Law:

Section:

Section 221 of the Income-tax Act, 1961 - Collection and recovery of tax - Penalty payable when tax in default - Assessment years 1982-83 and 1983-84 - Whether assessee having failed to comply with provisions of TDS would be liable to penalty under section 221, notwithstanding fact that TDS and interest, if any accrued thereon, have been paid prior to initiation of penalty proceeding - Held, yes Section 221, read with section 201, of the Income-tax Act, 1961 - Collection and recovery of tax - Penalty payable when tax in default - Assessment years 1982-83 and 1983-84 - Assessee having failed to comply with provisions regarding TDS, penalty was levied upon it under section 221 - However, on appeal, Tribunal set aside penalty on grounds, that ITO's discretion to levy penalty had not been fairly exercised; and that no penalty could be levied for non-filing of Form No. 26C - Whether even though no penalty is leviable under section 221(1) for not furnishing Form No. 26C, yet since in instant case penalty proceedings were initiated for violation of provisions of section 201(1), Tribunal had misdirected itself on that issue - Held, yes - Whether, however, Tribunal's findings, that ITO's discretion to levy penalty on assessee had not been fairly exercised, being based on appreciation of evidence and material on record, could not be interfered with and, therefore, penalty was rightly deleted by Tribunal - Held, yes FACTS The assessee had failed to comply with the provisions regarding TDS in respect of the amount paid to various contractors during the relevant years. Therefore, the ITO levied penalty on it under section 221. On appeal, the AAC partly allowed the appeal. On the second appeal, the Tribunal cancelled the penalty levied by the ITO in its entirety, holding that as the assessee had paid tax and interest thereon on his own without any action or threat of action by the ITO, penalty could not be properly levied; that the ITO's discretion to levy penalty on the assessee had not been fairly exercised; and that the ITO had initiated action not because the tax was not paid, but because Form No. 26C was not submitted and in view of the Tribunal, no penalty could be…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492