TMI Blog2018 (3) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was expressly covered in pre 01.04.1989 prevailing Sec. 140A(3). Thus, without there being any requisite corresponding amendment to Sec. 221 of the Act in consonance with the amendments carried out in Sec. 140A(3) of the Act w.e.f. 01.04.1989, the Assessing Officer erred in levying the impugned penalty. Thus, on this aspect, we hereby set-aside the order of CIT(A) and direct the Assessing Officer to delete the penalty imposed u/s 140A(3) r.w.s. 221(1) of the Act. - Decided in favour of assessee - ITA NO. 7509/MUM/2011 - - - Dated:- 19-1-2018 - SHRI G . S . PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER For The Appellant : Shri Pavan Ved For The Respondent : Shri Rajesh Kumar Yadav ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tely deposited on 02.03.2010 before the penalty was imposed by the Assessing Officer vide order dated 08.03.2010. The Assessing Officer as well as the CIT(A) did not find the reasons advanced by the assessee to be satisfactory to mitigate the levy of penalty. As per the Assessing Officer, the provisions of Sec. 140A(3) r.w.s 221 of the Act did not provide any discretion to the Assessing Officer not to levy the penalty. Considering that the assessee had defaulted in payment of self-assessment tax within the stipulated period and was thus liable to be treated as assessee in default as per the provisions of Sec.140A(3) r.w.s. 221(1) of the Act, he imposed the penalty @ 10% of the delayed self-assessment tax of ₹ 2,59,89,461/-, thereby ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with the provisions of sub - section ( 1 ) , the Assessing Officer may direct that a sum equal to two per cent of such tax or part thereof, as the case may be, shall be recovered from him by way of penalty for every month during which the default continues; Provided that before levying any such penalty, the assessee shall be given a reasonable opportunity of being heard . Quite clearly, in terms of the provisions of Sec. 140A(3) of the Act as existing till 31.03.1989, the Assessing Officer was empowered to levy penalty in cases where assessee had failed to pay the self-assessment tax, and such penalty was leviable for every month during which the default continued of a sum equal to 2% of such tax or part thereof. At the ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est for such default. The aforesaid legislative intent also gets strength by the fact that simultaneously the legislature prescribed for mandatory charging of interest u/s 234B of the Act for default in payment of self-assessment tax w.e.f. 01.04.1989 onwards. 6. However, a contrary position is taken by the Revenue to the effect that for having defaulted in payment of self-assessment tax within the stipulated period, assessee qualifies to be an assessee in default as prescribed in the amended Sec. 140A(3) of the Act and, therefore, if one is to read the same with Sec. 221(1) of the Act, the action of the Assessing Officer in imposing penalty is quite justified. In sum and substance, it is sought to be emphasised on the strength of Sec. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e default in payment of selfassessment tax would hitherto be covered by the scope of Sec. 221(1) of the Act. The emphasis of the Revenue is to point out that the non-payment of self-assessment tax renders the assessee in default in the amended provision which further prescribes that all the provisions of this Act shall apply accordingly and, therefore, the default is hitherto (from 01.04.1989) covered by Sec. 221(1) of the Act. In our view, the consequence of the aforesaid two expressions contained in Sec. 140A(3) are also not of the type sought to be understood by the Revenue, and rather the assessee is to be treated as an assessee in default for the limited purpose of enabling the Assessing Officer to make recovery of the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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