TMI Blog2005 (2) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961 ("the Act", for short) and were admitted on a substantial question of law, common in both, which reads as follows: "Whether, on the facts and in the circumstances of the case, the finding of the Income-tax Appellate Tribunal that the assessee has a reasonable cause in not paying the tax is based on any material evidence on record?" Since the substantial question of law framed is common in both the appeals, we propose to decide the same by this common judgment. That apart, the Income-tax Appellate Tribunal, Panaji Bench, (the ITAT, for short) has also decided the same by a common order dated October 31, 2001. Respondent No. 1 ("the assessee", for short) has chosen not to contest these appeals. Both these appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income-tax came to the conclusion that there was no evidence, to support the submissions made, which was brought to the notice of the Assessing Officer in response to the said show-cause notice. The said Commissioner further observed that even in the course of the appellate proceedings the assessee had failed to furnish any evidence whatsoever in that regard and the assessee also did not furnish the balance-sheet of the assessee-company to support the plea regarding financial difficulty and, therefore, proceeded to dismiss the appeal observing that there was no material before him to infer that there was genuine reasonable cause for the default in question. The assessee then approached the Income-tax Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be levied under this section." The Explanation below the above proviso: (1) For the removal of doubt, it is hereby declared that an assessee shall not cease to be liable to any penalty under this sub-section merely by reason of the fact that before the levy of such penalty he has paid the tax. (2) Where as a result of any final order the amount of tax, with respect to the default in the payment of which the penalty was levied, has been wholly reduced, the penalty levied shall be cancelled and the amount of penalty paid shall be refunded." Admittedly, the show-cause notices in this case (Tax Appeal No. 40/2002) were issued by the Assessing Officer on April 23, 1998. In this case the assessee informed the Assessing Officer by letter dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled a return on September 3, 1997, declaring total income of Rs. 30,79,150 on which tax payable was Rs. 23,40,650 and due date for payment of the same was September 3, 1997. By letter dated November 11, 1997, the assessee sought time to pay the same in instalments and the same was refused by the Assessing Officer by letter dated December 4, 1997. On the same day the assessee paid a sum of Rs. 2,25,000 towards the tax and again on December 5, 1997, paid another sum of Rs. 2,75,000 and thus Rs. 5,00,000 in all. Although, the Deputy Commissioner by another letter dated May 13, 1998, rejected the request of the assessee for the grant of time for payment of taxes for both the years, it appears that the assessee approached the Chief Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal was right in allowing the appeal holding that the assessee had not committed default to warrant institution of penalty proceedings as far as the assessment year 1996-97 is concerned. Although, the assessee initially contested these appeals by filing an affidavit, subsequently the assessee's counsel Mr. E.P. Badrinarayan withdrew his appearance and at this time, Mr. Badrinarayan undertook to inform the assessee about his withdrawal. Accordingly, the managing director of the assessee was duly notified but the managing director by his application dated January 3, 2005, informed the court that he is no more the managing director of the assessee. The assessee was lastly served by pasting a notice on the main shutter of the assessee's of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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