TMI Blog2020 (6) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of Section 221(2) delete the penalty levied u/s.221(1). Accordingly, the appeal of assessee is allowed. - ITA No.164/Hyd/2018 - - - Dated:- 11-6-2020 - Smt. P. Madhavi Devi, Judicial Member For the Assessee : Sri P. Murali Mohan Rao, AR For the Revenue : Sri Kiran Katta, DR ORDER This is assessee s appeal for the AY.2005-06, directed against the order of the Commissioner of Income Tax (Appeals)-1, Hyderabad, dated 01-06-2017. 2. Brief facts of the case are that, there was a search and seizure operation u/s.132 of the Income Tax Act [Act] in the residential premises of the assessee on 09-10-2007. Consequent to the search and seizure operation, the Assessing Officer (AO) issued a notice u/s.153A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the CIT(A) confirmed the penalty u/s.221(1) of the Act, against which, the assessee is in further appeal before the Tribunal, by raising the following Grounds: 1. The order of the Commissioner of Income Tax (Appeals)- 1, Hyderabad, is erroneous both on facts and in law. 2. The Ld.CIT(A) erred in dismissing the appeal. 3. The Ld.CIT(A) erred in upholding the penalty levied of ₹ 7,94,440/- u/s.221(1) of the Act. 4. The appellant may add or alter or modify or substitute or delete and / or rescind all or any of the grounds of appeal at any time before or at the time of hearing of the appeal . 4.1. The case was taken up for hearing on 02-06-2020 through video conferencing and both the parties were heard. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ash flow statement and added back to the returned income which is not correct, bad in law and not justified. The Assessee has filed a paper book as additional evidence which consists the Income Tax Return copy, Revised Computation filed by Assessee, and the details of interest paid along with cheque numbers and depreciation claimed on car which may please be considered in favour of the Assessee and the disallowance for the above asst. years may please be deleted . I have considered the submissions made by the appellant, gone through the order of the AO and perused all other information brought to my notice. At the stage of assessment, even though there was compliance the AO has drawn an adverse inference, though the appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions made by the appellant, gone through the order of the AO. In as much as this addition is concerned there is no finding of the AO that his decision is based on any finding or material found in course of the action under section 132(1) of the IT Act, 1961. In the circumstances, the AO is directed to delete the same . 5.1. The Ld.DR has relied on the orders of the authorities below. 5.2. Having regard to the rival contentions and the order of the CIT(A) in the appeal against the assessment order, it can be seen that the CIT(A) has considered the revised computation of income filed by the assessee and has deleted the additions made by the AO. The Revenue has not filed any appeal against the order of CIT(A). Hence, the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 221 (1) of the Act that the penalty is leviable so long as the default is in the nature which renders the assessee as an assessee in default for payment of tax. Sec. 221(1) of the Act prescribes for penalty when assessee is in default in making the payment of tax. On the face of it, the argument of the Revenue appears to be justified, so however, the same does not merit acceptance if one examines the issue in slight detail. Notably, the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 tax and interest due and not for levy of penalty, an aspect which has been specifically done away in the new provision. Therefore, considered in the aforesaid light, in our view, the fact that the amended Sec. 140A(3) w.e.f. 01.04.1989 does not envisage any penalty for non-payment of self-assessment tax, the Assessing Officer was not justified in levying the impugned penalty by making recourse to Sec. 221 (1) of the Act. Before parting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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