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TMI Blog2016 (5) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of additional ground that the above legal ground charging of levy of penalty was not raised on earlier occasion before this Tribunal die to lack of proper professional advice and the omission to include this ground on the part of the assessee at the time of filing of the appeal is not wilful or wanton. Further, it was stated that the addition ground involves a legal issue, which does not require investigation of any fresh fact for adjudication of the same. He relied on the judgment of the Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (229 ITR 283), wherein it was held that a legal ground can be raised at any stage of appeal. Thus, he prayed for admission of additional ground. 2.2 On the other hand, the ld. DR objected the admission of the additional ground. However, in our opinion, the issue raised by the assessee does not require any investigation of facts and the facts are already on record. As such, we do not agree with the argument of the ld. DR that it should not be admitted. Accordingly, relying on the decision of the Supreme Court in the case of National Thermal Power Co. Ltd cited supra, we admit the additional ground for adjudication, as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self-assessment tax by instalments as follows : Date of payment Challan No. Income-tax Interest 30.08.2012 11002 24,00,000/- - 26.09.2012 11387 24,00,000/- - 18.10.2012 10204 72,00,000/- - 22.11.2012 10504 72,00,000/- - 20.12.2012 10431 1,71,39,561/- 28,60,439/- 04.01.2013 14362 - 1,52,17,724/- Total 3,63,39,561/- 1,80,78,163/- Further, he submitted that the assessee received the following amounts on sale of deluxe apartment and building : 2008-09 Rs. 73,15,200.00 2009-10 Rs. 12,40,90,310.00 2010-11 Rs. 4,75,00,000.00 Total Rs. 17,89,05,510.00 5.1 The ld. AR has also filed details of payment made for acquiring Thiruvanmiyur property, which is as follows : F.Y 2009-10 Rs. 4,50,00,000.00 F.Y 2010-11 Rs. 36,25,00,000.00 F.Y 2011-12 Rs. 1,40,00,000.00 Total Rs. 42,15,00,000.00 According to the ld. AR, the above tables clearly show that the assessee is in expansion of business and invested huge money in the project, which is earning of income from the project. He further submitted that these facts to be considered before levying penalty u/s.221(1) of the Act. 5.2 He relied on the judgment of the Raj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was acknowledged by Shri Om Prakash Agarwal on 27.9.2012. In the notice u/s.221(1) of the Act dated 8.10.2012, it is also clearly stated the asst. year 2010-11. Since, there was no response for these two notices, letter dated 5.12.2012 was issued to the assessee, which was received on 8.12.2012. In that letter, inadvertently the assessment year was typed as 2012-13 instead of 2010-11. In that letter, notice u/s.221(1) dated 8.10.2012 was referred to by the AO and it was clearly written the asst. year as 2010-11, being so, the plea of the assessee's counsel that there was no notice for the asst. year 2010-11. He relied on the provisions of sec. 220(2) of the Act to hold that any such clerical mistake to be rectified in the view of the provisions of the Act. Further, the ld. DR submitted that there is no merit in the contention of the ld. AR in stating that the assessee has not received the notice dated 26.9.2012, because the assessee has acknowledged the receipt of notice dated 26.9.2012. Regarding the merits of the case, he submitted that first show cause notice was issued on 26.9.2012 u/s.221(1) of the Act and before that the assessee paid only Rs. 61,57,871/-. After issuing noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -11, the appellant's contention that the notice was ignored because no proceedings were pending for AY 2012-13 becomes unbelievable because the firm having filed the return for AY 2012-13 with no tax payable. The appellant was certainly aware that the proceedings related to AY 2010-11 and not 2012-13 (since no demand was payable as per return for AY 2012-13). As on 31.03.201, the appellant had enough funds which are as under: 31.03.2010 31.03.2009 Mr. V. Kumaravel 4,50,00,000 Nil Mr. S. Umapathy 40,00,000 10,00,000 Tamil Nadu Mercantile Bank 6,36,34,423 1,55,09,063 Chitra Construction 1,00,90,000 Nil DABC 4,73,01,190 Nil BB Asia Impex Pvt. Ltd. 1,18,26,584 1,80,00,636 Petroplast Industries Ltd. Nil 2,14,21,656 Assets side as on 31.03.2009 was Rs. 8,72,03,826/- and increased to Rs. 21,24,24,810/-. In the circumstances, paucity of funds as one of the reasons for not paying the taxes is completely ruled out. Then it is inconceivable to say that the appellant failed to pay the tax for good and sufficient reasons. Reliance was placed on the decision of Bombay High Court in the case of CIT vs Hydroflex Equipment Limited (2006) 282 ITR 418 wherein it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has already been paid, the assessee shall be liable to pay such tax together with any interest payable for, inter alia, any default or delay in the payment of advance tax, before furnishing the return and proof of payment of such tax and interest is to accompany the return. As per the Explanation, where payment made under s. 140A(1) falls short of the aggregate of the tax and interest payable as envisaged by s. 140A(1), the amount paid shall be first adjusted towards the interest payable and the balance, if any, shall be adjusted towards the tax payable. 9. Sec. 221 (1) and the Explanation thereto read as under : "221. (1) When an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under sub-s. (2) of s. 220, be liable, by way of penalty, to pay such amount as the AO may direct, and in the case of a continuing default, such further amount or amounts as the AO may, from time to time, direct, so, however, that the total amount of penalty does not exceed the amount of tax in arrears: Provided that before levying any such penalty, the assessee shall be given a reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was discharged with interest. 13. First of all, un-denyingly the assessee was in default for making the payment of tax as well as interest leviable u/s.234A, 234B & 234C of the Act for which reason only penalty u/s.221(1) of the Act has been levied by the Authority. In the case of Nachimuthu Industrial Association Vs. Learned Commissioner of Income Tax (123 ITR 611)(Madras) wherein it was held that "income was exempt and that there was paucity of funds are relevant circumstances for deletion of penalty u/s.221(1) of the Act. Further, it was seen that the assessee is not being habitual defaulter with no adverse history tainted on the assessee goes to prove that the default was committed without malafide intention and under extreme paucity of funds, so when substantial justice and technical considerations are pitted against each other, the case of substantial justice deserves to be preferred for other side cannot claim to have vested right in injustice being done because of non deliberate delay as held by the Supreme Court in the case Culcutta, Land Acquisition, Anathnalh v. MST Kittji reported in AIR 1987 SC 1353. Further as held by Culcutta High Court in the case of Shreeniwas & S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the levy of penalty in this case is not proper. 15. Thus reading of Sec.221 of the Act shows that the Explanation wherein as "may" not "shall" which is subjective of the fact that imposition of penalty is neither automatic nor mandatory. The discretion is left with the A.O to decide whether to impose penalty or not, by considering the explanation of the assessee. This fact is evident from the provisions of section itself that mandatory opportunity of being heard has to be given to the assessee before imposition of penalty. Thereafter, the A.O considering the explanation of assessee have discretion to impose penalty. As seen from the discussion in earlier para, assessee explained the reasons. In our opinion, there exists good and sufficient reason not levy penalty. The AO was not going by any of the explanation given by the assessee with non-speaking order to impose penalty at 10% of self-assessment tax including interest. The Ld. CIT(A) enhanced it to 25% of that one. The action of both the Authorities is not appropriate. Since the assessee show cause for delay in payment of self-assessment tax, accordingly, we delete the penalty u/s.221(1) of the Act. 16. In the result, the ap ..... 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