TMI Blog2015 (6) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... venue. Further the issue arising before us is in relation to levy of penalty under section 140A(3) of the Act with section 221(1) of the Act for non-deposit of the taxes before filing the return of income. The Courts have time and again laid down the proposition that liberal interpretation should be given to the provisions of section 140A(3) with section 221(1) of the Act. The list of cases have been referred by the CIT(Appeals) .There is no dispute regarding the said issue. However, the perusal of the financial statements of the assessee company for the financial year 2007-08 and 2008-09 reflect the availability of the funds with the assessee which in- turn have been utilized for expansion purposes. The assessee had also borrowed fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and grounds of appeal in ITA No. 1137/Chd/2010 in order to dispose the appeals : 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing appeal of the assessee without appreciating the facts of the case. 2. On the facts and in the circumstances of the case and in law the Ld.CIT (A) has erred in allowing the appeal of the assessee without taking into account the material facts on record and believing the version of the assessee while condoning delay in filing the appeal. 3. On the facts and in the circumstances of the case and in law the Ld. CIT (A) has erred deleting the penalty u/s 140A (3), r/w Section 221(1) of ₹ 66 lacs rightly imposed by the Assessing Officer 4. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue is against the deletion of penalty levied under section 140A(3) read with section 221(1) of the Act at Rs .66 lacs . 7. The facts relating to the issue were that the assessee had filed return of income declaring total income of Rs .8,99,88,410/-on 30.09.2008. The assessee had failed to pay part of the income tax/ interest and after processing return of income under section 143(1) of the Act , penalty proceedings under section 140A(3) read with section 221(1) of the Act were initiated. The plea of the assessee that the taxes could not be paid due to financial crunch faced by the assessee company was rejected by the Assessing Officer and penalty of Rs .66 lacs was levied on income tax/interest/both to the tune of Rs .3.29 crores n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. The revenue is in appeal against the said order of the CIT(Appeals) . The ld. DR for the revenue pointed out that where the assessee had defaulted in making the payment of taxes and the interest while filing the return of income, the levy of penalty under section 140A(3) read with section 221(1) of the Act was justified. 10. The ld. AR for the assessee, on the other hand, pointed out that because the assessee was in the expansion mode, there was financial crunch and as such the taxes could not be paid before filing the return of income. However, the said taxes along with interest under section 234B 234C of the Act have been paid and thus , there is no merit in the levy of penalty under section 140A(3) read with section 221(1) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es before filing the return of income. The Courts have time and again laid down the proposition that liberal interpretation should be given to the provisions of section 140A(3) with section 221(1) of the Act. The list of cases have been referred by the CIT(Appeals) . There is no dispute regarding the said issue. However, the perusal of the financial statements of the assessee company for the financial year 2007-08 and 2008-09 reflect the availability of the funds with the assessee which in- turn have been utilized for expansion purposes. The assessee had also borrowed funds from the banks as is apparent from the perusal of the balance sheet for the two financial years. However, in the totality of the facts and circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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