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2014 (11) TMI 6 - AT - Income TaxLevy of penalty u/s 221 r.w. Section 140A(3) – Held that:- The assessee is liable to pay the admitted tax for AY 2012-13 as per the return filed by the assessee - The assessee failed to pay this amount even after giving notice to the assessee vide notice dated 01-11-2012 served upon the assessee on 02-11-2012 wherein the AO asked the assessee to pay the admitted tax with three days from the receipt of the notice - assessee is not able to point out any reasonable cause for not depositing the admitted tax with the Government - in the case of the assessee, the tax and interest is payable not in consonance with any order or assessment order or any other order under this Act by the Assessing officer - the amount of tax and interest is payable on the basis of the return filed by the assessee itself under the provisions of the Act which is payable by virtue of precedence of "self assessment" u/s. 140A(3) of the Act - The assessee having failed to pay the amount of tax on the basis of the return furnished by it for the relevant assessment year in accordance with the provisions of s. 140A(1) is "deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid" as per the statutory provision of s. 140A(3). The provision of s. 140A(3) further provides that in case the assessee is deemed to be in default, all the provisions of this Act shall apply to the case of the assessee. The provisions of s. 221 providing for penalty payable when tax is in default applies to both the situations, i.e., when assessee is in default in respect of the assessed tax or is deemed to be in default in making the payment of tax under "self-assessment tax" as per the return of income filed by the assessee - "Self-assessment tax" has to be calculated on the basis of the return filed by the assessee for the relevant assessment year and paid to the credit of the Government suo moto before furnishing the return of income and the return of income shall be accompanied by proof of payment of such tax and interest as per the statutory provisions of s. 140A(1) and there is no requirement of issue of notice of demand u/s. 156 by the Assessing officer for making such payment of tax and interest of the "self-assessment tax" before furnishing the return of income by the assessee - the penalty u/s. 221 was rightly levied on the assessee. Assessee argues that he cannot be considered as deemed to be in default and being so, the assessee cannot be fastened with the liability of penalty on the ground that there is provisions of sections 234A, 234B and 234C to take care of the loss to the Revenue - The argument of the assessee is devoid of merits as sec. 140A(3) is to be read with sec. 221 which empowers the AO to levy penalty when there is a failure on the part of the assessee to make the payment of self-assessment tax and interest as stipulated in section 140A(1) - The provision of section 221 is penal in nature - on the other hand provision of section 23A, 23B and 234C are compensatory in nature – the order of the CIT(A) is upheld and the order of levy of penalty u/s. 221 r.w.s. 140A(3) is upheld – Decided against assessee.
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