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Section 140A of the Income-tax Act, 1961 - Assessment - Self-assessment - Assessment year 1983-84 - Whether if in a given case, assessee shows sufficient cause for non-payment of tax within time stipulated, it is open to assessing authority to waive levy of penalty - Held, yes - Whether, therefore, penalty is not an automatic consequence of a default, but it will follow only in event of assessee's failing to show a reasonable cause for non-payment of tax as required by section 140A - Held, yes FACTS The assessee filed a return of income declaring its total income. It paid a part of the advance tax on the due date. However, the balance had not been paid within the period of time as required under section 140A. The Assessing Officer issued a show-cause notice, to which there was no response. Therefore, the Assessing Officer held that the assessee had no explanation to offer and proceeded to levy penalty under section 140A. On appeal, the Commissioner (Appeals) confirmed the levy of penalty. In second appeal, the assessee submitted copy of waiver petition wherein it was contended that the assessee delayed the payment due to financial crisis that was existing at that time on account of cylone in Andhra Pradesh and drought situation in certain areas of Karnataka where the business of the assessee was concentrated and; there had been a steep fall in the sales in Andhra Pradesh due to severe cyclone devastating agricultural crops which resulted in poor recoveries from the consumers of the area. The assessee, accordingly pleaded that there was no deliberate or wilful intention on the part of the assessee for denying payment of advance tax. The Tribunal after going through the reasons given in the waiver petition held that there was reasonable cause on the part of the assessee in delaying the payment of advance tax. However, on the ground that section 140A(3) did not show any leniency for the assessee having reasonable cause for the delay in payment of the advance tax, upheld the levy of penalty under section 140A(3). On reference : HELD In the light of the language employed in section 140A and the various s, it is clear that though section 140A uses the word 'shall',…

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