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Issues:
- Imposition of interests under s. 201(1A) of the IT Act, 1961 on a private limited company for the assessment years 1969-70 to 1972-73. - Justification of imposition of interests by the ITO and appeal to the CIT(A) by the assessee. - Appeal challenging the CIT(A) decision on appealability of orders under s. 201(1A). - Merits of the case regarding financial difficulties faced by the assessee and the imposition of interests. Analysis: The judgment by the Appellate Tribunal ITAT BOMBAY-A involved appeals filed by the Department against a private limited company for the imposition of interests under s. 201(1A) of the IT Act, 1961. The ITO imposed interests on the assessee for failing to deduct and deposit tax from salaries paid to Directors and employees. The CIT(A) cancelled the interests for the respective years, considering the financial difficulties faced by the company, leading to winding up proceedings initiated by creditors. The CIT(A) found the imposition of interests unjustified due to the company's genuine financial constraints during the relevant years. The Department argued that the CIT(A) should not have entertained the appeals, claiming that s. 201(1A) was not appealable. However, the Tribunal held that orders under s. 201, including sub-section 1A, are appealable. The Tribunal considered the financial difficulties faced by the assessee, as explained during penalty proceedings, and found merit in the company's explanation. The Tribunal noted that penalty proceedings for the same defaults were dropped under similar circumstances, supporting the CIT(A)'s decision to cancel the interests imposed by the ITO. In conclusion, the Tribunal upheld the CIT(A)'s decision and dismissed the departmental appeals. The judgment emphasized the genuine financial difficulties faced by the assessee as a valid reason for not deducting and depositing tax within prescribed timelines, leading to the cancellation of imposed interests for the relevant assessment years.
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