High Court Of Delhi
Rajesh Kumar vs. DCIT
Sections 140A(3), 260A
Asst. Year 1981-82
D.K. Jain & Madan B. Lokur, JJ.
IT Appeal No. 464 of 2003
2nd December, 2003
Counsel Appeared
K.R. Manjani, for the Appellant : R.D. Jolly, for the Respondent
JUDGMENT
D.K. JAIN, J. :
This appeal by the assessee under s. 260 of the IT Act, 1961 (for short “the Act”), is directed against order, dt. 23rd June, 2003, passed by the Tribunal, Delhi Bench, New Delhi, (for short “the Tribunal”), in WTA No.
1144/Del/97, pertaining to the asst. yr. 1981-82. By the impugned order, the Tribunal has upheld the levy of penalty on the assessee under s. 140A(3) of the Act, for failure on his part to pay the self-assessment tax on the basis of the returned income.
2. According to the appellant, the order involves the following substantial question of law : “Whether on the facts and circumstances of the case, the learned Tribunal is correct in sustaining the penalty under s. 140A(3) of IT Act, 1961, and ignoring the Tribunal judgment dt. 14th Dec., 1989 which accepts non-availability of funds with the petitioner.”
3. In support of the appeal, Mr. K.R. Manjani, learned counsel for the appellant, has vehemently submitted that the Tribunal has misdirected itself in basing its decision on an irrelevant fact, namely, that the assessee had not paid the self-assessment tax even after 19 years of the filing of the return. In nutshell, the submission is that once the assessee had failed to deposit the self-assessment tax on account of non-availability of funds, the default, if any, stands concluded there and then and non-payment thereafter is of no consequence. It is, thus, urged that the appeal deserves to be admitted.
4. We are unable to persuade ourselves to agree with learned counsel for the assessee. Though, at the first blush, the argument appears to be attractive but considered in the light of the clear provisions of sub-ss. (1) and (3) of s. 140A of the Act, there is no substance in it.
5. Sub-ss. (1) and (3) of s. 140A of the Act, as substituted by the Taxation Laws (Amendment) Act, 1975 w.e.f. 1st April, 1976, read as follows : “(1) Where any tax is payable on the basis of any return required to be furnished under s. 139 or s. 148, after taking into account the amount of tax, if any, already paid under any provision of this Act, the assessee shall be liable to pay such tax before furnishing the return and the return shall be accompanied by proof of payment of such tax. (3) If any assessee fails to pay the tax or any part thereof in accordance with the provisions of sub-s. (1), the ITO may direct that a sum equal to two per cent of such tax or part thereof, as the case may be, shall be recovered from him by way of penalty for every month during which the default continues : Provided that before levying any such penalty, he shall be given a reasonable opportunity of being heard.” Sub-s. (1) of s. 140A of the Act makes it mandatory for a person to pay, before furnishing the return, the tax on the basis of the return, after taking into account taxes already paid at the time of filing the return. Sub-s. (3) of the section provides for levy of penalty for non-payment of self-assessment tax. From the language of sub-s. (3) it is clear that non-payment of self-assessment tax is a continuing default. The wrong commences from the date of the default and continues from month to month until the compliance is made and the default comes to an end. The rule of de die in diem is applicable on monthly basis. Proviso to sub-s. (3) enjoins on the AO to afford a reasonable opportunity to the assessee of being heard before he decides to impose a penalty. It is at this stage the assessee can show a cause for the non-payment of the tax. Thus, on a plain reading of the provision, the ingenious argument of learned counsel for the assessee that once the assessee had failed to deposit the self-assessment tax on account of financial constraints this default was complete and non-payment thereafter was of no consequence is ex facie without any substance. As regards the question whether the non-payment of tax stems from a reasonable cause or not, it is purely a question of fact. The Tribunal has found that a bare statement by the assessee that he did not have sufficient funds to make payment towards self-assessment tax, could not be believed as non-payment for 19 years was highly improbable for not arranging the funds. We also find that the CIT(A), while confirming the levy of penalty, had observed that two show-cause notices were issued to the assessee before levy of penalty but these evoked no response from the assessee. It was before the CIT that the assessee had taken the plea that he did not have the liquid funds to pay the tax. Be that as it may, as noted supra, the question whether on the facts and circumstances of the case, there was a reasonable cause for non-payment of tax is essentially a question of fact. The impugned order does not involve any question of law, much less a substantial question of law. Accordingly, we decline to entertain the appeal. Dismissed.
[Citation : 271 ITR 494]
