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2015 (8) TMI 603 - ITAT HYDERABADPenalty under section 221(1) read with section 140A(3) - assessee companies had not paid either any advance tax or even self assessment tax before filing their returns of income nor even after issue of intimations under section 143(1) resulting into raising of demand - Held that:- Similar penalties imposed by the Assessing Officer and confirmed by the learned CIT(A) in the cases of other group companies [2014 (12) TMI 431 - ITAT HYDERABAD] involving materially the same facts have been sustained by the Tribunal to the extent of 5% of the admitted tax liability as concluding that on perusal of the penalty here 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 case of continuing default. Therefore, imposition of penalty at such a high figure at the first instance, in our view, is not justified. 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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