I-T - When Revenue has shown benevolence in granting payment of tax dues in instalments, if assessee misses instalments, it is a fit case for launching prosecution: HC
By TIOL News Service
CHENNAI, FEB 27, 2018: THE issue is - Whether when the Revenue has shown benevolence in granting payment of tax dues in instalments, if the assessee misses the instalments, it is a fit case for launching prosecution. YES is the answer.
Facts of the case:
The Assessee, an educational institution offering various courses, had filed its return for the relevant AY. In the course of assessment proceeding, the Revenue noted that the Assessee had oustanding tax dues and the same was not remitted. In response, the Assessee expressed their difficulties for deposit, on which the Revnue permitted them to clear the outstanding in monthly instalments. However, the Assessee failed to stick to the instalment scheme. Consequently, the Revenue initiated a prosecution against the Assessee by imposing interest for the belated payment as per sec 201(1A).
High Court held that,
++ it is seen that the Assessee expressed their difficulties to the Department and the Department had been benevolent and had granted indulgence to the Assessee by permitting the Assessee to clear the outstanding in ten monthly instalments subject to payment of interest chargeable u/s 220(2). The instalments become due on the 10th of every month. The communication by the Revenue also states that any failure to adhere to the instalment scheme should result in cancellation of the scheme and coercive steps for recovery of tax demand would be initiated;
++ it is admitted that Assessee has paid only Rs. 3 lakhs and defaulted in payment of monthly instalments. Therefore, the indulgence shown by the Department vide its communication does not, any longer, appear to enure to the benefit of the Assessee. Hnece, there is no error in the communication so challenged, which is one more opportunity granted to the Assessee. The Department has rightly initiated prosecution and it appears that the Assessee has challenged the same on certain technical grounds.
(See 2018-TIOL-347-HC-MAD-IT)
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