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TMI Blog2014 (5) TMI 927X X X X Extracts X X X X X X X X Extracts X X X X ..... f the A.O. as contained in assessment order as per para 4.1 to 4.6 from page 2-4 as under: "4.1 The assessee filed return or Income for the assessment year 2009-10 on 3" November, 2010, declaring income of Rs. 6,23,36,790/-. The assessee did not make payment under section 210 of the income tax act, 1961 of the amount of tax. After Claiming credit of Rs. 14,60,000/- on account of advance tax and self assessment tax, a total admitted tax liability was shown as payable Rs. 1,26,46,875/- . The assessee did '10t make the payment of admitted tax liability under section 140A of the act and filed. The" return of income showing tax amount payable at Rs. 12,64,875/- on account of self assessment tax. 4.2 The return of income filed by the assessee was processed under section 143(1) of the income tax act, 1961 on 28.12.2010. Out of total tax* payable, credit of Rs. 14,00,000/- was allowed on account of self assessment tax and a demand of Rs. 1,84,02,860/- was raised against the assessee under section 143(1) of the act. The intimation under section 143(1) of the income tax act, 1961 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1961. Nothing came forward from the reply of the assessee to overcome the default committed under section 140A(3). The contentions above did not carry any force and help the assessee to build up any reasonable cause for non-'payment of admitted tax, liability. From the above details and discussion, it was held that the assessee did not make" the payment of admitted tax liability and committed default within the provisions of section 140A(3). The AD placed reliance on the following cases. 4.6 Default on the part of the assessee has also been, examined in view of the following case laws and decision of different courts: Commissioner of Income Tax Vs. Devidayal Stainless Steel India Private Limited (1991) 189 ITR 0506 (Bombay); Commissioner of Income Tax v. Pitambardas G.) and Co. (1995) 216 ITR 0172 (Bombay); Taylor Instrument Co. (India) limited v. Commissioner of Income Tax (1998) 232 ITR 0771 (Delhi); d) Govinda Chetty (V.) v. Commissioner of Income Tax (1998) 231 ITR 0615 (Madras); Ramchandra Pesticides P. Ltd. v. Commissioner of Income Tax (2006)285 ITR 0045 (Karnatka); Income Tax Officer v AM.S. Salimaricar (2001) 247 ITR 0808 (SC).Therefore, the assessee was held' i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for delay in deposit of admitted tax. 5.3 That it is deemed to be implied that the AO has allowed time to the appellant to deposit the admitted tax and due to this he has issued show cause notice after the payment of the admitted tax and after a long period of time. The AO has issued the notice to the appellant for committing a default u/s 140A(3) of the Act, 1961 i clearly express the change of mind of the A.O. This establish the non judiciousness of the AG. 5.4 That the appellant has faced financial hardship/crisis during the previous year as well as assessment year i.e. A/Y: 2009-10 and this has established through the examination of the bank statement 'and other relevant details filed before the AG. at the time of the assessment proceedings, further as considered the immediate, subsequent previous year and thereafter the income of the appellant has substantially reduced and in the NY:, 2009-10 the appellant has incurred the huge losses in share investment this, also caused the financial constraint/crisis. So after considering the facts, the situation is beyond the control of the appellant to arrange the funds. 5.5 That if there is sufficient reasonable cause for the non-pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the provisions of this Act shall apply accordingly.' The intention of the legislative is clear on above provisions contained in the Act. The provisions are made to ensure strict compliance of the law. This is evident from the word "shall" used in treating the assessee in default. Any other interpretation will defeat the very purpose of the provision. Where the A.O. initiated proceedings for levy of penalty by treating the assessee as assessee in default and the assessee challenged levy of penalty under section 221 on the ground that no notice of demand under section 156 was served by the A.O., it was held that liability to pay self assessment tax arises on the baiss of the return furnished by the assessee and the failure to pay tax or interest or both on the income admitted in the return, renders the assessee to be in default. Hence, there was no need to issue notice of demand. Safari Mercantile Pvt. Ltd .Vs CIT (2008) 21 SOT 531 (Mum.). In view of the above, I am of the considered opinion that once the default is committed the appellant became the assessee is default and cannot take shelter under any reason or circumstances. It is quite a vague reason that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rears - Assessee suo moto deposited the tax and there was no recovery proceedings initiated against the assessee - The maximum penalty (100%) must be levied in extreme cases where the assessee either ran away or not paying the taxes despite recovery proceedings or with mala fide intention. - There was reasonable cause for not depositing the tax within the time. -The Assessee earned an unexpected income from the Capital Gains on sale of property/shares. I.T.A. Nos.10 5833, 5854/Del/2012 - He has again reinvested the amount received in anticipation of more profits in the real estates. - He was under bonafide belief that since there was a boom in the real estate sector, he will earn a handsome profit till the date of filing of return of income. - But unfortunately the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; ii) ACIT Vs Avdesh Kumar Parvinder S. Kochar 117 TTJ 137 (Del.) iii) Addl. CIT Vs Freewheel India Limited 137 ITR 378 (Del.) iv) CIT (TDS) VS Global Infosystems Ltd. 165 Taxman 486 (Del.) v) Addl.CIT Vs Kalyanmal Mills Tent Factory 116 ITR 881 (MP) vi) CIT Vs Chembara Peak Estates Ltd. 183 ITR 471 (Ker.) vii) Cit Vs Jaipur Electro Pvt. Ltd. 183 ITR 476 (Raj.) viii) CIT Vs Bhikaji Ramchandra 183 ITR 478 (Bom.) ix) ITO Vs U. Pvt. Ltd. 9 TTJ (Ahd.) 374 x) CIT Vs Mysore Fertilizer Co. 145 ITR 91 (Mad.) xi) Ramchadra Pesticides Pt. Ltd. Vs CIT 285 ITR 45 (Ker.) &n ..... 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