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2017 (2) TMI 26 - AT - Income TaxQuantum of penalty u/s 221(1) - CIT(A) reducing the quantum of penalty u/s 221(1) from 100% to 10% - AO concluded that assessee failed to pay demand before filing of return without reasonable cause - Held that:- As noticed that there is no minimum penalty prescribed under the law on making the default in depositing the admitted tax, the AO levied the maximum penalty prescribed. The AO has not recorded his satisfaction as to why the maximum penalty of 100% of tax in arrear was levied. The AO further not recorded as to how much amount on account of arrears of tax was due on the date of passing of the order of penalty. CIT(A) observed that assessee has promised to pay outstanding self-assessment tax by 31.12.2012 and paid most of the amount by that date. Though, the assessee has not completed his entire liability by 31.12.2012, however, completed by 15.01.2013, therefore, the observations of AO that the assessee has not fulfilled his obligation to pay tax is not correct. The assessee has paid till 31.12.2012 an amount of ₹ 3,77,00,000/- and remaining balance of ₹ 47,76,310/- was paid on 15.01.2013. The ld. CIT(A) also considered the financial constraint of the assessee and observed that the contentions of the assessee that non-deposit of admitted tax liability due to the delay in receipt of payment from MCGM appears to be correct and the assessee tried his best effort to wipe out the tax liability. CIT(A) considered the totality of the fact and the case history related to the earlier years for AY 2010-11 and 2011-12 observed that such penalty was levied for those years and restricted the penalty to 10% of the total tax payable.
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