Nayab Ahmed , Ghaziabad vs Assessee

Appellant by : Shri Sanjeev Jain, CA. Respondent by : Shri P. Dam Kanunjha, Sr.DR.

Date of hearing : 11.03.2015 Date of pronouncement : 01.04.2015

ORDER

PER G.C. GUPTA, GUPTA, VP :

This appeal by the assessee for the AY 2008-09 is directed against the order of learned CIT(A), Ghaziabad dated 4th March, 2013.

2. The grounds of appeal of the assessee are as under:-

"1. That the learned CIT(Appeals) has erred in upholding the penalty amounting to Rs.64,845/- levied by the Assessing Officer u/s 221(1) of the Act.

2. That the learned CIT(Appeals) has erred in failing to appreciate that the amount of tax and interest payable by the assessee u/s 140A of the Act stood paid by the assessee on 17.11.08 prior to initiation of penalty proceedings u/s 221(1) of the Act and that the assessee could not be said to be an assessee in default at the time of initiation of penalty proceedings u/s 221(1) of the Act."

2 ITA-3698/Del/2013

3. The learned counsel for the assessee submitted that the penalty under Section 221(1) of the Income-tax Act, 1961 was levied on the assessee for no fault of the assessee. He submitted that the return of income for the relevant assessment year 2008-09 was filed on 26.09.2008 and the total tax payable along with interest due was paid voluntarily on 17.11.2008 at `66,142/-. He submitted that the payment was made within a period less than two months from the date of filing of the return and much before the initiation of penalty proceedings under Section 221(1) of the Act and, therefore, the assessee could not be said to be in default at the time of initiation of penalty proceedings under Section 221(1) of the Act. He submitted that the Assessing Officer has levied penalty at 100% of the tax and interest due on the filing of the return by the assessee.

4. Learned DR has opposed the submissions of the learned counsel for the assessee. He submitted that the fact of payment of tax with interest within two months of the filing of the return should be verified by the Assessing Officer. He has relied on the order of the Assessing Officer and the CIT(A).

5. We have considered the submissions of both the sides and perused the order of the Assessing Officer and the CIT(A). We find that the return of income for the relevant assessment year 2008-09 was filed by the assessee on 26.09.2008 and tax along with interest was paid voluntarily by the assessee on 17.11.2008, i.e., within a period of less than two months from the date of filing of the return in this case. The penalty proceedings under Section 221(1) of the Act were initiated much after the payment of tax by the assessee. The Assessing Officer has levied tax at the rate of 100% of the tax and interest due in this case. In the facts of the case, we are of the considered view that the 3 ITA-3698/Del/2013

conduct of the assessee was not mala fide and the levy of penalty at maximum rate of 100% of the tax due by the Assessing Officer could not be sustained. Merely because the assessee could not give an explanation, it could not be said that it should be held liable for levy of penalty under Section 221(1) of the Act. In the facts of the case, we are of the considered view that it is not a fit case for levy of penalty under Section 221(1) of the Act and, accordingly, the penalty levied amounting to `64,845/- is cancelled and the grounds of appeal are allowed.

6. In the result, the appeal of the assessee is allowed.

Decision pronounced in the open Court on 1st April, 2015.

Sd/- Sd/- (T.S. KAPOOR) KAPOOR) (G.C. (G.C. GUPTA) GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT

VK.

Copy forwarded to: -

1. Appellant : Shri Nayab Ahmed, C/o Amar Bharat Fruit Co.,

Subzi Mandi, Sahibabad, Uttar Pradesh.

2. Respondent : Income Tax Officer, Ward-

Ward-1(4), Ghaziabad, Uttar Pradesh.

3. CIT

4. CIT(A)

5. DR, ITAT

Assistant Registrar