P.SHANMUGAPRIYA,COIMBATORE vs. ACIT CENTRAL CIRCLE 2, COIMBATORE

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ITA 2285/CHNY/2018Status: DisposedITAT Chennai06 February 2020AY 2012-133 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay, finding reasonable cause for the delay in payment of taxes. It held that no penalty could be levied under the second proviso to Section 221 of the Act as there was a justifiable cause for non-payment.

What were the facts?

The assessee filed an appeal with a delay of 191 days due to financial crunch and inability to pay taxes within the prescribed time. The Department had not initiated recovery proceedings as the assessee had no assets or bank accounts.

What were the issues?

Whether penalty under Section 221(1) is justified when there is a reasonable cause for non-payment of taxes due to financial hardship.

Which sections of the Income-tax Act were involved?

Section 221(1),Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI,

Before: SHRI N.R.S. GANESAN & SHRI S. JAYARAMAN

Pronounced: 06.02.2020

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals)-18, Chennai dated 24.11.2017 confirming penalty levied u/s.221(1) of the Income Tax Act, 1961 (in short ‘’the Act’’) and pertains to the assessment year 2012-2013.

2.

There is a delay of 191 days in filing the appeal before this Tribunal.

The assessee has filed petition for condonation of delay. Having heard the Ld. Representative for the assessee and the Ld.DR, this Tribunal finds that there was reasonable cause on the part of t he assessee for not filing the appeal before the stipulated time. Therefore, the delay of 191 days is condoned and the appeals is admitted.

3.

Shri. B. Ramakrishnan, Ld. Representative for the assessee submitted that the assessee could not pay the taxes levied by the Assessing Officer within the prescribed time due to financial crunch. The Ld. Representative further submitted that since assessee has no asset or bank account, the Department has not taken any action to attach the same. Therefore, there was reasonable cause as provided in second proviso to Section 221 of the Act.

Hence levy of penalty is not justified and assessee had also paid the entire tax on 05.02.2020.

4.

On the contrary, Shri Pavitran Kumar, the Ld. Departmental Representative submitted that the Assessing Officer passed order u/s.144 of the Act for non co-operation of the assessee. From the very beginning the assessee has not co-operated with the Department and taxes were also not paid inspite of repeated letters. Therefore, the AO was forced to levy penalty u/s.221(1) of the Act.

5.

Having heard the Ld. Representative and the Ld. Departmental Representative, this Tribunal is of the considered opinion that there was justifiable cause for not paying the taxes within the prescribed time. The very fact that the Department has not initiated any proceedings for recovery of tax indicates that the assessee has no means to pay the tax. To born in the land of daridranarayanan as the poor is not a fault at all. Therefore no penalty could be levied in view of second provisio to Section 221 of the Act. Accordingly, orders of both the authorities below are set aside and the penalty levied by the AO as confirmed by the CIT (A) is deleted.

6.

In the result, the appeal filed by the assessee in 2012-2013 is allowed.

Order pronounced in the open court on 6th February, 2020 at Camp at Coimbatore.

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