DISTINCTIVE REALTY P.LTD, MUMBAI V. ITO WD 1(1)(4), MUMBAI

ITA 2301/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8678 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 12-05-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 22-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWA
• Keywords: Opportunity of being heard; Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 2301/MUM/2013 ASSESSMENT YEAR: 2011-12 M/S. DISTINCTIVE REALTY PVT. LTD. VS. ITO WD 1(1)( 4) 317 3 RD FLOOR RAHEA CHAMBERS ROOM NO. 534/579, 5 TH FLOOR FREE JOURNAL MARG, NARIMAN POINT M.K. ROAD, MUMBAI 400021 MUMBAI - 400020 PAN NO. AADCD1410B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PAVAN VED, AR REVENUE BY: SHRI SWAPAN KUMAR BEPARI, DR DATE OF HEARING : 18/0 1/2017 DATE OF PRONOUNCEMENT: 27/01/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVA NT ASSESSMENT YEAR IS 2011-12. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS) 1, MUMBAI AND ARISES OUT O F ORDER U/S 221(1) OF THE INCOME TAX ACT 1961, (THE ACT). 2. THERE HAS BEEN A DELAY OF 43 DAYS IN FILING THE APPEAL BY THE ASSESSEE-COMPANY. THE LEARNED COUNSEL OF THE ASSESS EE SUBMITS THE RELEVANT FACTS LEADING TO THE ABOVE DELAY AND REQUE STS FOR ITS CONDONATION. AS THE CAUSE FOR DELAY IN FILING THE A PPEAL IS GENUINE, WE FOLLOW THE DECISION IN THE CASE OF COLLECTOR, LAND ACQUISITIN VS. MST. KATIJI & ORS . (167 ITR 471); N. BALAKRISHNAN VS. M. RAMAMURTHY [(1998) 7 (SC) 123] AND CONDONE THE DELAY IN FILING THE APPEAL. ITA NO. 2301/MUM/2013 2 3. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER:- I. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN UP HOLDING THE ORDER PASSED BY THE ASSESSING OFFICER ON 31.01.2012 U/S 22 1(1) OF THE ACT, WHICH WAS INVALID AND BAD IN LAW. II. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN SU STAINING THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY U/S 221(1) OF THE ACT AMOUNTING TO RS. 24,72,184/-. III. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) O UGHT TO HAVE REDUCED THE QUANTUM OF INTEREST LEVIED U/S 221(1) OF THE ACT AS IT IS ON THE HIGHER SIDE. 4. BRIEFLY STATED, THE FACTS ARE THAT THE ASSESSEE- COMPANY FILED ITS RETURN OF INCOME FOR THE A.Y. 2011-12 ON 30.09.2011 . THE ASSESSING OFFICER (AO) NOTICED THAT THE ASSESSEE HAD NOT PAID THE SELF- ASSESSMENT TAX OF RS. 1,23,60,920/- BEFORE FILING T HE RETURN OF INCOME AS REQUIRED U/S 140A OF THE ACT. THE AO ISSUED A NO TICE U/S 221 R.W.S 140A(3) OF THE ACT ON 21.12.2011 WHICH WAS DULY SER VED ON THE ASSESSEE ON 23.12.2011 REQUESTING TO SHOW-CAUSE AS TO WHY A PENALTY U/S 221(1) SHOULD NOT BE LEVIED. HE ALSO ISSUED A R EMINDER ON 17.01.2012 WHICH WAS SERVED ON THE ASSESSEE ON 17.0 1.2012. AS THERE WAS NO COMPLIANCE BY THE ASSESSEE, THE AO DEC IDED THE ISSUE ON MERIT AND IMPOSED A PENALTY OF RS. 24,72,184/- U/S 221(1) OF THE ACT. 5. THE ASSESSEE PREFERRED AN APPEAL AGAINST THE ORD ER OF THE AO BEFORE THE LEARNED CIT(A). WE FIND THAT THE LEARNED CIT(A) OBSERVED THAT THROUGHOUT THE SUBMISSIONS MADE BY THE ASSESSE E, FINANCIAL HARDSHIP AND LIQUIDITY CRUNCH HAD BEEN REPEATEDLY C LAIMED WITHOUT BRINGING ANY EVIDENCE TO SUPPORT THE SAME. ALSO THE RE WAS NON- COMPLIANCE BY THE ASSESSEE TO THE SHOW-CAUSE NOTICE ISSUED BY THE AO. AS THE WHOLE SYSTEM OF TAX COLLECTION AND ADMIN ISTRATION IS SO DESIGNED THAT IT IS INCUMBENT UPON THE ASSESSEE TO PAY SELF- ASSESSMENT TAX ALONG WITH THE FILING OF RETURN OF I NCOME AND THE ASSESSEE HAD DELAYED THE PAYMENT OF THE SAME EVEN A FTER THE ISSUE OF NOTICE U/S 221 OF THE ACT, THE LEARNED CIT(A) UPHEL D THE PENALTY IMPOSED BY THE AO. 6. BEFORE US, THE LEARNED COUNSEL OF THE ASSESSEE S UBMITS THAT THE DURING THE F.Y. 2010-11 RELEVANT TO THE A.Y. 2011-1 2, OWING TO ITA NO. 2301/MUM/2013 3 FINANCIAL HARDSHIP AND LIQUIDITY CRUNCH, THE ASSESS EE WAS NOT ABLE TO MAKE PAYMENT OF THE SELF-ASSESSMENT TAX DETERMINED AT THE TIME OF FILING ITS RETURN OF INCOME U/S 139(1) OF THE ACT. HE REFERRED TO THE BALANCE SHEET OF THE ASSESSEE COMPANY AS AT 31.03.2 011 (P. 76 OF THE P/B) AND SCHEDULE D (P. 79 OF THE P/B). IT IS F URTHER STATED BY HIM THAT THE SELF-ASSESSMENT TAX OF RS. 10,00,000/- WAS PAID ON 23.02.2012 AND RS. 1,20,28,785/- ON 30.03.2012. 6.1 IT IS FURTHER STATED THAT AO HAS COMPLETELY IGN ORED THE SECOND PROVISO TO S. 221(1) ACCORDING TO WHICH HE HAS BEEN GIVEN DISCRETION IN THE MATTER OF LEVY OF PENALTY. AS THE AO HAD NOT OFFERED ANY OPPORTUNITY OF BEING HEARD, WHICH IS VERY ESSENTIAL BEFORE PASSING ANY ORDER, THE IMPUGNED ORDER HAVING BEEN PASSED IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE, IS ILLEGAL AND BAD IN LAW. 6.2 RELIANCE WAS PLACED BY HIM ON THE ORDER OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. AANJANEYA LIFE CARE LTD . (ITA NO. 6440 & 6441/MUM/2013) FOR THE A.Y. 2010-11 AND 2011-12 AND THE ORDER IN THE CASE OF ACIT VS. M/S. OZONE FINANCE & INVESTMENT PVT. LTD . (ITA NO. 5237/MUM/2010) FOR THE A.Y. 2007-08. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS FOUND THAT THERE WAS NO C OMPLIANCE BY THE ASSESSEE TO THE NOTICE U/S 221 R.W.S 140A(3) SERVED ON THE ASSESSEE ON 23.12.2011 AND ALSO TO THE REMINDER THEREOF SERV ED ON 17.01.2012. THE SAME HAS BEEN MENTIONED BY THE LEAR NED CIT(A) AT PARA 3.4 OF HER APPELLATE ORDER DATED 23.11.2011.TH E LEARNED COUNSEL OF THE ASSESSEE COULD NOT CLARIFY THE REASONS FOR N ON-COMPLIANCE BEFORE THE AO DURING THE COURSE OF APPELLATE PROCEE DINGS BEFORE US. IN THE INTEREST OF JUSTICE, TAKING INTO ACCOUNT THE CO NSPECTUS OF FACTS, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTO RE THE MATTER TO THE FILE OF THE AO TO MAKE A FRESH ORDER AS PER THE PRO VISIONS OF THE ACT AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE THE AO AND FILE THE RELEVANT DETAILS. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSE. ITA NO. 2301/MUM/2013 4 ORDER PRONOUNCED IN THE OPEN COURT ON 27/01/2017 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 27/01/2017 BISWAJIT, SR. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . B Y ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI