TMI Blog1994 (2) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee paid the self-assessment tax on the basis of the return only on12-9-1987. Assessing Officer issued a notice to the assessee as to why penalty under section 140A(3) may not be imposed for non-payment of tax on the basis of the return as per section 140A. Assessee furnished written reply, which is reproduced hereunder: "(1) There is no default in terms of section 140A(1) (3) because the assessee did not have the requisite funds which were remitted toIndiaon11-9-1987. (2) The levy of penalty is not automatic and an opportunity of being heard should be granted. (3) As theCo.was not is possession of funds on31-7-1987and the remittance was made only on9-9-1987the payment could not have been made before10-9-1987. The assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty under section 140A(3) was not justified, to delete the penalty. 5. The revenue is aggrieved. According to the learned DR it is not disputed that the assessee had filed the return of income on which there was obligation to pay self-assessment tax. Since, the money was available with the assessee inLondon, its failure to make the remittances intoIndiacould not constitute a reasonable cause for the purposes of levy of penalty under section 140A. The assessee had admitted the entire consultancy income originally in its return of income for the assessment year 1987-88 filed on 31st of July, 1987. On18-3-1988the assessee allegedly wrote to the CIT,Delhi- I that the entire consultancy income be spread over to these years granting ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been modified to the extent that income on account of consultancy fee has been held to be assessable in assessment year 1988-89. As a result of the order of the Tribunal, the income assessed for assessment year 1987-88, i.e., year under appeal has been assessed at a loss of Rs. 12,83,236. 8. On the facts stated above, the learned counsel contended that ultimately no tax has been found payable by the assessee for assessment year 1987-88. That being so, the penalty under section 140A(3) is clearly not warranted on the facts and in the circumstances of this case. 9. Supporting the order of the CIT(A), the learned counsel further contended that the facts found by the learned CIT(A) have not been controverted by any evidence. The contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence on record the assessee has established scarcity of the funds. It has to be noted that the tax on the basis of the return was payable on the income which had been earned by the assessee by means of consultancy charges inEngland. The said fee had not been received inIndiatill 9th of September, 1987 and, accordingly, the reason for non-payment of self-assessment tax is bona fide and the CIT(A) was justified in cancelling the penalty. 11. Even otherwise, one cannot lose sight of the fact that on the basis of the decision of the Tribunal - ITA Nos. 1950 to 1952/Delhi/1990 the finally assessed income in the case of the assessee is a negative figure on which no tax has been found payable for the year under appeal. 12. Penalty, in this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) reveals that every assessee is under an obligation to file the return of income if his total income or the total income of any other person in respect of which he is assessable under the Act during the previous year exceeded the maximum amount, which is not chargeable to income-tax. In other words, the obligation to file the return voluntarily under section 139(1) arises only when the total assessable income exceeds the maximum amount, which is not chargeable to tax unless notice under section 139(2) or under section 148 is issued calling for the returns. In the present appeal, it is nobody's case that any notice had been issued to the assessee under section 148 or under section 139(2) demanding a return from the assessee. Admittedly, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including the cost of packing material in the taxable turnover. The Assessing Officer on making the assessment held that the packing material was includible in the taxable turnover of the assessee. Assessee filed appeals and ultimately, the matter reached up to the Supreme Court. The Supreme Court decided the issue in favour of the revenue by holding that the packing material was includible in the taxable turnover of the assessee. The matter was remitted to the Assessing Officer for making the assessments, accordingly. The Assessing Officer made fresh assessments on directions of the Supreme Court and also imposed interest for assessee's failure to pay the full tax on the basis of the return. The assessee contested the levy of interest on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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