TMI Blog2019 (8) TMI 399X X X X Extracts X X X X X X X X Extracts X X X X ..... ncial crunch and hardships, assessee did not had any liquidity to pay the self assessment tax liability. All these facts and explanation have been duly incorporated before the CIT(A) as discussed above. There are umpteen number of judgments, wherein it has been held that financial stringency is considered to be good and sufficient cause for sufficiency of reason for not levying penalty u/s 221(1). AO has also not given any reasoning to controvert the assessee s reasons regarding paucity of funds and if Assessee Company had sufficient reasons for not paying the self assessment tax at time, then assessee could not be considered as willful defaulter on which no penalty should be levied. Apart from that, Ld. Counsel has pointed out that o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2007-08 was filed on 15.11.2007 declaring total income of ₹ 36,86,75,655/-. However, the self assessment tax of ₹ 8,06,90,485/- on the return of income could not be paid on the due date due to stringent financial difficulties. In response to the show cause notice as to why the penalty u/s 221(1)could not be levied in the fault of paying the self assessment tax, assessee submitted that, due to stringent financial difficulties the same could not be paid, as the major investment of the assessee in Centaur Hotel has been a failure and has not reaped the benefit which is expected . The hotel has not been operating since April, 2005 and huge capital outlay of the assessee was blocked. All the assessee s funds were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.05.2010 10,000,000 18.06.2010 10,000,000 18.06.2010 10,000,000 18.06.2010 5,690,485 Total 80,690,485 4. It was for this reason also there was a delay in filing the appeal before the Ld. CIT(A). 5. Ld. CIT(A) condoned the delay on the ground that there was no malafide intention to delay the filing of appeal and assessee has explained as to why admitted tax liability could not be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moters to arrange finances required for restarting the operations of the hotel. 10.2 During 2007, the consortium of Banks which funded part of acquisition of the hotel pressurized for repayment of their dues and also proposed to initiate action under section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). For fear of loosing the hotel and protect its investments, the appellant decided to sell the investment in Cox and Kings (India) Limited for a consideration of ₹ 43 crore. As a result of the sale of shares of the said company, capital gains liability arose on the appellant. 10.3 M/s V Hotels Limited had approached t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re are also no liquid assets to clear the demand as seen from the balance sheet as on 31.03.2009. The appellant has no asset out of which funds can be generated although it was fully aware of its tax liabilities. After a lot of efforts by the management, the appellant was finally able to make the payments of its tax dues as detailed in Para 5.4 above. 10.5 Due to the huge financial difficulties and various other problems (like employee's non-cooperation, arbitration proceedings etc.) as explained in detail above, the appellant was unable to pay its self assessment tax before the filing of its Income Tax Return. 6. Ld. CIT(A) had deleted the penalty on the ground that assesee has shown sufficient and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The AO has also not given any reasoning to controvert the assessee s reasons regarding paucity of funds and if Assessee Company had sufficient reasons for not paying the self assessment tax at time, then assessee could not be considered as willful defaulter on which no penalty should be levied. 9. Apart from that, Ld. Counsel has pointed out that on the same reasons, the department has given the payment plan to the assessee for making the payments. Ld. Commissioner of Income Tax VI vide order dated 28.12.2012 on stay of collection of demand has given the direction for payment of installments though in some other matter. Now the entire self assessment tax has been paid and the entire liab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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