1. In this revenues appeal, the agitation is that the Deputy Commissioner of Income-tax (Appeals) Amritsar Range, Amritsar, hereinafter referred as the Dy. CIT (A), whose order dated 31-10-1988 in respect of assessment year 1978-79 is brought in appeal, erred in cancelling penalty of Rs. 10,140, which was imposed by the ITO, B-Ward, Batala under section 140A (3) of the Income-tax Act, 1961, hereinafter referred as the Act. The contention projected is that the Dy. CIT (A) failed to appreciate that payment under section 140A (3) of the Act was due in relation to return of income of Rs. 75,420 submitted on 31-7-1978 whereas payment was made only on 28-3-1985 in relation to revised return submitted on 4-3-1985 offering taxable income of Rs. 73,387. - (1.)
(2.) In this case admittedly the assessee filed a return as stated above on 31-7-1978 and no tax under section 140A (3) of the Act was paid as statutorily provided on 24-2-1983, an ex parte assessment under section 144 of the Act was framed determining taxable income of Rs. 3,16,350 which apparently came to be cancelled because as per some settlement with the Department the assessee furnished taxable return of Rs. 73,387 on 4-3-1985 and on 6-3-1985 the income offered in the return of 4-3-1985 came to be accepted. Before the ITO in the only reply filed it was claimed by the assessee that it had deposited a sum of Rs. 2,875 as advance tax and that since in the ex parte assessment under section 144 of the Act framed on 24-2-1983 no notice under section 140A (3) of the Act was directed to be issued no penalty, no penalty was leviable. Alternatively, it was also claimed that the default had been committed on account of non-availability of funds and non-recovery from the third parties.
(3.) THE ITO repelling the assessees contention stated as a fact in his order dated 12-12-1986, which was not even sought to be controverted either before the Dy. CIT (A) or before me, that no payment of Rs. 2,875 as claimed had been made and further, there was only vague averment made without any supporting evidence that the assessee lacked availability of funds for such a long period. THE result was imposition of penalty of Rs. 10,140 for 78 months default on the due tax of Rs. 7,260 in relation to the returned income of Rs. 75,420 in the status of registered firm.;