9911796707
|
Home
Issues:
Penalty under section 221(1) of the IT Act, 1961 for delayed payment of advance tax. Detailed Analysis: The appeal pertains to the year 1978-79, where the assessee, a Private Limited Company, disputed a penalty of Rs. 7,500 sustained by the AAC under section 221(1) of the IT Act, 1961. The ITO initially levied a penalty of Rs. 10,000, which was later reduced to Rs. 7,500 by the AAC. The delay in payment of advance tax of Rs. 99,750 was attributed to the illness and subsequent hospitalization of the company's director in charge of taxation matters, causing disruption in the company's operations. The assessee contended that the delay was unintentional and beyond their control, supported by the timely payment of earlier advance tax installments amounting to Rs. 2.94 lakhs. The AAC acknowledged the mitigating circumstances but still imposed a penalty, albeit reduced. The assessee further appealed, emphasizing the significant impact of the director's demise on the company's functioning and the subsequent illness of the replacement director, leading to the delayed payment. The assessee argued that there was no ulterior motive behind the non-payment and highlighted their compliance history with tax obligations. The Tribunal considered the extenuating circumstances presented by the assessee, including the unforeseen events affecting key personnel responsible for tax matters, leading to the inadvertent delay in payment. It was noted that the first two advance tax installments were paid on time, and the third installment was eventually paid by the end of the financial year. The Tribunal concurred with the earlier finding that the penalty imposed by the ITO was excessive and concluded that no penalty was warranted based on the facts and circumstances of the case. Consequently, the Tribunal decided to cancel the penalty and allowed the appeal filed by the assessee. In summary, the Tribunal's decision revolved around the unintentional nature of the delay in advance tax payment due to unforeseen circumstances impacting key personnel, leading to disruptions in the company's operations. The Tribunal found no malicious intent behind the delay and deemed the penalty imposed as excessive, ultimately canceling the penalty and ruling in favor of the assessee.
|
