Keota Brick Field (P) Ltd., Hooghly V. ACIT, CIR-1, HOOGHLY, Hooghly

ITA 221/KOL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4972 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-03-2015
• Court: TRIBUNAL
• Department Lawyers: MD GAYAS UDDIN
• Keywords: Reasonable cause
• Section: 143(3); 142(1); 133A

Judgement Text

I.T.A. NO. 221/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA SMC BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 221/KOL/ 2015 ASSESSMENT YEAR: 2009-2010 KEOTA BRICK FIELD PVT. LIMITED,.................... ......................APPELLANT KEOTA KUTTALA, P.O. SAHAGANJ, P.S. CHINSURAH, DIST. HOOGHLY -712 104 [PAN : AACCK 1258 K] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. ............RESPONDENT CIRCLE-1, HOOGHLY, AAYAKAR BHAWAN, G.T. ROAD, KHADINA MORE, P.O. CHINSURAH, P.S. CHINSURAH, DIST. HOOGHLY-712 101 APPEARANCES BY: SHRI SOMNATH GHOSH, ADVOCATE, FOR THE ASSESSEE MD. GAYAS UDDIN, JCIT, SR. D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : FEBRUARY 15, 2016 DATE OF PRONOUNCING THE ORDER : MARCH 02, 2016 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST TH E ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-VI, KOLKATA DA TED 11.02.2015 FOR THE ASSESSMENT YEAR 2009-10, WHEREBY HE CONFIRMED T HE PENALTY OF RS.2,00,000/- IMPOSED BY THE ASSESSING OFFICER UNDE R SECTION 221 OF THE INCOME TAX ACT, 1961 FOR THE DEFAULT ON THE PART OF THE ASSESSEE IN PAYMENT OF SELF-ASSESSMENT TAX. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS CARRYING ON ITS BUSINESS IN BRICK FIELD. A SURVEY UNDER SECTION 133A WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE ON 25.02.2 009. THEREAFTER NOTICES UNDER SECTION 143(2) AND 142(1) WERE ISSUED BY THE ASSESSING I.T.A. NO. 221/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 5 OFFICER, BUT THERE WAS NO COMPLIANCE ON THE PART OF THE ASSESSEE TO THE SAID NOTICES. THEREAFTER THE RETURN OF INCOME FOR T HE YEAR UNDER CONSIDERATION WAS FINALLY FILED BY THE ASSESSEE ON 31.12.2011, I.E. THE LAST DATE ON WHICH THE ASSESSMENT FOR THE YEAR UNDER CON SIDERATION WAS LIABLE TO BE COMPLETED BY THE ASSESSING OFFICER, DECLARING TOTAL INCOME OF RS.12,94,500/-. IN THE ASSESSMENT COMPLETED UNDER S ECTION 143(3) VIDE AN ORDER DATED 31.12.2011, THE INCOME DECLARED BY T HE ASSEESSEE WAS ACCEPTED BY THE ASSESSING OFFICER. HE, HOWEVER, NOT ICED THAT THE SELF- ASSESSMENT TAX PAYABLE BY THE ASSESSEE ON THE INCOM E RETURNED WAS NOT PAID TO THE EXTENT OF RS.2,00,000/-. HE, THEREFORE, INITIATED PENALTY PROCEEDINGS UNDER SECTION 221 OF THE ACT AND IMPOSE D MAXIMUM PENALTY OF RS.2,00,000/- BEING 100% OF THE TAX NOT PAID. 3. THE PENALTY IMPOSED BY THE ASSESSING OFFICER UND ER SECTION 221 WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED THAT THE DIRECTORS O F THE ASSESSEE- COMPANY WERE IGNORANT OF THE NICETIES OF THE MATTER , WHICH MADE IT IMPOSSIBLE FOR THEM TO ENSURE COMPLIANCE WITH THE S TATUTORY REQUIREMENTS IN THE TEETH OF WRONG ADVICE GIVEN TO THEM. THIS EXPLANATION OF THE ASSESSEE, HOWEVER, WAS NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) IN THE ABSENCE OF ANY SUPPORTING EVIDE NCE FILED BY THE ASSESSEE TO SUPPORT AND SUBSTANTIATE THE SAME. IN S UPPORT, HE ALSO RELIED ON THE DECISION OF THE HONBLE KERALA HIGH COURT IN THE CASE OF RIVER VIEW BAR & SILVER RESTAURANT VS.- CIT (CENTRAL), KOCHI REPORTED IN 211 TAXMAN 187 (2012), WHEREIN A SIMILAR EXPLANATION OFFERED B Y THE ASSESSEE WAS NOT ACCEPTED BY THEIR LORDSHIPS. IT WAS ALSO CONTEN DED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS) THAT IT DID NO T HAVE ANY LIQUIDITY TO PAY THE SELF-ASSESSMENT TAX AT THE RELEVANT TIME. I N THIS REGARD, THE LD. CIT(APPEALS) NOTED THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO PROVE ITS CASE THAT IT COULD NOT PAY THE SELF-ASSES SMENT TAX DUE TO LIQUIDITY PROBLEM BY PRODUCING THE RELEVANT DOCUMEN TARY EVIDENCE. HE, THEREFORE, PROCEEDED TO CONFIRM THE PENALTY OF RS.2 ,00,000/- IMPOSED BY I.T.A. NO. 221/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 5 THE ASSESSING OFFICER UNDER SECTION 221 OF THE ACT. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE MAINLY REITERAT ED BEFORE ME THE SUBMISSIONS MADE BEFORE THE LD. CIT(APPEALS) IN SUP PORT OF THE ASSESSEES CASE THAT THERE WAS A SUFFICIENT OR REASONABLE CAUS E FOR THE DEFAULT ON THE PART OF THE ASSESSEE IN PAYMENT OF SELF-ASSESSMENT TAX. HE ALSO RELIED ON SOME JUDICIAL PRONOUNCEMENTS IN SUPPORT OF THE ASSE SSEES CASE ON THIS ISSUE. HE ALSO CONTENDED THAT THE ASSESSEE HAVING P AID THE TAX ON 21.03.2012, I.E. WITHIN THREE MONTHS FROM THE DATE OF FILING OF THE RETURN, THE MAXIMUM PENALTY OF RS.2,00,000/- IMPOSED BY THE ASSESSING OFFICER AT 100% OF THE PAYMENT IN DEFAULT IS EXCESSIVE AND UNREASONABLE. 5. THE LD. D.R., ON THE OTHER HAND, STRONGLY SUPPOR TED THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) CONFIRMING THE PENALT Y IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 221. HE CONTENDED T HAT THE EXPLANATION OFFERED BY THE ASSESSEE AS REGARDS WRONG ADVICE AND ADVERSE LIQUIDITY POSITION FOR THE DEFAULT IN PAYMENT OF SELF-ASSESSM ENT TAX IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE AND THE LD. C IT(APPEALS), THEREFORE, HAS RIGHTLY REJECTED THE SAME. AS REGARD S THE QUANTUM OF PENALTY IMPOSED BY THE ASSESSING OFFICER AT 100% OF THE PAYMENT IN DEFAULT, HE CONTENDED THAT THE ASSESSEE ALL THROUGH OUT REMAINED NON- COOPERATIVE AND NON-COMPLIANT AS POINTED BY THE ASS ESSING OFFICER IN THE ASSESSMENT ORDER AND KEEPING IN VIEW THIS ATTITUDE AND CONDUCT OF THE ASSESSEE, PENALTY IMPOSED BY THE ASSESSING OFFICER AT 100% OF THE PAYMENT IN DEFAULT IS FULLY JUSTIFIED. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS REGARDS T HE IGNORANCE OF THE RELEVANT PROVISIONS AS PLEADED ON BEHALF OF THE ASS ESSEE BEFORE THE LD. CIT(APPEALS) AS WELL AS BEFORE ME AS SUFFICIENT OR REASONABLE CAUSE, IT IS OBSERVED THAT THE ASSESSEE IS A COMPANY INCORPORATE D IN THE YEAR 1995. IT I.T.A. NO. 221/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 5 IS REGULARLY ASSESSED TO INCOME-TAX AND KEEPING IN VIEW THE FACT THAT IT NORMALLY GETS ASSISTANCE FROM THE AUDITORS AS WELL AS TAX CONSULTANTS, IT IS DIFFICULT TO ACCEPT THAT THE MANAGEMENT OF THE ASSE SSEE-COMPANY WAS NOT AWARE OF THE STATUTORY REQUIREMENT TO PAY SELF-ASSE SSMENT TAX BEFORE FILING THE RETURN OF INCOME, EVEN AFTER HAVING INEX ISTENCE FOR MORE THAN TEN YEARS. MOREOVER, AS RIGHTLY HELD BY THE LD. CIT (APPEALS), THE CASE OF THE ASSESSEE-COMPANY OF WRONG ADVICE GIVEN TO IT OR ADVERSE LIQUIDITY POSITION AT THE RELEVANT TIME TO JUSTIFY THE DEFAUL T IN PAYMENT OF SELF- ASSESSMENT TAX IS NOT SUPPORTED BY ANY DOCUMENTARY EVIDENCE. IN ALL THESE FACTS AND CIRCUMSTANCES OF THE CASE, THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE CANNOT BE OF ANY HELP TO T HE ASSESSEE AND THE ASSESSEE-COMPANY, IN MY OPINION, IS LIABLE TO PAY P ENALTY UNDER SECTION 221 HAVING FAILED TO ESTABLISH ANY SUFFICIENT OR RE ASONABLE CAUSE FOR THE DEFAULT IN PAYMENT OF SELF-ASSESSMENT TAX. HOWEVER, KEEPING IN VIEW THAT SUCH DEFAULT HAS BEEN MADE GOOD BY THE ASSESSEE WIT HIN A PERIOD OF LESS THAN THREE MONTHS BY PAYING THE ENTIRE OUTSTANDING TAX OF RS.2,00,000/- FROM THE DATE OF FILING OF THE RETURN, I AM OF THE VIEW THAT THE QUANTUM OF PENALTY IMPOSED BY THE ASSESSING OFFICER AND CONFIR MED BY THE LD. CIT(APPEALS) AT 100% OF THE PAYMENT IN DEFAULT IS H IGHLY EXCESSIVE AND UNREASONABLE AND IT WOULD BE FAIR AND REASONABLE TO RESTRICT THE SAME TO 10% OF THE PAYMENT IN DEFAULT. ACCORDINGLY, I MODIF Y THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) AND SUSTAIN THE PENALTY OF RS.2,00,000/- IMPOSED UNDER SECTION 221 TO THE EXTENT OF RS.20,000/-. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MARCH 02, 20 16. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 2 ND DAY OF MARCH, 2016 COPIES TO : (1) M/S. KEOTA BRICK FIELD PVT. LIMITED, C/O. S.N. GHOSH & ASSOCIATES, ADVOCATES, SEVEN BROTHERS LODGE, P.O. BUROSHIBTALA, P.S. CHINSURAH, DIST. HOOGHLY-712 105 I.T.A. NO. 221/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 5 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, HOOGHLY, AAYAKAR BHAWAN, G.T. ROAD, KHADINA MORE, P.O. CHINSURAH, P.S. CHINSURAH, DIST. HOOGHLY-712 101 (3) COMMISSIONER OF INCOME-TAX (APPEALS)-6, KOLKAT A (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.