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TMI Blog1986 (4) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... djusting the tax deducted at source and the advance tax paid, there remained a liability to the extent of Rs. 7,46,157 to be cleared under s. 140A(1) of the IT Act, 1961. In accordance with the provisions of the said section the assessee was under a legal obligation to pay tax on the basis of the returned income within 30 days of furnishing the return. the assessee failed to do so. 3. Shown cause notice under s. 140A(3) of the Act was issued on12th Aug., 1977requiring the assessee to state as to why penalty be not imposed on it. Second show cause notice was also issued on18th Aug., 1983to submit reply on or before30th Aug., 1983. On behalf of the assessee a reply was filed on3rd Sept., 1983wherein it was submitted that the assessee had fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appears to have been urged before the ld. CIT(A) that lot of refund was due to the assessee in respect of preceding assessment years and that no tax was due on account of self assessment for 1974-75 and that thus the assessee could not be treated in default in payment of self assessment tax. It was also contended that the position regarding refund due as discussed by the ld. ITO in the penalty order did not correctly reflect the factual position. The ld. CIT(A) directed the ld. ITO to verify afresh the claim of the assessee in the light of the submissions made in the course of appeal proceedings. The ld. ITO submitted a report dt.17th July, 1984and copy thereof was also furnished to the assessee to enable if no furnish its comments on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a relief of Rs. 65,000." 5. The Revenue's present appeal is against the said finding. From the above narration it is seen that a penalty of Rs. 2,50,000 was imposed by the ld. ITO. The ld. CIT(A) reduced the penalty to Rs. 1,85,000 thereby conceding a relief Rs. 65,000. The Revenue's present appeal is against conceding of the said relief. The assessee also filed ITA No. 4774 (Cal)/84 for the asst. yr. 1974-75 against the confirmation of penalty to the tune of Rs. 1,85,000. This paragraph is by way of explanation for properly appreciating the background. 6. During the hearing of the appeal before us on behalf of the Revenue Sri D. S. Mann, the ld. Departmental Representative supported the penalty order and contended that the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal was being disposed of. It was the duty of the parties to point out to the Bench at the appropriate time that there were cross appeals. Since it was not done the Bench disposed of the assessee's appeal as it could not take note of the Revenue's appeal at that time. The Bench after considering the detailed submissions made before it cancelled the penalty with the following observations: "Assessee had written letter dt.1st June, 1974to the ITO to adjust refunds due to the assessee against the aforesaid tax payable under s. 140A. ITO, however, rejected the assessee's claim and levied the aforesaid penalty. The assessee carried the matter to CIT(A) who called for ITO's report and, thereafter in para 8 discussed the right items of refund, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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