TMI Blog2007 (7) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... of the learned Commissioner of Income-tax (Appeals), the assessee is in appeal before us taking the following common grounds of appeal: "1. The order of the Commissioner of Income-tax (Appeals)-II, Hyderabad, dated April 4, 2002, in so far as confirming the penalty levied under section 158BFA(2) of the Act by the Addl. Commissioner of Income-tax (Asstts.) Special Range-1, Hyderabad, is erroneous, contrary to law and facts of the case. 2. (a) The Commissioner of Income-tax (Appeals) erred in law in confirming the penalty of Rs. 9,00,000 levied under section 158BFA(2) of the Act by the Assessing Officer. (b) The Commissioner of Income-tax (Appeals) ought to have seen that the appellant could not pay the tax and file the challan along with the return only because of insufficient funds as she is only a house wife deriving income from other sources i.e., dividend income which is not sufficient to meet the payment of tax. (c) The Commissioner of Income-tax (Appeals) ought to have appreciated that the appellant had in fact sold the jewellery and paid the tax and therefore levy of penalty for not paying the tax along with the return of income will put the appellant to genuine and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also placed on the following decisions: (a) Ramachandra Pesticides P. Ltd. v. CIT [2006] 285 ITR 45 (Karn); (b) Nemichand v. Asst. CIT [2005] 93 TTJ 564 (Bang); (c) Smt. Mala Dayanithi v. Deputy CIT [2004] 270 ITR 56 (AT); 91 ITD 46 (Bang); (d) Deputy CIT v. Suresh Kumar [2006] 284 ITR (AT) 104 (Cal); and (e) Dhiraj Suri v. Addl. CIT [2006] 98 ITD 187 (Delhi). As regards the evidence of tax paid to be furnished along with return, he submits that furnishing of challan in proof of payment of tax is not mandatory and it is just like non-furnishing of audit report along with return under sections 32AB, 80HH, 80-I, 80HHC etc., and in support the reliance was also placed on the following cases: (i) CIT v. Hemsons Industries [2001] 251 ITR 693 (AP); (ii) CIT v. G. Krishnan Nair [2003] 259 ITR 727 (Ker); (iii) CIT v. Berger Paints (India) Ltd. [2002] 254 ITR 503 (Cal); (iv) ITO v. Smt. Mandira D. Vakharia [2001] 250 ITR 432 (Karn); (v) CIT v. Trehan Enterprises [2001] 248 ITR 333 (J K); (vi) CIT v. Panama Chemical Works [2000] 245 ITR 684 (MP); (vii) Murali Export House v. CIT [1999] 238 ITR 257 (Cal); (viii) Deputy CIT v. B.V. Aswathiah and Brothers [2001] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in excess of the income shown in the return and in such cases the penalty shall be imposed on that portion of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return. (3) No order imposing a penalty under sub-section (2) shall be made,- (a) unless an assessee has been given a reasonable opportunity of being heard;..." A bare reading of the above provisions of the Act shows that section 158BFA(2) authorises the Assessing Officer and also the Commissioner of Income-tax (Appeals) that in the course of any proceedings under this Chapter, i.e., Chapter XIV-B, he may direct that a person shall pay by way of penalty. It further says that provided no order imposing penalty shall be made in respect of a person if he furnishes a return under clause (a) of section 158BC, pays tax on the basis of such return or offers the money so seized to be adjusted against the tax payable on the basis of such return, adduce evidence along with return of tax payment and an appeal is not filed against the assessment of that part of income which is shown in the return. The circumstances stated in clauses (i) to (iv) in the above proviso of section 158BF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by their Lordships that the Tribunal having held that the assessee had reasonable cause for not paying the tax within the time prescribed, and the finding having been accepted by the Revenue, it had the discretion to waive the penalty and the levy of penalty was not justified. In Nemichand v. Asst. CIT [2005] 93 TTJ 564 (Bang) the Tribunal while deleting the penalty imposed under section 158BFA(2) held at page 572 "...that the Assessing Officer has miserably failed in not exercising the discretion in favour of the assessee considering the fact that the assessee has just delayed the filing of the return by a fortnight. The conscience of the Assessing Officer should have tilted in favour of the assessee who has co-operated with the Department in getting the undisclosed income assessed to tax at a higher rate of taxation, than under the normal Finance Act. Instead, the Assessing Officer used the discretion against the assessee in imposing the penalty, which according to us, is unreasonable and as we have already explained, even on merits, the penalty is not sustainable." In Smt. Mala Dayanithi v. Deputy CIT [2004] 270 ITR (AT) 56; [2004] 91 ITD 46 (Bang) it has been observed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings such other relevant factors." In the case before us, i.e., in Smt. Biraj Kavar Galada there is no dispute that the assessee has filed her return for the block period on April 7, 1999, disclosing undisclosed income of Rs. 15 lakhs. It is also not in dispute that the Assessing Officer has also assessed the same at an undisclosed income of Rs. 15 lakhs vide order dated January 30, 2001 passed under section 158BD read with section 143(3) of the Act creating a demand of tax of Rs. 9 lakhs plus interest at Rs. 54,000 totalling to Rs. 9,54,000 and after allowing the credit of tax paid Rs. 4,50,000 on January 13, 2000 and Rs. 3,56,461 on January 14, 2001, aggregating to Rs. 8,06,461 the balance demand payable was worked out at Rs. 1,47,539. As regards the delay in making the payment of tax, it was contended by learned counsel the time was allowed by the Assessing Officer. However, in the absence of any material to show that the time was allowed by the Assessing Officer, the plea taken by learned counsel for the assessee is devoid of any merit and accordingly rejected. It was further contended by learned counsel for the assessee that the assessee being a housewife ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x on the income returned by the assessee. It merely says that "the tax payable on the basis of such return has been paid". It does not mean that the tax should be paid prior to furnishing of the return. Since the assessee has paid admitted tax prior to the date of the assessment as mentioned by the Assessing Officer in the impugned assessment order, we are of the view that there is no default on the part of the assessee. As regards the plea of the learned Departmental representative that the evidence of tax paid is not furnished along with the return, we find that the Assessing Officer while observing that the assessee has not satisfied the conditions under clauses (ii) and (iii) of the proviso to section 158BFA(2) of the Act has clarified vide paragraph 5 of the impugned penalty order that "....In other words the tax payable on the basis of the return filed by the assessee has not been paid..." From the reading of the above we are of the view that finally the Assessing Officer has not invoked the provision of clause (iii) of the first proviso to section 158BFA(2) of the Act. Apart from this we find that under section 158BC there is no such requirement to furnish evidence of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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