2009 (9) TMI 9

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....framed in the memo of appeal:- "WHETHER on the facts and in the circumstances of the case, the ITAT was legally justified in upholding deletion of the penalty of Rs.4,21,230/- by the CIT(A) imposed under section 273(2)(aa) of the Income Tax Act,1961 by the A.O. whereas the assessee has furnished wrong estimate of advance tax knowing fully well that the same was wrong and reason to believe to be untrue, since the sales tax liability is an income of the assessee as, the same is liable to be deductible in computing against the taxable income." 2. The present appeal relates to the assessment year1987-88. 3. The background facts in nut shell essentially are as follows: 4. The appellant was following accounting period as the June endi....

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.... order of the CIT (appeals) which was dismissed by the Tribunal and the order passed by CIT (Appeals) was upheld. Hence the present appeal. 7. It is submitted by learned counsel for the Revenue that the Tribunal has erred in law in deleting the penalty of Rs.4,31,230/- imposed under section 273(2)(aa) of the Act, and further contended that the assessee furnished estimate of advance tax which he knew and had reason to believe to be untrue as it was well within his knowledge that sales tax liability is income of the assessee and the same is not liable to be deducted in computing the taxable income. 8. On the other hand learned counsel for the respondent- assessee has supported the impugned order and has submitted that the assessee is no....

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....nstalments. 12. On this point, it may be noted that the assessment for the assessment year 1984-85 was completed for the first time on 31-12-2007 by which time the last date for payment of advance tax for the assessment year in question viz 31-12-1986 had already expired. Therefore, the question of treatment of sales tax liability by the department being in the knowledge of the appellant by the time last instalment of advance tax was paid does not arise. On the contrary, the counsel for the assessee has pleaded that there was a judgment delivered by the Tribunal in the case of Sri S.Govindrajan Raddiar Vs. ITO, ITAT, Cochin Bench, reported in 19 ITD 177 wherein it was held that Sales tax liability could not be disallowed under section 43....