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2015 (6) TMI 559 - ITAT HYDERABADPenalty under section 221(1) read with section 140A(3) - default in payment of the tax demand - Held that:- The common issue involved in the present appeals thus is squarely covered by the order of the Tribunal in other group companies involving materially the same facts (2014 (12) TMI 431 - ITAT HYDERABAD) and this position is not disputed even by the learned representatives of both the sides. We therefore respectfully follow the said order of the Tribunal wherein held perusal of the penalty order does not reveal the basis on which AO has quantified the penalty. However, considering the fact that assessee has discharged the tax liability along with interest, in our view, liberal approach needs to be taken. More so, when section 221(1) itself empowers AO to increase penalty in case of continuing default. Therefore, imposition of penalty at such a high figure at the first instance, in our view, is not justified. Considering the facts and circumstances of case, we are of the view that penalty @ 5% of the admitted tax liability would be reasonable and meet the ends of justice. Accordingly, we direct AO to confine the penalty u/s 221(1) of the Act to 5% of the admitted tax liability in each case - Decided partly in favour of assessee.
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