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M/s Top Class Capital Market Ltd Versus Jt. Commissioner of Income Tax – (OSD) , Range 1 (3) , Mumbai

2015 (6) TMI 455 - ITAT MUMBAI

Penalty levied under section 221(1) - CIT(A) reduced the penalty to 5% of the self assessment tax - Held that:- In the instant case, the only reason furnished by the assessee for non-payment of tax was that it was not having liquid funds and all its funds were locked in shares and securities. However, the Ld CIT(A) has expressed the view in paragraph 4.10 of his order that the financial position of the assessee is sound, since it had made huge investment in shares and also by way of providing lo .....

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self assessment tax confirmed by the Ld CIT(A) also appears to be on the higher side. Hence, in order to put this matter to rest, we are of the view that the penalty to be levied u/s 221(1) of the Act should be restricted to 2.5% of the self assessment tax. - Decided partly in favour of assessee. - I.T.A. No.505/Mum/2013 - Dated:- 3-6-2015 - SHRI B.R.BASKARAN AND AND AMIT SHUKLA, JJ. For The Appellant : Shri Jitendra Jain and Shri Mahesh O Rajora For The Respondent : Smt. N V Nadkarni ORDER PER .....

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n of income for the year under consideration declaring a total income of ₹ 43.32 crores. As per return of income the self assessment tax due was ₹ 9.08 crores, but the assessee did not pay the same at the time of filing of the return of income. Hence, the AO held that the assessee company as assessee in default for non-payment of self assessment tax before filing the return of income in terms of provisions of section 140A(3) of the Act. Hence, the AO levied penalty under section 221( .....

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0 25.03.2011 50,00,000 26.03.2011 50,00,000 29.03.2011 2,00,00,000 30.03.2011 1,58,54,474 Total 9,08,54,474 The assessee s explanation was that though it earned good profit during the year under consideration, but the same was reinvested in other quoted shares with the expectation of earning more profit. However, due to fall in the stock market the assessee company could not sell the shares, since it may result in huge loss. Hence at the time of filing return of income, the assessee could not ge .....

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tax was paid within short period of 5 months from the date of filing of the return of income and accordingly, it was prayed that the penalty levied under section 221(1) of the Act should be deleted. 5. The assessee had also placed reliance on certain case laws before the tax authorities to support its stand. 6. However, the ld.CIT(A) noticed that the assessee had made investment of ₹ 50.20 crores and it had advanced loans and advances to the tune of ₹ 37.67 crores as on 15.3.2011. Th .....

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the penalty levied at 10% was on higher side, the ld.CIT(A) reduced it to 5% of the self assessment tax. 7. Before us, the Ld A.R placed strong reliance on the submissions made before the tax authorities and also on the decision rendered by the coordinate bench in the case of DCIT Vs. Kamala Mills Ltd (ITA No. 7775 to 7777/Mum/2004 dated 31.10.2007). He submitted that the co-ordinate bench in the above said case has deleted the penalty levied u/s 221(1) of the Act with the observation that the p .....

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A) should have deleted the penalty in entirety, instead of confirming the same partially. 8. On the contrary, the ld D.R submitted that the explanation of the assessee with regard to the financial crunch has been found to be not correct by the Ld CIT(A). 9. The provisions of sec. 140A(3) provides that the assessee shall be deemed to be in default, if the tax and interest is not paid in accordance with the provisions of sec. 140A(1) of the Act. The provisions of sec. 221 (1) provides that When an .....

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