PAMWI TISSUES LTD, MUMBAI V. ACIT RG 8(2), MUMBAI

ITA 23/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 1729 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-06-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 02-01-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIRENDRA OJHA
• Keywords: Reasonable cause; Non compliance
• Section: 273B; 142(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C : MUMBAI BEFORE SHRI D.K. AGARWAL, (JM) AND SHRI PRAMOD KUM AR ,(AM) ITA NO.23/MUM/2009 ASSESSMENT YEAR : 2004-05 M/S. PAMWI TISSUES LIMITED C/O., V.B. GOYAL & CO. 102, UNIQUE TOWER, OFF S.V. ROAD, GOREGAON (W) MUMBAI-400 062. ..( APPELLANT ) P.A. NO. (AABCP 1946 J) VS. DY. COMMISSIONER OF INCOME TAX -8(2) MUMBAI. ..( RESPONDENT ) APPELLANT BY : MS. AARTI SATHE RESPONDENT BY : SHRI VI RENDRA OJHA O R D E R PER D.K. AGARWAL (JM). THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 15.10.2008 PASSED BY THE LD. CIT(A) FOR T HE ASSESSMENT YEAR 2004-05. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY FILED RETURN DECLARING TOTAL LOSS AT RS.8,15,24,067/-. THE ASSESSING OFFICER SELECTED THE CASE FOR SCRUTINY AND ACCORDINGLY HE ISSU ED NOTICE U/S.143(2) REQUIRING THE ASSESSEE TO ATTEND THE OFFICE ON 17.7.2006 AT 3.30 P.M. IN RESPONSE NEITHER ANY PERSON FROM THE ASSESSE E COMPANY ITA NO.23/M/09 A.Y:04-05 2 ATTENDED NOR ANY REPLY WAS FURNISHED. FURTHER, A LE TTER DATED 03.07.06 WAS ISSUED CALLING FOR CERTAIN DETAILS U/S.142(1) OF THE ACT. TO THIS LETTER ALSO, THE ASSESSEE COMPANY HAS NOT RESPONDED . IN THE ABSENCE OF ANY RESPONSE, THE ASSESSING OFFICER VIDE LETTER D ATED 8.9.2006 ASKED THE ASSESSEE AS TO WHY PENALTY U/S.271(1)(B ) OF THE ACT FOR NON-ATTENDANCE/NON COMPLIANCE TO THE NOTICES ISSUED U/S.143(2) AND 142(1) OF THE ACT SHOULD NOT BE LEVIED . IN THE ABSENCE OF ANY COMPLIANCE THE ASSESSING OFFICER IMPOSED PENA LTY OF RS.20,000/- BEING RS.10,000/- FOR EACH FAILURE, VIDE O RDER DATED 9.10.2006 PASSED U/S.271(1)(B) OF THE ACT. ON APPEAL, BEFORE THE LD. CIT(A) IT WAS CONTENDED BY THE ASSESSEE THAT THE COMPANY W AS TAKEN OVER BY THE PRESENT MANAGEMENT LED BY SHRI PREMCHAND GOYAL AND SINCE HE IS BASED AT CHANDIGARH, COULD NOT ATTEND TO ANY COMMUNICATION FROM THE DEPARTMENT AND THERE WAS NO PR OPER PERSON FOR COMPLIANCE OF THE NOTICES AND FURTHER THE COMPANY HA S BEEN DECLARED AS A SICK UNIT BY BIFR. THE LD. CIT(A), HOWE VER, WHILE AGREEING WITH THE FINDING OF THE ASSESSING OFFICER CONFIR MED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. 3. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) T HE ASSESSEE IS IN APPEAL BEFORE US TAKING FOLLOWING GROUNDS OF APPEAL : - ITA NO.23/M/09 A.Y:04-05 3 1. THE PENALTY ORDER U/S.271(1)(B) OF THE INCOME TAX ACT, 1961 MAY KINDLY BE SET ASIDE, AS THE COMPA NY IS SICK UNIT BY BIFR ORDER DATED 15.12.2003. 2. THE COMPANY IS FACING HEAVY FINANCIAL LIABILIT IES AND PRACTICALLY ON THE VERGE OF THE LIQUIDATION, AS BUSINESS ACTIVITIES OF MUMBAI OFFICE IS COMPLETELY CLOSED. 4. AT THE TIME OF HEARING THE LD. COUNSEL FOR THE A SSESSEE WHILE REITERATING THE SAME SUBMISSIONS AS SUBMITTED BEFORE THE L D.CIT(A) FURTHER SUBMITS THAT SINCE NO COMMUNICATION WAS RECEIVED BY THE PRESENT MANAGEMENT BASED AT CHANDIGARH AND KEEPING IN VIEW THAT THE COMPANY IS FACING HEAVY FINANCIAL LIABILITIES AND PRACTICALLY IS ON THE VERGE OF LIQUIDATION AS BUSINESS ACTIVITIES OF MUMBAI OFFICE IS COMPLETELY CLOSED AND THE COMPANY HAS BEEN DECLARED AS SICK UNIT BY BIFR, THE PENALTY IMPOSED BY THE ASSESSING OFFICER AND SU STAINED BY THE CIT(A) BE DELETED. 5. ON THE OTHER HAND THE LD. DR SUPPORTS THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE RI VAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS THE CONSISTENT STAND TAKEN BY THE ASSESSEE THAT THE COMPANY WAS TAKEN OVER BY THE PRESENT MANAGEMENT OF SHRI PREMCHAND GOY AL, BASED AT CHANDIGARH AND THE ASSESSEE COULD NOT ATTEND ANY COMMUNICA TION FROM THE DEPARTMENT AS THERE WAS NO PROPER PERSON FOR COMPLIANCE OF ITA NO.23/M/09 A.Y:04-05 4 THE NOTICES AND FURTHER THE COMPANY HAS BEEN DECLARED AS SICK UNIT BY BIFR. HOWEVER, THE LD. CIT(A) WITHOUT ANY VALID REA SON WHILE REJECTING THE ASSESSEE'S SUBMISSION HAS CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. SINCE THE REVENUE HAS FAILED TO CONTROVE RT THE ASSESSEE'S SUBMISSION EVEN AT THIS STAGE AND KEEPING IN VIE W THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT THERE WAS A REASONABLE CAUSE IN TERMS OF SECTION 273B OF THE ACT AND ACCORDINGLY THE PENALTY OF RS.20,000/- IMPOSED BY T HE ASSESSING OFFICER AND SUSTAINED BY THE LD. CIT(A) IS DELETED. THE GROUNDS TAKEN BY THE ASSESSEE ARE, THEREFORE, ALLOWED. 7. IN THE RESULT, ASSESSEE'S APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.6.2010. SD/- SD/- (PRAMOD KUMAR) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 11.6.2010. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.