACIT, 106 Taxman 210(Cal) as also the decision of the Amritsar Bench of the Tribunal in the case of M/s. Kapsons Industries Ltd. vs. ITO, in ITA Nos. 262/(Asr)/2012 & Others order dated 8/10/2012 and that of Delhi Tribunal in the case of ACIT vs. Catmoss Retail Ltd., 142 TTJ 273(Del). 7. We have carefully considered the rival submissions. Factually speaking, there is no dispute to the fact that the assessee HUF has not deposited the tax deducted at source to the Government Treasury within the stipulated....
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....ash liquidity at the relevant point of time, which lead to the delay in deposit of tax into the Government Exchequer. Absence of adequate cash liquidity or financial crunch, in our view, is not a good and sufficient reason to mitigate the rigors of section 221(1) of the Act , as has been held by the Hon'ble Calcutta High Court in the case of Jubilee Investments & Industries Ltd. (supra). As per Hon'ble Calcutta High Court, any loss or profit in the business of the assessee has nothing to do with the deposit of the TDS amount, therefore, the plea of financial stringency cannot be a ground to mitigate the rigors of section 221(1) of the Act. In this context, the following discussion in the judgment of Hon'ble Calcutta High Court is quite rele....
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....7.1 Therefore, following the aforesaid decision, we reject the plea of the assessee based on the financial stringency. 7.2 The second ground, which has been canvassed as a 'good and sufficient reason' is the fact that assessee bonafidely in a suo-motu action deposited the requisite TDS into the Government Treasury along with interest thereon. It has also been pointed out that assessee deposited the TDS into the Government Treasury even before the corresponding interest payments were made to the respective creditors. A pertinent point which also emerges is that such suo-motu deposit has been made by the assessee even before any proceedings under section 201(1) were initiated by the Assessing Officer. On this aspect, the Ld. Departmental R....
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....isite TDS along with applicable interest into the Government Treasury even before any proceedings under section 201(1) of the Act were initiated by the Assessing Officer. In our considered opinion, considering the penal nature of section 221 of the Act, it would be in the fitness of things to make a distinction between a case where the TDS is deposited suo-motu before any proceedings are initiated by the Assessing Officer and a case where the deposit of the TDS is made after initiation of proceedings by the Assessing Officer but before levy of penalty. Considered in the aforesaid light, in our view, the said Explanation would not militate against the assessee in the present case, because of the aforesaid distinction. Having considered the e....