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TMI Blog2025 (3) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... rose from the penalty order passed under section 221(1) of the Act, for the assessment year 2008-09. 2. In this appeal, the assessee has raised the following grounds: - 1. "The Ld CIT(A), NFAC, erred in deciding the assessee's appeal against the penalty order passed under section 221 of the IT Act without considering properly the Written Submission made by the assessee. 2. The Ld CIT(A), NFAC, erred in not considering the fact that the assessee was facing financial difficulty during the period when the demand was payable and there was reasonable cause for failure on the part of the assessee and penalty was not leviable. 3. The Ld CIT(A), NFAC, erred in not considering the fact that Ld AO had imposed penalty without considering th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of INR 4, 30, 50, 000 declared during the survey action. The return filed by the assessee was selected for scrutiny, and vide order dated 28/12/2010 passed under section 143(3) of the Act the total income of the assessee was assessed at INR 5, 04, 72, 310, after making various additions on the basis of impounded documents. Subsequently, penalty proceedings under section 221(1) of the Act was initiated on the basis that the assessee has not paid an outstanding tax demand of INR 1, 21, 24, 070. In response to the show cause notice dated 13/09/2017, the assessee submitted that he had no money to make the payment of the entire amount of tax liability. Disagreeing with the submissions of the assessee, the Assessing Officer ("AO"), vide ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 declared during the course of survey action. As per the assessee, it paid an amount of Rs. 50 lakh as advance tax for the year under consideration. After giving the credit of TDS deducted and tax already paid, the return of income filed by the assessee was processed under section 143(1) of the Act computed a demand of INR 1, 21, 24, 070, which the assessee did not pay as a self-assessment tax. Accordingly, a penalty under section 221 of the Act was levied on the assessee. As per the assessee, he is in financial difficulty and has no money to make the payment of the entire amount of tax liability, therefore, he could not make the payment of the tax due at the time of filing the return of income. 7. During the hearing, the learned Authoris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 2012-13 4746508 2013-14 - ITR not filed, but the assessee has received remuneration of Rs. 36, 00, 000/- form M/s. Sejal Glass Ltd. 2014-15 - ITR not filed, but the assessee has received remuneration of Rs. 45, 00, 000 form M/s. Sejal Glass Ltd 2015-16 3616490 2016-17 211860 9. We find that the learned CIT(A) in para-5.4 of its order also noted that the assessee has considered it important to pay the interest on an unsecured loan instead of paying the due tax amount to the Government. Further, we find that as per the Explanation to section 221(1) of the Act, the assessee shall not cease to be liable to any penalty merely by reason of the fact that before the levy of such penalty he has paid the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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