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2010 (1) TMI 667 - ITAT, CHANDIGARHPenalty u/s 221(1) of the Act - Provisions of the Act entail a reasonable opportunity being given to the assessee before levying the penalty u/s 221(1) of the Act - The assessee had pleaded that 42 per cent of the demand was paid and regarding the balance, the hearing of the appeal had concluded and the Commissioner (Appeals) had asked for remand report - The assessee was confident that majority of demands would be reduced pursuant to appeal effect and reduction in taxes - In the circumstances, there was justification in the plea of the assessee for the stay of recovery of balance demand - find merit in the plea of the assessee that in all such cases where the assessee proves to the satisfaction of Assessing Officer that the default, if any, was for good and sufficient reason, no penalty is leviable under the section - The Jt. CIT, Kurukshetra had granted the instalments to the assessee to pay the demand on 16-3-2009 and 25-3-2009. The assessee thus could not be held to be in default on 16-3-2009 i.e., the date on which the instalments were granted by the Jt. CIT - Thereafter, the assessee had filed an application for further stay of the demand as it was under the bona fide belief that it is entitled to substantial relief before the CIT (Appeals) where the appeal of the assessee was being adjudicated Find no justification in the order of the Assessing Officer holding the assessee to be in default under section 221(1) of the Act vide order dated 18-3-2009 - The ground of appeal raised by the Revenue to the extent of application of Explanation to section 221(1) of the Act is misconceived - Decided in favour of assessee.
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