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2015 (6) TMI 322 - AT - Income TaxPenalty u/s 140A(3) - non payment of self assessment tax which was shown as payable in the return of income filed - CIT(A) deleted the penalty levy - Held that:- No penalty notice was issued to the assessee u/s 221 of the Act and the penalty order was also not passed u/s 221 of the Act and there is no penalty provision u/s 140A of the Act and the AO misunderstood the relevant provision of the Act while issuing notice and imposing penalty against the assessee. Consequently the assessee was also not provided due opportunity of hearing prior to imposing penalty u/s 221 of the Act as required by first proviso to section 221(1) of the Act and at the same time the assessee was also denied opportunity of hearing to discharge its onus and to show “good and sufficient cause” for non payment of tax at the time of filing of return as required second proviso to section 221(1) of the Act to avoid penalty, which is also a clear violation of the mandatory provisions of the Act by the AO and thus, penalty order cannot be held as in accordance with law and sustainable and the first appellate authority i.e. CIT(A) was quite justified and correct in demolishing the same. In view of the observations of the Hon’ble High Court of Delhi in the judgment dated 12.8.2013 in assessee’s own case (2015 (6) TMI 308 - DELHI HIGH COURT), we are also in agreement with the conclusion of the CIT(A) that the assessee was facing financial constrain and acute liquidity crunch and there was a “good and sufficient cause” for the assessee for non payment of tax which was incorrectly rejected by the AO while wrongly imposing penalty u/s 140A(3) of the Act. We are unable to see any infirmity, perversity or any other valid reason to interfere with the impugned order of the CIT(A) which deleted the penalty and thus, we uphold the same. - Decided in favour of assessee.
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