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TMI Blog2014 (8) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... d tax liability has been paid at the time of filing the return u/s 139(5) of the Act, the provisions of sub-section (3) of section 140A of the Act cannot be invoked for imposing penalty u/s 140A of the Act for non-payment of tax or interest on the income declared in the return - the penalty u/s 140A(3) of the Act cannot be levied – Decided against Revenue. - ITA No.531/LKW/2013 - - - Dated:- 8-8-2014 - Sunil Kumar Yadav And A K Garodia, JJ. For the Appellant : Shri Amit Nigam, DR For the Respondent : Shri P K Kapoor, CA ORDER:- PER : Sunil Kumar Yadav This appeal is preferred by the Revenue against the order of the ld. CIT(A), inter alia, on various grounds, which are as under:- 1. That the Ld. CIT(A) has erred in law and on facts in canceling penalty of ₹ 1,24,35,720/- levied by AO by invoking provisions of Section 140A(3) without appreciating the fact that these provisions have to be read with provisions of S. 140A(1) and if this is done the action of the AO is the proper course. 2. That the Ld. CIT(A) has erred in law and on facts in failing to appreciate that the assessee had failed to pay advance tax and thereby infringed provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity as per original return of income and levied penalty of ₹ 1,24,35,720/-. 4. The assessee preferred an appeal before the ld. CIT(A) with the submission that the return was filed under section 139 of the Act and at the time of filing the revised return, the admitted tax liability was paid. Therefore, provisions of section 140A(3) of the Act cannot be invoked. Finding force in the contention of the assessee, the ld. CIT(A) has deleted the penalty having observed that once valid revised return has been filed, it effaces and substitutes the original return of income and admittedly there was no unpaid tax liability as per the revised return of income. Therefore, there was no occasion to initiate proceedings under section 140A(3) of the Act. Accordingly, the penalty order was cancelled. The relevant observations of the ld. CIT(A) are extracted hereunder for the sake of reference:- 3.3.1 The admitted facts in the instant case are: i) that the appellant company had filed a return on income on 30.09.2008, which was within the due-date as stipulated u/s 139(1) of the Act. ii) that the appellant company had not paid the admitted tax liability per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was under the original return. 3.3.4 In view of the discussion above and the cited case laws, I am of the considered view that once a valid revised return had been filed, it effaces and substitutes the original return of income. In the instant case, there was no unpaid admitted tax liability as per the revised return of income, thus, there could be no occasion for the A.O to initiate proceedings u/s 140A(3) of the Act. In this view of the matter, I hold that the levy of penalty proceedings u/s 140A(3) was without any legal basis and, therefore, the same is cancelled. 5. Aggrieved, the Revenue is in appeal before the Tribunal and has placed reliance upon the order of the Assessing Officer. 6. The ld. counsel for the assessee, besides placing reliance upon the order of the ld. CIT(A), has invited our attention to the provisions of section 140A(3) of the Act with the submission that section 140A(3) of the Act can only be invoked where the 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) of section 140A of the Act, but in the instant case return was filed as per sub-section (1) of section 140A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... For the purposes of sub-section (1), interest payable,-- (i) under section 234A shall be computed on the amount of the tax on the total income as declared in the return as reduced by the amount of, (a) advance tax, if any, paid; (b) any tax deducted or collected at source; (c) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (d) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (e) any tax credit claimed to be set off in accordance with the provisions of section 115JAA 6or section 115JD; (ii) under section 115WK shall be computed on the amount of tax on the value of the fringe benefits as declared in the return as reduced by the advance tax, paid, if any. 3(1B) For the purposes of sub-section (1), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax. 5Explanation.-For the purposes of this sub-section, assessed tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return under section 139(5) of the Act the admitted tax was paid. The revised return also substitutes the original return, as the assessment was framed on the basis of the revised return. Therefore, the assessee has filed the return under section 139 of the Act and at the time of filing of the return, the admitted tax liability was also paid. Provisions of sub-section (3) of section 140A of the Act can only be invoked where the assessee has not paid admitted tax liability while filing the return under section 139 of the Act. Since the admitted tax liability has been paid at the time of filing the return under section 139(5) of the Act, the provisions of sub-section (3) of section 140A of the Act cannot be invoked for imposing penalty under section 140A of the Act for non-payment of tax or interest on the income declared in the return. Therefore, we are of the considered view that in such circumstances, the penalty under section 140A(3) of the Act cannot be levied. We have also carefully perused the order of the ld. CIT(A) and we find no infirmity therein. Accordingly we confirm the same. 11. In the result, appeal of the Revenue is dismissed. Order pronounced in the open ..... X X X X Extracts X X X X X X X X Extracts X X X X
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