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2005 (9) TMI 515 - ITAT AHMEDABADPenalty levied u/s 221(1) - Collection and recovery of tax - HELD THAT:- In the absence of any finding to the contrary by either of the lower authorities, we have no reason to dis-believe the same. Penal provisions are quasi-criminal in character, and notwithstanding the applicability (of the relevant provision) on satisfaction of the definite parameter(s) as laid down for example, non-payment of self-assessment tax as in the instant case, can be invoked, only where there is an element of deliberateness on the part of the assessee in committing the breach of the relevant provision(s) of law, i.e., it is guilty of a conduct contumacious or a conscious disregard to its obligation under the law. In the present case the default arose on account of the admitted situation of the assessee being placed under acute financial constraint(s). There is no evidence of the assessee’s request (for allowing time) being motivated by extraneous reasons; the same, as remarked earlier, having not been examined on merits, would have to be taken as warranted by its circumstances. Secondly, it places a schedule of payment of the admitted tax before the authorities, which it observes; which only suggests an honest attempt on its part to liquidate its tax liability, leading to an inference of a bona fide conduct. The Assessing Officer’s ground of the Government being entitled to compensation in view of the delayed payment, is misplaced, as the statute has a separate provision for interest (on the assessee being in default) [section 220(2)], and which is applicable independent of the penalty proceedings, and meant only for the purpose of the said compensation. Rather, the same too has a waiver clause [Section 220(2A)], for application, on the assessee showing a case of genuine hardship and an attitude of co-operation. The law in the matter of penalty stands expounded by the Hon’ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1969 (8) TMI 31 - SUPREME COURT] and, for the reasons aforementioned, we find the present case as one which stands qualified for the saving from penalty in view of the said law; the default in the compliance of the relevant provision notwithstanding. In result, the Revenue’s appeal is dismissed.
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