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TMI Blog2020 (6) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer (AO) issued a notice u/s.153A of the Act, dt.26-06-2008 for the AYs.2002-03 to 2007-08. The assessee filed his return of income on 09-09-2009, admitting total income of Rs. 50,49,197/-, but did not pay any taxes on the admitted income. The total self-assessment tax payable as per the return of income was Rs. 26,48,136/-. Thereafter, the assessee filed a revised computation of income. But the AO did not accept the same. 3. The assessee filed an appeal against the assessment order before the CIT(A), who accepted the revised computation of income and deleted the addition made by the AO. Meanwhile, the AO issued a notice u/s.221(1) of the Act for levy of penalty for non-payment of admitted tax. The assessee filed a reply on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were heard. 5. The Ld.Counsel for the assessee, reiterating the submissions made before the authorities below has drawn our attention to the decision of the CIT(A), Guntur, dt.15-06-2011 in the appeal against the assessment order, wherein in paras 3.3 to 4.2, the CIT(A) has held as under: "3.3. With regard to disallowance of Rs. 2,61,000/- on account of provisions made by the assessee against deficit cash. the appellant has submitted his explanation as under:- "The Assessing Officer has erred while disallowing the provisions amounting to Rs. 2,61,000/- without considering the information and explanations offered by the assessee. The list for the same has been filed along with the return of income describing the nature of expenditure as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ince the decision of the AO is not based on the information furnished by the appellant in course of the s & s assessment proceedings, the addition made by the AO does not survive. In addition 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. 4.1. With regard to second addition of Rs. 1,00,00,000/- on account of unexplained investment u/s. 69 in M/s DNA Biotech Ltd., the appellant has submitted his explanation as under.- "The Assessing Officer has erred while disallowing the investment made by the assessee in M/s DNA Biotech Ltd. and treated it as unexplained Investment u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessee had drawn my attention to the provisions of Section 221(2) of the Act, which reads as under: "Section 221(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". 5.4. In the case before this Tribunal, the final order of the CIT(A) has to be taken into consideration. 6. Though the Ld.DR supported the orders of the authorities below, I find that since the very addition has been deleted and there is no outstanding demand of tax, the penalty u/s.221 of the Act is not sustainable. 6.1. I also find support from the decision of the Co-ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statute alongwith the penalty envisaged u/s 221 of the Act. Once Sec. 140A(3) of the Act has been amended w.e.f. 01.04.1989, as we have seen earlier, there is no amendment of Sec. 221 of the Act and it continues to remain the same. What we are trying to emphasise is if the plea of the Revenue is to be accepted, based on the amendment to Sec. 140A(3) of the Act, it would mean that prior to 01.04.1989 the same default invited penal provisions under two sections, namely, Sec. 140A(3) as well as Sec. 221(1) of the Act, which would appear to be peculiar and unintended. Furthermore, the intention of the legislature at the time of insertion of the amended Sec. 140A(3) makes it clear that the old provisions of Sec. 140A(3) prescribing for le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, both during the pre and post amended Sec. 140A(3) of the Act and even in the pre-amended situation, penalty u/s 221 of the Act was not attracted for default in payment of self-assessment tax, which 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. 7. In the result, appeal of the assessee is allowed, as above". 7. Respectful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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