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2017 (5) TMI 1155 - ITAT DELHIImposition of penalty under Section 140A(3) - applicability of provision of section 221 - sufficient reason for non-payment of admitted tax - Held that:- Before levy of the penalty, the assessee has been communicated exact nature of contravention, for which the assessee was liable, for penalty under section 221. We find that the Assessing Officer has mentioned all the allegations and charges against the assessee in clear terms in the show cause notice and the assessee has also duly responded to those charges. The assessee in its submission also referred to the relevant section for levy of penalty as 140A(3) of the Act. In the circumstances, respectfully following the judgment in the case of Sh. PK Palanisamy (2009 (7) TMI 1311 - SUPREME COURT), we find that the proceeding of the Assessing Officer in the impugned order, in substance and effect in conformity with provisions of section 221 of the Act and thus, proceedings in question of the Assessing Officer cannot be held as invalid. - Decided against assessee Limitation for levy of penalty falling under the chapter XXI “penalties imposable” under the Income Tax Act has been specified in section 275 of the Act. As far as penalty under section 221 of the Act is concerned, the limitation has not been provided, however it should be levied within a reasonable period of time. We find that the penalty has been levied even before the completion of the assessment and thus in our opinion it has been levied well within a reasonable period. Whether the assessee was not having any liquidity problem for making payment of tax under section 140A - Held that:- From the order of the lower authorities, we find that the assessee did not file the documentary evidence in support of contention of liquidity crunch, however, before us, the assessee has sought one more opportunity for discharging its onus of showing “good and sufficient cause” for not making the payment of admitted tax liability. We are of the opinion that in the interest of natural justice, the assessee should be allowed one more opportunity to discharge his onus in terms of second proviso to section 221 of the Act. Accordingly, we restore the issue of levy of penalty for nonpayment of admitted taxability to the file of the Assessing Officer for deciding afresh after allowing a reasonable opportunity of hearing to the assessee. - Appeal partly in favour of assessee for statistical purpose.
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