Tribunal held that the assessee could not pay the self-assessment tax liability of Rs. 8,06,90,485/- at the time of filing the return. However the self-assessment tax was paid subsequently in instalments over a period of time. The assessee had given very elaborate reasons before the authorities that due to huge financial crunch and hardships, it did not have any liquidity to pay the self-assessment tax. Financial stringency is considered to be good and sufficient cause for not levying penalty under section 221(1). (AY.2007-08 )
Dy. CIT v. Tulip Star Hotels Ltd. (2019) 73 ITR 694 (Delhi)(Trib.)
S. 221 : Collection and recovery–Penalty-Tax in default-assessee filing return without payment of self-assessment tax-financial constraint and liquidity crunch faced by assessee at time of filing of return-good and sufficient reason for failure – Levy of penalty is held to be not justified.[S. 140A]