TMI Blog1982 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... return was heavy at the relevant period. No cash balance was on hand and therefore, could not be paid under s. 140A in time. Due to these reasons return could not be filled in time. The ITO did not agree with the explanation of the assessee on the ground that the assessee has not filed and evidence in support of his claim and therefore there was no application for extension of time and the assessee has committed the default by filing the return late and is liable for penalty under s. 271(1)(a) and finally he imposed penalty of Rs. 2065. Being aggrieved, the assessee carried the matter before the AAC. Similar arguments were repeated before the AAC. The AAC also did not agree with the explanation of the assessee. According to him, the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. That clearly shows that the assessee can file the return even without payment of tax required by s. 140A(1). In this case the assessee simply said that the return was ready but was not filed because he had no amount to pay the tax for the relevant year before filing the return but the assessee has no proof in support of his claim that the return was ready before 30th June, 1976. All these go to show that the contention of the assessee is not reliable, should not be accepted and there is a clear default. If the assessee had no amount then he could borrow the money for payment of tax as that was a statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y proof of payment of tax for the relevant year. But sub-s.(3) of the said section provides that if the assessee fails to pay the tax or any part thereof in accordance with the provisions of sub-s. (1) the ITO will direct that a sum equal to 2 per cent of such tax or part thereof as the case may be shall be recovered from him by way of penalty. The combined reading of both the subsections show that the assessee should file the return alongwith the proof of payment of tax but in case the assessee fails to pay the tax in accordance with the sub-s. (1) then the ITO can recover the penalty for that failure. It shows that the assessee can file the return without payment of tax. At the most the ITO can recover the penalty for failure on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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