TMI Blog2005 (9) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... deliberateness on the part of the assessee in committing the breach of the relevant provision(s) of law, i.e., it is guilty of a conduct contumacious or a conscious disregard to its obligation under the law. In the present case the default arose on account of the admitted situation of the assessee being placed under acute financial constraint(s). There is no evidence of the assessee s request (for allowing time) being motivated by extraneous reasons; the same, as remarked earlier, having not been examined on merits, would have to be taken as warranted by its circumstances. Secondly, it places a schedule of payment of the admitted tax before the authorities, which it observes; which only suggests an honest attempt on its part to liquidate it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 221(1) of the Income-tax Act, 1961 (Act hereinafter) at Rs. 10,00,000 as under : 1.The ld. CIT(A) has erred in law and facts in deleting the penalty of Rs. 10,00,000 levied under section 221(1) of the Act. 4. The facts in brief are that the return in the instant case was furnished under section 158BC of the Act on 11-3-1996 declaring an undisclosed income of Rs. 2,84,28,437 resulting in self-assessment tax of Rs. 1,96,15,621, which stood unpaid. Block assessment was completed on 30-11-1996 at an undisclosed income of Rs. 3,28,48,900. Notice under section 221(1) of the Act was issued on 12-7-1996 requiring the assessee as to why penalty under the said section be not levied for the default in payment of self assessment tax in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised before the ld. CIT(A), who, though in agreement with the Assessing Officer with regard to the applicability of the provisions of section 140A to a return filed under section 158BC (in view of section 158BH of the Act), differed from him on the question of levy of penalty, as in his view : ( a ) no new show cause notice, i.e., after the initial one dated 12-7-1996, consequent to the filing of the revised return by the assessee on 21-11-1996, stood issued; the self-assessment tax liability (after adjustment of the seized cash of Rs. 1.90 lakhs) having reduced to Rs. 1,77,24,464 (from Rs. 1,94,25,621); ( b ) the conduct of the assessee revealed its bona fide intention inasmuch as it paid the tax in terms of its agreement with the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial on record. We find force in the arguments of the ld. DR inasmuch as no prejudice has been caused to the assessee by the non-issue of a fresh show cause notice; its admitted self-assessment tax liability having only scaled down a few notches i.e., from Rs. 194.25 lakhs to Rs. 177.25 lakhs as a result of the revised return, so that its case of the attendant accentuating circumstances that prevented it from making the payment in one go, remain the same. Also, we find the second contention of the ld. DR to be correct on facts inasmuch as there was no such agreement between the assessee and the Assessing Officer, and which, nevertheless would still render the assessee as in default. However, we, for the reasons stated hereunder are not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Government being entitled to compensation in view of the delayed payment, is misplaced, as the statute has a separate provision for interest (on the assessee being in default) [section 220(2)], and which is applicable independent of the penalty proceedings, and meant only for the purpose of the said compensation. Rather, the same too has a waiver clause [Section 220(2A)], for application, on the assessee showing a case of genuine hardship and an attitude of co-operation. The law in the matter of penalty stands expounded by the Hon ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 and, for the reasons aforementioned, we find the present case as one which stands qualified for the saving from penal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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