- (1.) As agreed upon by the both learned counsel for the parties, we heard the application as well as the appeal itself on the merits.
(2.) In this appeal, the petitioner has challenged the impugned order dated April 20, 1999. His only grievance is that though the assessee has a case for interim order, but no interim relief has been given to the assessee for stay of recovery of penalty amount imposed by the Assistant Commissioner of Income-tax, vide the order dated March 8, 1999. The assessee had deducted tax from interest other than interest on securities in the financial year 1996-97 and he has deducted tax to the tune of Rs. 9,67,94,972 as T.D.S., but that has not been deposited to the account of the Central Government within the time allowed under the statute. The delay varied from one month to twelve months in respect of different deposits. For that failure on the part of the assessee, the Assistant Commissioner of Income-tax has initiated penalty proceedings under Section 221 of the Income-tax Act. The case was listed 2/3 times. Notice was also served 2/3 times, but none appeared. Only on December 17, 1998, Mr. K.P. Trivedi appeared and furnished a written submission. In short, it reads as under : "We are an investment company engaged primarily in dealing in shares. Last year has been one of the worst years for the share market in India and fall in the value of shares has been unprecedented. This affected even the mighty UTI as we come to know now. The huge loss suffered by us in the share business which was mostly carried out with borrowed funds affected our cash flow position very severely and the lenders who have been financing our business were reluctant to send us any more money. All this had cumulative effect of causing severe constraints."
(3.) The Assistant Commissioner of Income-tax has considered the submissions filed by the assessee and found that T.D.S. deposit has nothing to do with the profit and loss of the company. Similarly, the worst year of the Indian share market has also no connection with the deposits of T.D.S. Finally he imposed the penalty of Rs. 3 crores, under Section 221 of the Income-tax Act, 1961.;