Case Law Details
Heddle Knowledge (P.) Ltd. Vs. Income Tax Officer (ITAT Mumbai)
The fact that the amended Sec. 140A(3) w.e.f. 01.04.1989 does not envisage any penalty for non-payment of self-assessment tax, the Assessing Officer was not justified in levying the impugned penalty by making recourse to Sec. 221(1) of the Act. Before parting, we may again emphasize that Sec. 221 of the Act remains unchanged, both during the pre and post amended Sec. 140A(3) of the Act and even in the pre- amended situation, penalty u/s 221 of the Act was not attracted for default in payment of self-assessment tax, which was expressly covered in pre 01.04.1989 prevailing Sec. 140A(3). Thus, without there being any requisite corresponding amendment to Sec. 221 of the Act in consonance with the amendments carried out in Sec. 140A(3) of the Act w.e.f. 01.04.1989, the Assessing Officer erred in levying the impugned penalty. Thus, on this aspect, we hereby set-aside the order of CIT(A) and direct the Assessing Officer to
G.S. Pannu, Accountant Member – The captioned appeal by the assessee is directed against the order of CIT(A)-16, Mumbai dated 16.09.2011, pertaining to the Assessment Year 2009-10, which in turn has arisen from the order dated 08.03.2010 passed by the Assessing Officer, Mumbai under section 221(1) r.w.s. 140A(3) of the Income Tax Act, 1961 (in short ‘the Act’).
2. In this appeal, the solitary dispute is with regard to the penalty imposed u/s 221(1) r.w.s. 140A(3) of the Act of Rs. 25,98,646/-. In brief, the relevant facts are that the appellant- assessee filed a return of income for Assessment Year 2009-10 on 30.09.2009 declaring an income of Rs. 9,93,58,270/-, which was not accompanied by self-assessment tax payable at Rs. 2,59,89,461/-. The Assessing Officer issued a communication to the assessee dated 18.01.2010 requiring the assessee to produce the proof of payment of self-assessment tax along with the interest thereon. In response, assessee vide letter dated 08.02.2010 sought more time to clear the liability of payment of self-assessment tax. Subsequently, on 11.02.2010, the Assessing Officer show-caused the assessee as to why the penalty u/s 221 r.w.s. 140A(3) of the Act should not be imposed for the failure of the assessee to pay the self-assessment tax within the stipulated time. The orders of the authorities below reveal that the defence of the assessee was primarily the plea of financial stringency and also the fact that the tax was ultimately deposited on 02.03.2010 before the penalty was imposed by the Assessing Officer vide order dated 08.03.2010. The Assessing Officer as well as the CIT(A) did not find the reasons advanced by the assessee to be satisfactory to mitigate the levy of penalty. As per the Assessing Officer, the provisions of Sec. 140A(3) r.w.s 221 of the Act did not provide any discretion to the Assessing Officer not to levy the penalty. Considering that the assessee had defaulted in payment of self-assessment tax within the stipulated period and was thus liable to be treated as “assessee in default” as per the provisions of Sec.140A(3) r.w.s. 221(1) of the Act, he imposed the penalty @ 10% of the delayed self-assessment tax of Rs. 2,59,89,461/-, thereby resulting in a penalty of Rs. 25,98,946/-. The said penalty has further been affirmed by the CIT(A) also.
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