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2016 (5) TMI 1169 - ITAT AMRITSARPenalty levied u/s 221(1) - delay in payment of self assessment tax u/s 140A - Held that:- From the analysis of provisions of section 140A(1), we find that the section requires that assessee is liable to pay taxes on the total income on the basis of any return u/s 139 after reducing the advance taxes and tax deducted at source, if any and such return shall be accompanied with the proof of payment of such taxes and interest. Sub-section 3 of section 140A requires that if an assessee fails to pay whole or any part of any such tax or interest the assessee shall be deemed to be an assessee in default and therefore, the provisions of Act shall apply accordingly. It is apparent from the above that section 140 (A)(1) of the Act applies in respect of return required to be furnished u/s 139 of the Act. The return in this case was required to be furnished u/s 139 of the Act by 31st January, 2011. The entire tax was paid by 1.12.2010 which is much prior to the due date of filing of return which happened to be 31/01/2011 and if the entire tax has been paid before the filing of due date of return there can not be said to be default u/s 140A(1) of the Act. The only default committed by assessee is that it had filed its return of income on 30.09.2010 and by the date of filing of return the taxes were not paid but the fact remains the due date of filing of return was extended to 31st January, 2011 and, therefore, technically the assessee was entitled to pay taxes before the due date of filing of return which happened to be 31st January, 2011. The entire taxes has been paid by 1st December, 2010 and therefore, the breach is merely a technical breach and for which no penalty should have been levied. Moreover, the assessee has paid interest as applicable under the provisions of Act. Therefore, keeping in view the entire facts and circumstances and specifically the fact that assessee belonged to disturbed area of Jammu & Kashmir, the penalty in this case was not impossible - Decided in favour of assessee.
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