TMI Blog2014 (5) TMI 927X X X X Extracts X X X X X X X X Extracts X X X X ..... ny reasonable cause has been shown nor substantiated and CIT(A) appears to have given relief of 75% of the amount of penalty imposed by the AO while taking a very lenient view – the relief already granted by CIT(A) is sufficient – Decided against Assessee. - I.T.A. No. 5833 /Del/2012, I.T.A. No. 5854/Del/2012 - - - Dated:- 31-3-2014 - SHRI U. B. S. BEDI AND SHRI T. S. KAPOOR, JJ. For the Appellant : Shri Rajnish Sharma, C.A. For the Respondent : Shri Keyur Patel, Sr. DR JUDGEMENT Per: U B S Bedi: These cross appeals one by the assessee and the other by the Department are directed against the order passed by Ld. CIT(A)-XXXI, New Delhi dated 31.08.2012 relevant to assessment year 2009-10 whereby the assessee has challenged restricting of penalty imposed u/s 140A(3) at 25% from 100% imposed by the A.O. and Department is in appeal for the relief given by Ld. CIT(A) to the extent of 75% of the penalty imposed u/s 140A(3) of the Act.2. The A.O. in this case, imposed penalty of Rs.1,25,29,942/- u/s 140A(3) of the I. T. Act, 1961 by treating the assessee in default to be equivalent to the amount remained unpaid after the expiry of the provided period in the dem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46175/- was paid in the month of April, 2011 and in support of my claim the copies of the tax paid challans are filed along with this letter. The details of the payments of tax are as under: Date of payment Mode Amount Bank details 08.04.2011 Cheque 1000000/- SBI G.T. Kamal Road, Delhi 08.04.2011 Cheque 10000000/- SBi G.T. Kamal Road, Delhi 26.04.2011 Cheque 1706875/- SBI G.T. Kamal Road, Delhi So on the basis of the above facts I have paid the complete amount of Rs. 12646175/- in such circumstances I shall not be treated as assessee in default and consequently all the provisions of section 140A (3) of the act, 1961 was not applicable to me. So I have made a genuine pray before you that no penalty proceedings under section 140A (3) of the Act is maintainable against me therefore you are requested to please not to initiate any penalty proceedings against me under section 140A(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid the admitted tax much earlier i.e. complete payment of tax has been paid on 25.01.2011 and the details of the payment of taxes are as under:- Date of payment Mode Amount Bank details 06-09-2010 Cheque 4,00,000 SBI, G.T.K. Road, Delhi 14-10-2010 Cheque 10,00,000 SBI, G.T.K. Road, Delhi 08.04.2011 Cheque 10,00,000 SBI, G.T.K. Road, Delhi 08.04.2011 Cheque 10,00,000 SBI, G.T.K. Road, Delhi 28.04.2011 Cheque 17,06,875 SBI, G.T.K. Road, Delhi So these facts establish that the intention of the appellant was not bad and he has not willfully delayed the payment of the admitted tax but the delay in payment of tax was due to the financial hardship or constraint. 5.2 That the complete details of the bank statement other relevant details has been filed before th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income Tax [2006] 285ITR 45 (KAR),- Commissioner of Income-tax Vs. Freewheels India limited [2001]248ITR689 (Delhi), - Commissioner of Income tax Vs Western India Sales and Service (1996) 220 ITR 292 (Patna) 5.6 That after considering the facts and submission of the appellant you are requested to please delete penalty u/s 140A(3) of the Act, 1961 as the same is not maintainable as there was sufficient cause for delay in deposit the admitted tax by the appellant. 4. Ld. CIT(A) determined the appeal to restrict the penalty at 25% tax liability of the assessee and gave relief of 75% of the tax liability as per para 6 as under: The only ground of ht appeal is regarding imposition of penalty u/s 140A (3) of the I. T. Act, 1961. The A.O. had imposed the penalty considering the assessee in default as the appellant failed to pay tax as per the provisions contained in Sec.140A of the I. T. Act, 1961. In his written submission the appellant has stated that he should have not been considered the assessee in default as he had paid admitted tax prior to issuance of show cause notice by the A.O. in this regard. Further the appellant has also stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubted and therefore does not deserve the maximum penalty. However, the appellant cannot escape from the liability to pay penalty as the intention of the legislature regarding payment of tax is to pay as you earn. The appellant should have arranged for payment of tax as the income was earned. It is quite a vague reason that the appellant was facing financial crisis and that too without any proof and evidence. In my opinion the appellant definitely an assessee in default and is liable to pay penalty. Since the intention of the appellant was not to evade tax and the entire tax has been paid also, the imposition of maximum penalty is not justified. In view of the above, I restrict the quantum of the penalty to the 25% of the amount levied by the A.O., i.e. 25% of the tax liability of the appellant. Thus the penalty is reduced to Rs.31,61,720/-. 5. Against such order, assessee is in appeal for sustaining imposition of penalty to the extent of 25% whereas, the Department is in appeal against allowing relief for 75% of the amount demanded. 6. Ld. Counsel for the assessee filed following details and submissions with case law as under:- Date of Penalty Order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no funds for payment of taxes therefore he has taken a loan for payment of taxes. - The fact that the assessee has no funds for payment of tax is already in the knowledge of the assessing officer. He was having all the bank statements and financial statements of the assessee for making the assessment u/s 153C of the Act for last six years. - Assessee was again and again requesting and bringing the facts of paucity of funds in the knowledge of the assessing officer. - The penalty was levied by the ld. AO with bias mind and due to change of opinion. - The fact that the ld. AO was biased against assessee is quite evident from the Assessment Order passed. Some of the facts are as under: The statement of person searched was recorded by the AO on 07.12.2010 while the statement of the assessee recorded on 24.11.2010 in which the ld. AO asked the questions based on the statement of person searched. Summons dated 06.09.2010 issued by the ld. AO for appearing on 09.09.2010, but he has also issued penalty notice for non appearance on 08.09.2010 itself. Despite repeated requests he has not provided the copy of statements recorded of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case law as cited by the assessee before lower authorities as well as before this Bench do not directly support the case of the assessee. Moreover, financial position has neither been explained nor proved nor it has been established that when the assessee has made the payment. How he came in possession of amount deposited and from which source? It is mentioned that assessee has just taken a plea without having been substantiated. As such, the order of Ld. CIT(A) in reducing the penalty from 100% to 25% is also uncalled for and unwarranted. It was thus pleaded for restoration of the order of the A.O. 9. We have heard both the sides, considered the material on record as well as submissions made before the lower authorities and reiterated before this Bench in the light of the precedents relied upon by Ld. Counsel for the assessee. It is not in dispute that the assessee has earned substantial income in the year under consideration but he did not pay the due tax within the stipulated time after service of demand notice. Neither any reasonable cause has been shown nor substantiated and Ld. CIT(A) appears to have given relief of 75% of the amount of penalty imposed by the A.O. whil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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