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TMI Blog2008 (3) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed by the Tribunal was set aside and the Tribunal was directed to dispose off the Miscellaneous Application filed by the assessee on merits. Accordingly in compliance with the directions of Hon ble High Court, the Miscellaneous Application filed by the assessee was fixed for hearing before the Tribunal and both the parties, i.e., assessee and the revenue were heard. 3. Before we proceed to record the arguments advanced by the parties on the merits of the Miscellaneous Application of the assessee, we want to record that the Tribunal vide its order dated 9-5-2006 has held that no reasonable cause for not depositing the tax in time with the Government could be established by the assessee and therefore, the penalty under section 221 of the Act has been rightly levied by the Assessing Officer. The assessee has not pointed out any mistake apparent from the record regarding this finding of the Tribunal in its Miscellaneous Application filed before the Tribunal. The only plea of the assessee in the Miscellaneous Application preferred by the assessee before the Tribunal is that as no notice of demand as provided under section 156 of the Income-tax Act, 1961 was served on the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1) of section 140A of the Act, he shall be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid and all the provisions of the Act shall apply accordingly. The Ld. DR submitted that due to the statutory provisions of section 140A(3) of the Act, the assessee having failed to pay the part of tax payable in accordance with the provision of section 140A(1) of the Act on the basis of the return of income furnished by the assessee, the assessee shall be "deemed to be an assessee in default" in respect of tax and interest and, therefore, there is no requirement of law to serve a separate notice of demand on the assessee, before levy of penalty under section 221 of the Act. He submitted that once the assessee is held to be an assessee deemed to be in default in making the payment of tax or interest etc. or both in accordance with the provision of section 140A of the Act, there is no requirement of section 221 of the Act for service of separate notice of demand under section 156 of the Act on the prescribed form. He submitted that no notice of deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase it fails to pay the tax or interest or both, which is payable on the basis of the any return of income furnished by the assessee. 6. We have considered the rival submissions carefully. The material facts of the case are not in dispute. The assessee has sold shares for Rs. 75 crores and it has given rise to capital gain at Rs. 74,18,37,910. The assessee was under a legal obligation to pay advance tax payable on the amount of capital gains. The assessee did not deposit any amount of advance tax. On the basis of the computation of income total tax payable was Rs. 10,03,83,644 inclusive of interest under sections 234B 234C of the Act. In accordance with the statutory provision of section 140A(1) of the Act, the assessee was under a legal obligation to pay such tax as is found payable on the basis of the return of income furnished by the assessee along with the interest payable by it, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest. However, the assessee has paid an amount of Rs. 90 lakhs only by way of self-assessment tax, as against the amount of Rs. 10,03,83,644 payable by it. The provision of section 140A(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer. The fact is that in this case the amount of tax and interest is payable on the basis of the return filed by the assessee itself under the provisions of the Act and is payable by virtue of the provision of "self-assessment" under section 140A(1) of the Act. The provision of section 140A(1) (3) are reproduced hereunder: "140A(1) : Self-Assessment. Where any tax is payable on the basis of any return required to be furnished under section 139 or section 142 or section 148 or as the case may be, section 158BC, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee shall be liable to pay such tax together with interest payable under any provision of this Act for any delay in furnishing the return or any default or delay in payment of advance tax, before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest. 140A(3) : If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the provisions of section 140A(1) of the Act is "deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid" as per the statutory provision of section 140A(3) of the Act. The provision of section 140A(3) of the Act further provides that in case the assessee is deemed to be in default, all the provisions of this Act shall apply to the case of the assessee. The words "all the provisions of this Act" shall include the provision of section 221 of the Act also, which provides for levy of penalty when an assessee is in default or is deemed to be in default in making the payment of tax etc. There is no requirement of the provision of section 221 of the Act for service of separate notice of demand under section 156 of the Act on the prescribed form before the levy of penalty on the assessee and the only requirement of provisions of section 221 of the Act for levying of penalty is that the assessee should be in default or deemed to be in default in making the payment of tax etc. We find that the decision of Hon ble Supreme Court in the case of Mohan Wahi ( supra ), relied upon the Learned Counsel for the assessee, is not applicable to the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment tax as per return filed by the assessee. Thus, we find that the decisions relied upon by the Learned Counsel for the assessee are clearly distinguishable on facts and are not applicable to the facts of the case of the assessee. The assessee, it seems, is mixing up the two essentially different issues and procedure thereof as per the provisions of the Act with respect of the amount of tax or interest payable by an assessee on the basis of the return filed by the assessee as "self-assessment tax" and the other issue of levy of tax etc. by the Assessing Officer on "assessment" of the assessee as per the various provisions of the Act. The scheme of the Income-tax Act, 1961 is entirely different while dealing with the cases of "assessed tax" and the tax payable as per return of income filed by the assessee as "self-assessment tax" as per the statutory provision of section 140A(1) of the Act. The provisions of section 221 of the Act providing for penalty payable when tax is in default applies to both the situations, i.e., when assessee is in default in respect of the assessed tax or is deemed to be in default in making the payment of tax under "self-assessment tax" as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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