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TMI Blog2017 (5) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... sable” under the Income Tax Act has been specified in section 275 of the Act. As far as penalty under section 221 of the Act is concerned, the limitation has not been provided, however it should be levied within a reasonable period of time. We find that the penalty has been levied even before the completion of the assessment and thus in our opinion it has been levied well within a reasonable period. Whether the assessee was not having any liquidity problem for making payment of tax under section 140A - Held that:- From the order of the lower authorities, we find that the assessee did not file the documentary evidence in support of contention of liquidity crunch, however, before us, the assessee has sought one more opportunity for discharging its onus of showing “good and sufficient cause” for not making the payment of admitted tax liability. We are of the opinion that in the interest of natural justice, the assessee should be allowed one more opportunity to discharge his onus in terms of second proviso to section 221 of the Act. Accordingly, we restore the issue of levy of penalty for nonpayment of admitted taxability to the file of the Assessing Officer for deciding afresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961. 5. The assessee craves leave for the addition, modification, deletion of any of the grounds of appeal. 3. Facts in brief of the case are that due date of filing of return of income as per section 139(1) of the Income-tax Act, 1961 (in short the Act) in the case of the assessee for the year under consideration was 30/09/2010, however, the assessee did not file return of income on the due date. The Assessing Officer issued notice under section 142(1) of the Act on 8/02/2011, requiring assessee to file the return of income. The assessee did not comply this notice. Another notice under section 142(1) of the Act was issued on 11/08/2011, requiring the assessee to file the return of income. The assessee did not comply this notice also. Again a fresh notice was issued on 26/09/2011 under section 142 (1) of the Act for filing return of income. In response to this notice, the assessee filed return of income on 30/09/2011, electronically, declaring total income of ₹ 2,39,16,490/-. The case was selected for scrutiny and notice under section 143(2) of the Act was issued and served. During the assessment proceeding except filing Auditors Report alongwith Annexure, no comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o submissions were filed by the assessee before the Ld. CIT(A). The Ld. CIT(A) observed that admitted tax liability was not paid even till the passing of the appellate order and therefore, he questioned the bonafides of the assessee in honouring his own commitment of tax payment on the returned income. Accordingly, he dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 4. In ground No. 2, the assessee has raised the issue that Assessing Officer was not permitted to levy penalty for non-payment of admitted tax liability under section140A(3) of the Act. In ground No. 1, the assessee has challenged the finding of the Ld. CIT(A) that quoting wrong section was an inadvertent mistake and could be ignored in view of section 292B of the Act. 4.1 Supporting the above grounds, the Ld. counsel submitted that quoting wrong section was fatal to levy of penalty and the assessee could not get opportunity to defend the penalty levied. In support of his contention, he relied on the decision of the coordinate bench in the case of Sh. Rakesh Kumar Garg in ITA No. 5198/Del/2013 and decision of the Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in view of the above the penalty levied should be sustained. 4.5 We have heard the rival submissions and perused the relevant material on record. It is relevant to reproduce the section 140A and section 221 of the Act as under: Section140A 140A(1) :Where any tax is payable on the basis of any return required to be furnished under section 115WD or section 115WH or section 139 or section 142 or section 148 or section 153A or, as the case may be, section 158BC, after taking into account, - (i) the amount of tax, if any, already paid under any provision of this Act; (ii) any tax deducted or collected at source; (iii) 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; (iv) 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 (v) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD, the assessee shall be liable to pay such tax together with interest [and fee] payable under any provision of this Act for any delay in furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder: Return of income, etc., not to be invalid on certain grounds. 292B. No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. 4.8 The Ld. counsel has contended that above mistake could not be ignored invoking section 292B of the Act. The Ld. counsel has relied on the decisions of the Tribunal in the case of Sh. Rakesh Kumar Garg (supra) and DD Resorts Private Limited (supra). In the case of DD Resorts Private Limited (supra), the Tribunal has followed the finding in the case of Sh. Rakesh Kumar Garg (supra), therefore, we find it relevant to produce the finding of the Tribunal in the case of Sh. Rakesh Kumar Garg as under: 28. Sum up, we are inclin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together with interest payable under any provision of this Act before furnishing the return of income and such return of income shall be accompanied by proof of payment of such tax and interest. Whereas in the your return this amount of tax amounting to Rs. 1,09,71,691/- has been shown as payable. 2. No evidence in respect of tax payable of ₹ 1,09,71,691/- has been submitted with the return of income rather the amount has been shown as payable. Provisions of sub section 3 of Section 140A, provides as under: 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 (I), be shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid, and all the provisions of this Act shall apply accordingly. 3. In view of the above provisions, you were required to pay self assessment tax and to furnish the evidence alongwith the return of income for the AY 2009-10. State as to why you should not be treated assessee in default as provided under section 140A(3) of the Act. 4. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onor all the commitment made with the department for the unpaid amount once the liquidity position is eased up and accounts are de-sealed. The assessee is in genuine hardship due to which not able to pay the tax u/s 140A. Moreover, as per proviso of section 221 of the Income Tax Act, 1961 if there are sufficient reason for the non-payment of tax u/s 140A then no penalty u/s 140A (3) shall be levied on the Assessee. Provided further that where the assesses proves to the satisfaction of the [Assessing] Officer that the default was for good and sufficient reasons, no penalty shall be levied under this section Our view is supported by the following case laws: Section 140A-Held, that the proviso then S. 140A (3) enjoined upon the TTO to afford a reasonable opportunity to the assessee of being heard before the decided to impose a penalty. That clearly implied that it was open to the assessee to show that the default in payment of tax was due to a reasonable cause and no penalty could be levied in the circumstances of the case. Addl.CIT vs. Free Wheels India Ltd. (1982) 9 Taxman 18: (1992) 28 CTR 85:(1982) 137ITR 378, 385 (Del). Illustrations: Whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law [see N. Mani v. Sangeetha Theatre and Ors. (2004) 12 SCC 278]. Thus, quoting of wrong provision of Section 20 in the order of discharge of the appellant by the competent authority does not take away the jurisdiction of the authority under Section 22 of the Army Act. Therefore, the order of discharge of the appellant from the army service cannot be vitiated on this sole ground as contended by the Learned Counsel for the appellant. In N. Mani v. Sangeetha Theatres Ors. [(2004) 12 SCC 278], it is stated: 9. It is well settled that if an authority has a power under the law merely because while exercising that power the source of power is not specifically referred to or a reference is made to a wrong provision of law, that by itself does not vitiate the exercise of power so long as the power does exist and can be traced to a source available in law. 4.17 In the instant case al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see already submitted reasons for liquidity crunch before the Assessing Officer. The Ld. counsel submitted that demand emanated due to the surrender of income made at the time of search and subsequent closure of cash generation source of the assessee. He submitted that assessee was well intended and, therefore, the income which was surrendered in the search, was offered in the return of income, however, due to non-availability of funds the admitted tax liability could not be paid and which has been paid by the assessee on 20/10/2014. The Ld. counsel submitted that there were genuine hardship and difficulty in making payment due to liquidity crunch and the assessee can justify with documentary evidence including books of account the good and sufficient cause for not making payment of admitted tax liability till 20/10/2014 before the Assessing Officer, if matter is restored to the file of the Assessing Officer. 6.2 On the other hand, the Ld. Senior DR relied on the finding of the Assessing Officer that no documentary evidence was filed by the assessee in support of the liquidity crunch. He further submitted that the admitted tax liability was even not paid till the penalty levi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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