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2014 (2) TMI 126 - HC - Income TaxAssessee in default - Deletion of Penalty u/s 221 of the Act - Non-deduction of tax on returned income – Interest u/s 234B and 234C of the Act- Default u/s 140A(3) of the Act – Advance tax - Held that:- Wherever there is default in deposit of the tax, the assessee in addition to the amount of arrears and the amount of interest payable under section 220, is liable for penalty which shall not exceed the amount of tax in arrears - The tax, penalty and interest are different concepts under the Act - The definition of 'tax' under Section 2(43) of the Act does not include penalty or interest – Relying upon Shreeniwas & Sons v. I.T.O. [1974 (1) TMI 8 - CALCUTTA High Court] - interest cannot be held to be 'additional tax'. Unless the assessee is or is deemed to be in default in making a payment of "tax", as defined in section 2(43) of the Act, which means that he is in default or in deemed default in payment of income-tax chargeable under the provisions of the Act or super-tax chargeable under the provisions of the Act, depending upon the assessment year in question, there could be no levy of penalty under section 221(1) - Advance tax would fall within the ambit of tax - The position here is different as it relates to interest and not advance tax and, therefore, no benefit can be derived by the revenue – Decided against Revenue.
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