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2016 (5) TMI 1031 - AT - Income TaxLevy of penalty u/s.221(1) - default of non-payment of self-assessment tax - Held that:- Reading of Sec.221 of the Act shows that the Explanation wherein as “may” not “shall” which is subjective of the fact that imposition of penalty is neither automatic nor mandatory. The discretion is left with the A.O to decide whether to impose penalty or not, by considering the explanation of the assessee. This fact is evident from the provisions of section itself that mandatory opportunity of being heard has to be given to the assessee before imposition of penalty. Thereafter, the A.O considering the explanation of assessee have discretion to impose penalty. As seen from the discussion in earlier para, assessee explained the reasons. In our opinion, there exists good and sufficient reason not levy penalty. The AO was not going by any of the explanation given by the assessee with non-speaking order to impose penalty at 10% of self-assessment tax including interest. The Ld. CIT(A) enhanced it to 25% of that one. The action of both the Authorities is not appropriate. Since the assessee show cause for delay in payment of self-assessment tax, accordingly, we delete the penalty u/s.221(1) of the Act. - Decided in favour of assessee
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