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2020 (10) TMI 410 - AT - Income TaxPenalty imposed u/s. 221 r.w.s. 140A(3) - self assessment tax was not paid - assessee was requested to pay tax dues but no response from the assessee - assessee raised a ground that due to financial liquidity crisis the assessee could not pay taxes - HELD THAT:- CIT-A examined the financial position of assessee as on the due dates of installments of payments of advance tax and also on due date for filing of return of income, wherein we note that the assessee had sufficient balance amount in its accounts to discharge the tax liability as on the due dates of installments in terms of section 211 of the Act. Therefore, we completely agree with the reasons recorded by the CIT(A) in its order that the assessee had sufficient funds to discharge its liability. Whether provision u/s. 273B of the Act is applicable to the assessee or not? - reasonable cause as defined u/s. 273B in our opinion is not applicable to the penalty imposable u/s. 221 of the Act. The term advance tax refers to paying a part of taxes before the end of the financial year. It should be paid in the year in which the income is received. Assessee paid ₹ 11,21,000/- on two dates 13-03-2015 and 16-03-2015 i.e. after passing of penalty order on 03-03-2015 and an amount of ₹ 35,00,000/- on 16-01-2017 i.e. just before passing impugned order on 23-02-2017. We agree with the submission of Shri Alok Malviya that the assessee shall not cease to be liable to any penalty under sub-section (1) of section 221 merely by reason of the fact that the assessee paid tax, but however taking into consideration the facts of circumstances, it is fair and just to restrict the penalty to ₹ 66,134/- being 1% of ₹ 66,13,420/- and we confirm the penalty to an amount of ₹ 66,134/- and the order of CIT(A) is modified accordingly. Thus, grounds raised by the assessee are partly allowed.
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