TaxTMI 
TaxTMI 
2019 (8) TMI 399
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....f appeal the revenue has challenged the deletion of penalty of Rs. 40,34,524/- levied u/s 221 by the AO on the ground that assesSee has not paid the self assessment tax till the date of filling of return of income. 2. The facts in brief are that the assessee is a Public Limited Company engaged in the business of hotel consultancy and operations. The return of income for the assessment year 2007-08 was filed on 15.11.2007 declaring total income of Rs. 36,86,75,655/-. However, the self assessment tax of Rs. 8,06,90,485/- on the return of income could not be paid on the due date due to stringent financial difficulties. In response to the show cause notice as to why the penalty u/s 221(1)could not be levied in the fault of paying the self....
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....Ld. CIT(A). 5. Ld. CIT(A) condoned the delay on the ground that there was no malafide intention to delay the filing of appeal and assessee has explained as to why admitted tax liability could not be discharged on time due to shortage of funds. Ld. CIT(A) has narrated the entire sequence of events before deleting the penalty for the said of ready reference is incorporated herein below :- "10.1 The appellant, being a public limited mainly engaged in the business of hotel management and consultancy, promoted M/s V Hotels Ltd. in the year 2001 for acquiring and setting up of hotels. M/ s V Hotels Ltd. purchased a hotel property in 2002 at Juhu known as Centaur Hotel, Juhu from Government of India under Government of India&#....
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....ult of the sale of shares of the said company, capital gains liability arose on the appellant. 10.3 M/s V Hotels Limited had approached the appellant to make payment of Rs. 40 crore in order to make payments to Banks. It had anticipated that the arbitration will get resolved in September 2007 and assured to return the loans since prospect of generation of funds by it appeared bright as some investors were keen to invest in M/s V Hotels Ltd. Due to non-resolution of the arbitration proceedings, global downturn in economy and set-back faced by the hospitality industry during that period M/s V Hotels Limited failed to keep its commitments to return the loan as a result of which the self- assessment tax due for the assessment year 2007....
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....Rs. 8,06,90,485/- at the time of return of income, however the same has been paid subsequently on installment over a period of time as per the details incorporated above. Assessee had given very elaborate reasons before the authorities below that due to huge financial crunch and hardships, assessee did not had any liquidity to pay the self assessment tax liability. All these facts and explanation have been duly incorporated before the Ld. CIT(A) as discussed above. There are umpteen number of judgments, wherein it has been held that financial stringency is considered to be good and sufficient cause for sufficiency of reason for not levying penalty u/s 221(1). The lists of such judgments are as under :- 1. Addnl. CIT vs. Free Wheels....