IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW
DELHI [THROUGH VIDEO CONFERENCE]

BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER

ITA No. 1746/DEL/2015 [A.Y 2010-11]

Ms. Pallavi Sood Vs. The A.C.I.T
Circle – 32(1)
Y – 72, G.F. Hauz Khas New Delhi

New Delhi

PAN: APUPS 5251 E [Respondent]
[Appellant]

Assessee by : Shri Satyen Sethi, Adv
Revenue by : Shri A.T. Panda, Adv
Shri Atigu Ahmed, Sr. DR

Date of Hearing : 01.12.2020
Date of Pronouncement : 04.12.2020

ORDER

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal by the assessee is preferred against the order of the

CIT(A) – 18, New Delhi dated 26.02.2015 pertaining to A.Y 2010-11.
2. The solitary grievance of the assessee is that the Assessing
Officer erred in levying penalty under section 140A(3) of the Income-
tax Act, 1961 [hereinafter referred to as 'the Act' for short] .

3. Facts on record show that the assessee filed return of income on
26.09.2010, which was subsequently revised on 27.03.2013. As per the
return of income, a sum of Rs. 37,41,574/- has been shown as tax
payable under section 140A of the Act. Since the tax was not paid till
the date of finalisation of assessment under section 143(3) of the Act,
the AO proceeded to levy penalty under section 140A(3) read with
section 221(1) of the Act amounting to Rs. 37,41,574/-.

4. The assessee carried the matter before the CIT(A) but without
any success.

5. Before us, the ld. counsel for the assessee vehemently stated
that the provisions of the Act relating to levy of penalty have been
amended by the Direct Tax Laws Amendment Act, 1989. It is the say of
the ld. counsel that with this amendment, it has been provided in the
Act that any delay in payment of self-assessment tax shall attract
interest and not penalty. Since the A.Y under consideration is 2010–11,
no penalty should have been levied by the Assessing Officer.

6. Per contra, the ld. DR supported the findings of the Assessing
Officer.

7. We have carefully considered the orders of the authorities below.
The relevant paras of the Circular dated 31.10.1989 are as under:

"Para 4.17 : The old provisions of sub-section (3) of the section
provided for levy of penalty for non-payment of self-assessment
tax, since the rate of mandatory interest for failure to pay the tax
has now been increased, it is not necessary to retain this provision
any more. The amending Act has accordingly omitted the said sub
section (3).

4.18 : In order to vest the power of recovery of tax and interest
due under this section on the basis of the return, amending Act
1987, has inserted a new sub section (3) in the section to provide
that if any asses-see has not paid self assessment tax and interest
in full before filing the return, he shall be deemed to be an asses-
see in default in respect of such tax and interest."
Quite clearly, if one is to read the earlier Section 140A(3) of the
Act and the amended section w.e.f. 1.4.1989 along-with the
explanatory notes to the amendment conjointly, it is clear that the
earlier provision prescribing for levy of penalty for default
outlined in Sub-section (1) of Section 140A(3) has yielded place to
mandatory charging of interest for such default. The Heddle
Knowledge Private Ltd. aforesaid legislative intent also gets
strength by the fact that simultaneously the legislature prescribed
for mandatory charging of interest under section 234B of the Act
for default in payment of self-assessment tax w.e.f. 01.04.1989
onwards.”

8. Therefore, considered in the aforesaid light, in our view, the fact
that the amended section 140(3) with effect from 01.04.1989 does not
envisage any penalty for non-payment of self-assessment tax, the
Assessing Officer was not justified in levying the impugned penalty by
making recourse to section 221 of the Act. We, accordingly, direct the
Assessing Officer to delete the penalty imposed under section 140A
read with section 221(1) of the Act.
9. In the result,appeal of the assessee in ITA No. 1746/DEL/2015 is
allowed.

The order is pronounced in the open court on 04.12.2020.

Sd/- Sd/-
[SUDHANSHU SRIVASTAVA] [N.K. BILLAIYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 04th December, 2020 Asst. Registrar,
ITAT, New Delhi
VL/

Copy forwarded to:

1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Date of dictation 01.12.2020

Date on which the typed draft is placed before 03.12.2020

Date on which the typed draft is placed before 03.12.2020

Date on which the approved draft comes to03.12.2020

Date on which the fair order is placed before03.12.2020

Date on which the fair order comes back to 03.12.2020

Date on which the final order is uploaded on 03.12.2020

Date on which the file goes to the Bench Clerk 03.12.2020
Date on which the file goes to the Head Clerk
The date on which the file goes to the

Date of dispatch of the Order