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2015 (1) TMI 14 - HC - Income TaxDeletion of penalty u/s 140A(3) r.w. Section 221 failure to pay advance tax - Whether the Tribunal was justified in analyzing the accounts of the assessee as on 31st December 2006 and coming to the conclusion that the assessee had incurred huge losses despite the fact that as per provisions of I.T Act, the assessee was liable to pay advance tax or otherwise by 31st March 2006 Held that:- The Tribunal found that the facts on record indicated that although the assessee had earned profit in the FY 2005-06, by the time he was required to file the return of income, he had suffered heavy losses to the tune of ₹ 1,36,46,928/- in share trading and the entire profit had been washed away. Consequently, the assessee had only ₹ 47,873/- by way of cash on hand and the balance in the bank account was only to the tune of ₹ 8,848/- and that the assessee did not have any liquid funds to make payment of the selfassessment tax - the revenue itself had granted installments to the assessee, who had subsequently paid up the amount - when there was a good and sufficient reason for the default, no penalty ought to have been levied, more particularly, when the assessee had later on deposited the entire amount. The assessee on account of having incurred heavy losses in share trading was not in a position to make payment of self-assessment tax at the relevant time and the revenue itself had granted installments to the assessee - considering the difficulties faced by the assessee, the revenue itself had thought it fit to grant installments to the assessee, and the fact that pursuant thereto the assessee had deposited the entire amount of self-assessment tax, the Tribunal was right in holding that there was good and sufficient reason for default on the part of the assessee and invoking the second provision of subsection (1) of section 221 of the Act and holding that no penalty ought to have been levied under the section thus, the order of the Tribunal is upheld Decided against revenue.
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