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2014 (12) TMI 855 - HC - Income TaxRestriction of penalty imposed u/s 140A(3) to 25% - Held that:- Assessee has earned substantial income in the year but he did not pay the due tax within the stipulated time after service of demand notice - assessee paid the admitted tax by 28.04.2011 before the issuance of the show cause notice by the AO on 22.11.2011 - it is a case of ‘proportionality’ - the assessee paid advance tax of ₹ 14,00,000/- after the return was processed u/s 143(1) of the Act, the intimation was sent to the assessee on 01.02.2011 calling upon him to make payment by 01.02.2011 - The assessee deposited the tax due by April 28, 2011, which is much before the date of issuance of notice u/s 140A(3) of the Act by the AO i.e. November 22, 2011 - when the authorities were justified in restricting the penalty to 25% based on cogent material and finding, more so when it is discretionary as the same is clearly rendered u/s 221 - the discretion so exercised is within the mandate of law and based on good, valid and cogent ground – the order of the Tribunal is upheld. Revenue perhaps harbours the belief that maximum penalty must be imposed in all cases, which is not the legislative mandate. – decided against revenue.
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