Income Tax assessee in default- urgent

This query is : Resolved

Mahesh (Querist)
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27 March 2008 Sir,

1) The assessee is a registered firm engaged into the business of construction of residential and commercial premises and also holding a two star hotel.
2) Due to financial indebtedness it has almost closed the business. Most of the properties are either auctioned or attached by the banks and financial institutions
3) It has filed its returns for A.Y. 2004-05 and 2005-06 on 31/3/2006 declaring the losses of Rs. 24 Lacs and Rs. 18 Lacs.
4) Out of the above return for AY 2004-05 was selected for scrutiny. The assessee (Managing Partner) being in financial and consequently mental trouble failed to respond to the notices.
5) Best judgement assessment was made and tax liability of Rs 15 Lacs was determined. No apeal was filed within time permitted.
6) TRO had started the recovery process and considering the facts of the case had given the concession to make the monthly payment of Rs. 25000/- most of which are paid by the assessee regularly.
7) A order imposing penalty @ 300% is also passed by the AO.
8) What are the remedies available now at this stage with the assessee.
9) Can a penalty be imposed against the additions made at random during the best judgement assessment.

Thanks in advance.

Late CA Sampat Jain

Late CA Sampat Jain (Expert)
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28 March 2008 The remedy against the penalty order was to file an appeal against the same . It appears that you have not filed any appeal against the same. Then the order of penalty has attained finality.

DEPENDING ON FACTS OF YOUR CASE , IF YOU CAN PROVE REASONABLE CAUSE FOR DELAY IN FILING APPEAL , YOU MAY FILE APPEAL AND GET DELAY CONDONED . ONCE THE DELAY IS CONDONED AND APPEAL IS ADMITTED , YOU MAY PURSUE YOUR CASE IN APPEAL AND THEREAFTER.

MOREOVER SEE THE POSSIBILITY OF FILING A PETITION FOR WAIVER OF INTEREST.