ITO, Ahmednagar V. Shri Chandak Krishnagopal Motilal., Ahmednagar

ITA 2466/PUN/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93805 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 15-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 13-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Assessee Lawyers: S N DOSHI
• Keywords: Salary income; Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.2466/PN/2012 (ASSESSMENT YEAR : 2006-07) ITO, WARD-1, AHMEDNAGAR .. APPELLANT VS. SHRI CHANDAK KRISHNAGOPAL MOTILAL, 3302, ADATE BAZAAR, AHMEDNAGAR .. RESPONDENT PAN NO.ABAPC7514Q APPELLANT BY : SHRI S.N. DOSHI DEPARTMENT BY : SHRI A.K. MODI, CIT DATE OF HEARING : 15-06-2015 DATE OF PRONOUNCEMENT : 17-06-2015 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 30-07-2012 OF THE CIT(A)-I, PUNE RELATING TO ASSESSMENT YEAR 2006-07. 2. DELETION OF PENALTY OF RS.42,16,773/- LEVIED BY THE ASSESSING OFFICER U/S.140A(3) OF THE I.T. ACT BY ADMITTING ADDITIONAL EVIDENCES IS THE ONLY ISSUE RAISED BY THE REVE NUE IN THE GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 30-03-2008 DECLARING TOTAL INCOME OF RS.6,27,99,405/-. THE SOURCE OF INCOME IS MAINLY FROM CAPITAL GAIN OUT OF SHARE TRANSACTIONS. ALTHOUGH THE TAX PAYABLE ON THE RETURNED INCOME WAS RS.53,17,680/-, HOWE VER, THE ASSESSEE WHILE FILING THE RETURN OF INCOME HAS PAID O NLY RS.11,00,887/- LEAVING THE SHORT PAYMENT OF RS.42,16,773/-. 2 SINCE THE ASSESSEE FAILED TO PAY SELF-ASSESSMENT TAX U/S .140A AT THE TIME OF FILING OF RETURN, THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE ASKING THE ASSESSEE TO INFORM WHETHER THE ABOVE DEMAND HAS BEEN PAID BY HIM AND, IF SO, TO FILE THE CO PY OF THE CHALLAN. THE ASSESSING OFFICER FURTHER ASKED THE ASSESSEE IF THE AMOUNT HAS NOT BEEN PAID, THEN TO EXPLAIN AS TO WHY PENALTY U/S.221 OF THE ACT SHOULD NOT BE LEVIED. SINCE THE ASSESSEE DID NOT REPLY TO THE SHOW CAUSE NOTICE T HE ASSESSING OFFICER AGAIN ISSUED SIMILAR NOTICES ASKING THE ASSESSEE TO EXPLAIN. IN ABSENCE OF ANY REPLY FROM THE A SSESSEE DESPITE OPPORTUNITIES GIVEN, THE ASSESSING OFFICER LEVIED PENALTY OF RS.42,16,773/- U/S.140A(3) R.W.S. 221 OF THE I.T. ACT. 4. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT HIS FATHER W AS LOOKING AFTER THE TAXATION MATTERS WHO WAS NOT FEELING WELL FROM JUNE TO SEPTEMBER 2006 FOR WHICH HE DECIDED THAT T HE RETURNS WILL BE FILED IN A MONTH OR SO BUT SUDDENLY THE M OTHER OF THE ASSESSEE FELL SICK AND AFTER A BRIEF ILLNESS SHE EXPIRE D ON 05-10-2006. SUBSEQUENTLY, HIS FATHER WAS ALSO ADMITTED T O HOSPITAL ON 10-10-2006 AND HE EXPIRED ON 25-10-2006. THEREAFTER, THE ASSESSEES WIFE ALSO SUFFERED FROM LOW BLOOD PRESSURE WHO WAS ADMITTED TO HOSPITAL. IT WAS SUBMITTED THAT SINCE THE ASSESSEE WAS FACING PROBLEMS ONE AFTER ANOTHER THE LANDLORD TOOK ADVANTAGE OF THE SITUATION AND TRIED TO TAK E POSSESSION OF THE GODOWN OF THE ASSESSEE. HE ALONG WITH AROUND 200 PERSONS FORCIBLY ATTACKED THE GODOWN AND DESTROYED THE SAME. UNFORTUNATELY THIS EVENT TOOK A COMMUNAL COLOUR, I.E. HINDU-MUSLIM CONFLICT AND THE MATTER IS NOW SUBJUDICE BEFORE THE COURT. 3 5. THE ASSESSEE FURTHER GAVE A CHRONOLOGY OF EVENTS SU CH AS THE FALL IN THE STOCK MARKET AND ATTACHMENT OF BANK ACCOUNT, DEMAT ACCOUNT ETC. THE RELEVANT PORTION OF THE SUBMISSION BY THE ASSESSEE BEFORE THE CIT(A) READS AS UNDER : THE STOCK MARKET FELL HEAVILY IN JANUARY 2008 PUTTI NG ASSESSEE TO HEAVY LOSSES. WITH NO BUSINESS IN HAND ASSESSEE SURVIVES H IS FAMILY BY WITHDRAWING FROM THEIR PPF ACCOUNT. IN SP ITE OF THIS ASSESSEE HAS FILED HIS RETURN OF INCOME ON 31/03/2008 VID E ACKNOWLEDGEMENT RECEIPT NO. 551, SIR. DUE TO MARKET POSITION BECAME WORST AND WORST DAY BY DAY HENCE ASSESSEE COULD NO T PAY SELF ASSESSMENT TAXES BEFORE FILING OF RETURN OF INCO ME. ASSESSEE ALWAYS CO-OPERATIVE WITH THE DEPARTMENT. THEREA FTER THE ASSESSING OFFICER HAS TAKEN VERY HARSH ACTION FOR REC OVERY OF DEMAND I.E., BANK A/C ATTACHMENT, D-MAT A/C ATTACHM ENT, ETC. THE INCOME TAX OFFICER SOLD ASSESSES VALUABLE SHARES AT A V ERY LOW PRICE WITHOUT ANY INFORMATION TO ASSESSEE. SIR, ASSE SSING OFFICER HAS IN LETTER DT. 17/08/20010 TO NETWORTH C APITAL WRITTEN THAT ASSESSEE HAS HOLDING SHARES OF RS. 29,1 5,601/- ON THAT DAY WHICH MAY SALE AND DEPOSIT THAT AMOUNT IN INCOME TAX OFFICE, AHMEDNAGAR, BUT AS AGAINST THE SAME THE ASS ESSING OFFICER HAS RECOVERED ONLY OF RS.9,87,530/-. SIR, IN THAT LETTER DT. 17/08/2010 ASSESSING OFFICER HAS WRITTEN TO NETWORT H CAPITAL THAT. IT IS FURTHER INFORMED BY YOU THAT M/S RAVISH A FINANCIAL SERVICES PVT. LTD. HAVE TO RECEIVE AN AMOUNT OF RS.1 9,17,560/- FROM SHRI CHANDAK KRISHNAGOPAL MOTILAL. IN THE SAI D LETTER PERMISSION WAS REQUESTED FROM THIS OFFICE SO THAT T HE SECURITY CAN BE SOLD AND FROM THE SALE CONSIDERATION, AFTER RECOVER ING THE AMOUNT OF DUE TO M/S. RAVISHA FINANCIAL SERVICES PVT. LTD., BALANCE CAN BE MADE TO THE INCOME TAX DEPARTMENT, AHMEDNAGAR FOR ITS OUTSTANDING' SIR, FOR THE SAME I AM VERY REGRET TO SAY THAT THE ASSESSEE WAS NOT PAYABLE SINGLE PAISA TO S AID M/S RAVISHA FINANCIAL SERVICES PVT. LTD. AND THE ASSESSI NG OFFICER HAS NOT INFORMED OR ASKED TO ASSESSEE BEFORE GRANTING P ERMISSION TO RECOVER THE AMOUNT OF RS 19,17,560/-. SIR, IT WAS H IS MORAL/LEGAL RESPONSIBILITY ON ACCOUNT OF INCOME TAX DEPARTMENT AS WELL AS ASSESSEE. SIR, ASSESSING OFFICER HAS NO RIGHT TO GIVE PERMI SSION OF THIRD PARTY RECOVERY. SIR, DUE TO ISSUE OF THIS LET TER BY THE ASSESSING OFFICER, ASSESSES SOURCE OF TO DEPOSIT SE LF ASST. TAX WAS CLOSED AND THE INCOME TAX DEPARTMENT HAS RECOVERED TAX RS.9,87,530/- AS AGAINST SALE CONSIDERATION OF SHARES OF RS.29,90,549/-. SIR, THEREAFTER ASSESSEE HAS NO SOURCE NO BANKER ARE READY TO GIVE LOAN. SIR, ASSESSES PREVIOUS TAX CONSULT ANT HAS GUIDED ASSESSEE THAT TO PAY SELF TAXES FIRST THEN WE SHOULD FILE APPEAL. SIR ASSESSEE WAS NOT IN POSITION TO PAY OF TAXES, THERE WAS NO ALTERNATIVE FOR PAYMENT OF TAXES EXCEPT TO BO RROW MONEY. SIR, ENAR STAR TRADE LTD HAS GIVEN UNSECURED LOAN TO ASSESSEE HENCE HE CAN PAID THE BALANCE OF SELF ASST. TAX. SIR, HERE WE ARE PRODUCING ALL THE DOCUMENTS FOR YOUR HONORS KI ND VERIFICATION AND OUT OF THE SAME SOME COPIES OF SUCH DO CUMENTS ARE SUBMITTING ON RECORD. 4 SIR, IN ALL THESE MATTERS ASSESSEE CANNOT UNDERSTAND THAT WHAT HE HAS TO DO FIRST. DUE TO SOME OTHER FAMILY PROBLEMS AND FINANCIAL CRISES ASSESSEE COULD NOT FILE APPEAL IN TIME. CONSIDERING THE FACT HERE WE ALSO REQUEST TO YOUR HONOR THAT THE DELAY FOR FILING APPEAL MAY PLEASE BE CONDONED. SIR, ASSESSING OFFICER HAS TAKEN SURVEY ACTION AT BUSINESS P LACE OF THE ASSESSES WIFE, BUT THE SURVEY AUTHORITY HAS NOT FO UND ANY DISCREPANCY AT BUSINESS PREMISES, BUT THEY HAD GOT KNOWL EDGE ABOUT THAT THE ASSESSEE IS NOT IN POSITION TO PAY SELF ASSESSM ENT TAX. 6. THE ASSESSEE ALSO BROUGHT TO THE NOTICE OF THE CIT(A ) THE OBSERVATION OF THE HONBLE FINANCE MINISTER IN THE LOK SAB HA IN HIS REPLY TO DEBATE ON CLAUSE BY CLAUSE CONSIDERATION OF THE FINANCE BILL, 1964. REFERRING TO THE PROVISIONS OF SECTION 140A(3) AND THE CBDT CIRCULAR DATED 22-04-1971, THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. WESMAN ENGINEERING COMPANY PVT. LTD. REPORTED IN 10 4 ITR 650 AND THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF RAMCHANDRA PESTICIDES PVT. LTD. VS . CIT REPORTED IN 285 ITR 45 THE ASSESSEE ARGUED THAT PENA LTY LEVIED BY THE AO SHOULD BE DELETED. 7. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) CANCELLED THE PENALTY SO LEVIED U/S.140A(3) OF THE I.T. ACT BY OBSERVING AS UNDER : 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE AND THE LAW AS ARE APPARENT FROM THE RECORD. THE PROBLEMS FAC ED BY THE APPELLANT HAVE BEEN AMPLY DEMONSTRATED. THE FACT THA T THE RETURN WAS FILED SHOWING SHORT TERM CAPITAL GAINS OF RS.4,73,30,889/- AND LONG TERM CAPITAL GAINS OF RS. 1,53,11,448/- ALONG WITH SALARY INCOME IS NOT IN DISPU TE. THE TAX PAYABLE ON THE RETURNED INCOME WAS AT RS.53,17,680/- . HOWEVER, THE APPELLANT PAID RS.11,00,887/- ONLY AND THE BALAN CE OF RS.42,16,773/- REMAINED TO BE PAID. THE AO AFTER PRO CESSING THE RETURN RAISED A DEMAND OF RS.62,07,590/- ALONGWITH IN TEREST. THE CASE WAS FURTHER SELECTED FOR SCRUTINY AND THE ASSESSM ENT WAS COMPLETED U/S 143(3) ON 4/12/2008 BY TREATING THE SHARE TRANSACTIONS AS ASSESSABLE UNDER THE HEAD 'BUSINESS'. AS A RES ULT OF THIS, DEMAND OF RS.3,19,30,835/- WAS RAISED. HOWEVER , THE AO AFTER NOTICING THE CONTRAVENTION OF SEC. 140A, TREAT ED THE ASSESSEE IN DEFAULT U/S 140A(3) AND LEVIED , THE PENALTY OF RS.42,16,773/- U/S. 221 OF THE I.T. ACT @ OF 100% OF THE TAX 5 PAYABLE AS PER RETURN FILED. THE PERUSAL OF THE PENAL TY ORDER CLEARLY SHOWS THAT THE AO GAVE MANY OPPORTUNITIES TO T HE APPELLANT TO EXPLAIN THE CIRCUMSTANCES FOR NON-PAYMEN T BEFORE LEVYING THE PENALTY U/S 221 THOUGH THE SAME WERE NOT AVAILED. SINCE THE APPELLANT HAS BEEN ABLE TO EXPLAIN WITH E VIDENCES THE REASONS FOR NOT BEING ABLE TO PAY THE TAXES FULLY ON T HE RETURNED INCOME AS WELL AS FOR NOT BEING ABLE TO APPEAR BEFORE THE AO, THE PENALTY LEVIED CAN BE DELETED FOR THE SUCCESSFUL DEMON STRATION OF GOOD AND SUFFICIENT REASONS FOR THE AFORESAID DEFAULTS. IN VIEW OF THE DISCUSSIONS MADE ABOVE, GROUND NO.1 IS ALLOWED. 8. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 9. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY CHALLENGED THE ORDER OF THE CIT(A) IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S.140A(3) OF THE I.T .ACT. H E SUBMITTED THAT THE LD.CIT(A) WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSING OFFICER DELETED THE PENALTY. HE SUBMITTED THAT DESPITE REPEATED OPPORTUNITIES GIVEN BY T HE ASSESSING OFFICER THE ASSESSEE DID NOT BOTHER TO APPEAR BEFORE THE ASSESSING OFFICER TO SUBSTANTIATE THE FINANCIAL HARDSHIP, IF ANY. THEREFORE, THE ASSESSEE SHOULD NOT BE GIVEN ANY PREMIUM FOR NON-ATTENDANCE BEFORE THE ASSESSING OFFICER. 10. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAN D HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED T HAT ALTHOUGH THE ASSESSEE HAS NOT APPEARED BEFORE THE ASS ESSING OFFICER DURING PENALTY PROCEEDINGS, HOWEVER, THE ASSESSEE H AS APPEARED BEFORE THE ASSESSING OFFICER DURING SCRUTINY ASSESSMENT PROCEEDINGS FOR THE A.Y. 2006-07 WHEREIN ALL DETAILS WERE FILED. REFERRING TO PAPER BOOK PAGE 43 HE SUBMITTED THAT AN AMOUNT OF RS.6,38,00,289.29 WAS PAYABLE TO RELIGARE SECURITIES LTD., WHO IS THE BROKER FOR THE ASSE SSEE FOR HIS SHARE TRANSACTION BUSINESS. SIMILARLY, REFERRING TO PAPER BOOK PAGE 57 HE SUBMITTED THAT AN AMOUNT OF 6 RS.4,62,97,093.37 WAS PAYABLE TO RELIGARE FINVEST LTD. AS ON 31-03-2007. REFERRING TO PAPER BOOK PAGE 75 HE SUBMITT ED THAT AN AMOUNT OF RS.4,63,47,202.78 WAS PAYABLE TO RELIGARE FINVEST LTD. AS ON 31-03-2008. REFERRING TO BANK STATE MENT MAINTAINED WITH NAGAR URBAN COOPERATIVE BANK, COPIES OF WHICH ARE PLACED AT PAPER BOOK PAGES 76 TO 80 HE SUBM ITTED THAT THE BALANCE AS ON 31-03-2006 WAS RS.49.75, BALANCE AS ON 31-03-2007 WAS RS.6,093.30 AND BALANCE AS ON 31-03- 2008 WAS RS.10,564.80 ONLY. REFERRING TO THE BANK ACCOUN T MAINTAINED WITH HDFC BANK HE SUBMITTED THAT THE BALANCE AS ON 31-03-2008 WAS RS.9,074.01 (PLACED AT PAPER BOOK PAGE 80A). REFERRING TO BANK ACCOUNT MAINTAINED WITH AHMEDNAGAR MERCHANTS COOPERATIVE BANK LTD. (A COPY OF WHICH IS PLACED AT PAPER BOOK PAGE 80B) HE SUBMITTED THA T THE ASSESSEE HAD A LIABILITY OF RS.10,03,191.28 TO THE SAID BANK AS ON 31-03-2008. REFERRING TO THE CASH CREDIT AC COUNT WITH NAGAR URBAN COOPERATIVE BANK LTD., (A COPY OF WHICH I S PLACED AT PAPER BOOK PAGE 80C) HE SUBMITTED THAT THE ASSESSEE HAS AVAILED A LOAN OF RS.10 LAKHS ON 03-12-2007 . REFERRING TO PAGES 76 & 77 OF THE PAPER BOOK HE SUBMITT ED THAT THE BALANCE WITH AHMEDNAGAR MERCHANTS COOPERATIVE BANK LTD. AS ON 31-03-2006 WAS RS.1,880/-, AS ON 31-03- 2007- RS.1,998/- AND AS ON 31-03-2008-RS.2,069/-. 11. REFERRING TO THE DEMAT ACCOUNT, A COPY OF WHICH IS PLACED AT PAGE 81 AND 82 OF THE PAPER BOOK HE SUBMITTE D THAT THE DEMAT ACCOUNT SHOWS THAT THE ASSESSEE HAS SHARE S IN SEVERAL COMPANIES AND THE PRICE OF ALL THE SHARES HAD SLA SHED DOWN. THE ASSESSEE WAS HOLDING 1,87,730 SHARES OF J.K. AGR O GENETICS LTD. AS ON 31-03-2008. ALTHOUGH THE PRICES OF THESE 7 SHARES WERE HOVERING AROUND RS.280 TO RS.300 DURING MAR CH 2006, HOWEVER, THE PRICES OF THE SAID COMPANY CAME DOWN DUE TO THE SCHEME OF MERGER WHICH WAS AGAINST THE INTEREST OF MINORITY SHAREHOLDERS. THE PRICES FELL DOWN TO RS.150 JUS T IN 3 MONTHS. THE ASSESSEE HAD TO SELL SOME OF THE SHARES AT LOSS. THE MATTER TRAVELLED TO THE HIGH COURT CHALLENGING THE SC HEME OF MERGER WHICH CONTINUED FOR SIX YEARS. SUBSEQUENTLY, THE SHARES BECAME ILL-LIQUID AND THE PRICES OF THOSE SHARES I N 2008-09 WENT DOWN TO RS.62. SIMILARLY, THE ASSESSEE HAD 1,49,336 IN RAMA PULP LTD., AS ON 31-03-2008. THE PRICES OF THOSE SHARES WHICH WERE QUOTED BETWEEN RS.40 TO RS.50 CAME DOWN TO RS.20/- IN MARCH 2008 AND SUBSEQUENTLY TO RS.3 TO RS.4. SIMILAR IS THE CASE WITH VARIOUS OTHER SHARES WHICH WERE HELD BY THE ASSESSEE. ALL THESE FACTS SHOW THAT TH E ASSESSEES DEFAULT CANNOT BE SAID TO BE WILFUL. REFERRING TO VARIOUS DECISIONS HE SUBMITTED THAT IF THE DEFAULT IS NOT WILFU L AND THERE IS SUFFICIENT REASON TO PROVE THAT DUE TO FINANC IAL HARDSHIP THE ASSESSEE COULD NOT PAY SELF-ASSESSMENT TA X THEN THE BURDEN SHIFTS TO THE REVENUE TO ESTABLISH THAT ASSE SSEE HAS NOT DEPOSITED TAX WITHOUT GOOD AND SUFFICIENT REASON. IF THE REVENUE CANNOT PROVE THAT THERE WAS NO SUFFICIENT R EASON IN NOT PAYING SELF-ASSESSMENT TAX, THEN IN THAT CASE PEN ALTY U/S.140A(3) CANNOT BE LEVIED. 12. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT AFTER THE ASSESSMENT ORDER WAS PASSED RAISING HUGE DEM AND THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHICH WAS DISMISSED BY HIM U/S.249(4) FOR NON PAYMENT OF SELF- ASSESSMENT TAX. THEREAFTER, THE ASSESSEE COULD ARRANGE THE LOAN AND MADE THE PAYMENT AFTER ABOUT 1 YEARS AND FILE D 8 THE APPEAL BEFORE THE TRIBUNAL. REFERRING TO THE COPY OF T HE ORDER OF THE TRIBUNAL VIDE ITA NO.1721/PN/2012 ORDER DAT ED 28-10-2013 HE SUBMITTED THAT THE TRIBUNAL ALLOWED THE AP PEAL FILED BY THE ASSESSEE BY DIRECTING THE CIT(A) TO ADMIT THE APPEAL AND DECIDE THE ISSUE ON MERIT. HE ACCORDINGLY SUBMITTED THAT THERE WAS VALID REASON FOR NON-PAYMENT O F SELF- ASSESSMENT TAX. THEREFORE, THE ORDER OF THE CIT(A) SHOU LD BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 13. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US . THE ONLY DISPUTE IN THE IMPUGNED APPEAL FILED BY THE REVEN UE IS REGARDING THE DELETION OF PENALTY LEVIED U/S.140A(3) R.W.S. 221 OF THE ACT BY THE LD.CIT(A) BY ADMITTING ADDITIONAL EVIDENCES. THERE IS NO DISPUTE TO THE FACT THAT THE ASS ESSEE WHILE FILING THE RETURN OF INCOME HAS NOT PAID THE SELF- ASSESSMENT TAX. HE HAS PAID ONLY RS.11,00,887/- AS AGAIN ST THE TOTAL TAX LIABILITY OF RS.53,17,680/- LEAVING THE SHORT PAYMENT OF RS.42,16,773/-. DESPITE OPPORTUNITIES GIVEN BY THE ASSESSING OFFICER, THE ASSESSEE DID NOT APPEAR BEFORE HIM DURING THE PENALTY PROCEEDINGS INITIATED UNDER THE PROVISIO NS OF SECTION 140A(3) R.W.S.221. THE ASSESSING OFFICER LEVIED PENALTY OF RS.42,16,773/- FOR NON PAYMENT OF SELF-ASSESSME NT TAX OF EQUAL AMOUNT. WE FIND BEFORE THE CIT(A) THE ASSESS EE MADE ELABORATE ARGUMENTS NARRATING THE MISHAPS IN THE FAMILY CAUSED DUE TO DEATH OF HIS PARENTS AND ALSO FINANCI AL HARDSHIP DUE TO FALL IN THE SHARE MARKET PRICE. THE ASSE SSEE 9 ALSO BROUGHT TO THE NOTICE OF THE CIT(A) ABOUT THE FORCIBLE EVICTION BY THE LANDLORD FROM THE BUSINESS PREMISES. THE ASSESSEE ALSO BROUGHT TO THE NOTICE OF THE LD.CIT(A) THE ACTION OF THE ASSESSING OFFICER BY ATTACHING THE BANK ACCOUNT, D EMAT ACCOUNT ETC., THE ACTION OF THE ASSESSING OFFICER IN SELLING SOME SHARES HELD BY THE ASSESSEE AT A VERY LESS PRICE WAS ALSO BROUGHT TO THE NOTICE OF LD.CIT(A). IT IS ALSO A FACT THAT A GAINST THE QUANTUM ADDITION MADE BY THE ASSESSING OFFICER THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHICH WAS DISMISSED BY HIM AS NON MAINTAINABLE IN VIEW OF SECTION 249(4)(A) OF THE I.T. ACT ON THE GROUND THAT TAX ON THE R ETURNED INCOME WAS NOT PAID BY THE ASSESSEE IN FULL BEFORE FILING OF THE APPEAL. SUBSEQUENTLY, THE ASSESSEE PAID SELF-ASSESSMEN T TAX AND FILED AN APPEAL BEFORE THE TRIBUNAL AGAINST SUCH ORDER OF CIT(A). WE FIND THE TRIBUNAL VIDE ITA NO.1721/PN/2012 ORDER DATED 28-10-2013 FOR A.Y. 2006-07 ALLOWED THE APPEAL FILED B Y THE ASSESSEE BY RESTORING THE ISSUE BACK TO THE FILE OF T HE CIT(A) WITH A DIRECTION TO ADMIT THE APPEAL AND DECIDE THE ISSUE ON MERIT. ALL THESE FACTS SHOW THAT THERE WAS SOM E BONAFIDE REASON ON THE PART OF THE ASSESSEE FOR NON PAY MENT OF SELF-ASSESSMENT TAX. 13.1 UNDER THE PROVISIONS OF SECTION 140A(3) IF ANY ASSESS EE FAILS TO PAY THE WHOLE OR ANY PART OF SUCH TAX OR INTERES T OR BOTH IN ACCORDANCE WITH THE PROVISIONS OF SUB SECTION (1), HE SHALL, WITHOUT PREJUDICE TO ANY OTHER CONSEQUENCES WHICH HE MAY INCUR, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESP ECT OF THE TAX OR INTEREST OR BOTH REMAINING UNPAID, AND ALL TH E PROVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY. SIMILARLY, UNDER THE PROVISIONS OF SECTION 221 THE ASSESSEE IS LIABLE FOR 10 PENALTY WHEN HE IS AN ASSESSEE IN DEFAULT OR IS DEEMED TO BE IN DEFAULT IN MAKING A PAYMENT OF TAX. HOWEVER, AS PER THE SECOND PROVISO TO PROVISIONS OF SECTION 221(1) IF THE ASSESS EE PROVES TO THE SATISFACTION OF THE ASSESSING OFFICER THAT T HE DEFAULT WAS FOR GOOD AND SUFFICIENT REASONS NO PENALTY SHOU LD BE LEVIED UNDER THIS SECTION. 13.2 IN THE INSTANT CASE IT IS AN UNDISPUTED FACT THAT TH E ASSESSEE DID NOT APPEAR BEFORE THE ASSESSING OFFICER DESP ITE REPEATED OPPORTUNITIES GIVEN BY HIM. THIS ACT OF ASSESSEE BY IGNORING THE ASSESSING OFFICER IS HIGHLY DEPLORABLE. HOWEVER , CONSIDERING THE MISHAPS IN THE FAMILY CAUSED DUE TO THE D EATH OF HIS PARENTS WITHIN A VERY SHORT SPAN AND THE SUBSEQU ENT ILLNESS OF HIS WIFE AS STATED BEFORE THE CIT(A) AND NOT CONTROVERTED BY THE REVENUE WE ARE TAKING A LIBERAL VIEW OF THIS ACTION ON THE PART OF THE ASSESSEE IN NOT APPEARIN G BEFORE THE ASSESSING OFFICER. HOWEVER, IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE BEFORE THE CIT(A) HAS APPEARED AND BROUGH T TO HIS NOTICE THE CHRONOLOGY OF EVENTS, I.E. THE ATTACHMENT OF THE ACCOUNTS BY THE ASSESSING OFFICER AND THE SALE OF SHARES BY THE ASSESSING OFFICER HELD BY THE ASSESSEE IN HIS DEMAT ACCOUNTS. FROM THE VARIOUS BANK ACCOUNTS PRODUCED BY THE ASSESSEE WE ALSO FIND THAT THERE IS NEGLIGIBLE OR INSUFFICIENT BALANCES. THEREFORE, WE FIND MERIT IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THERE WAS A BONAFIDE R EASON ON HIS PART IN NOT PAYING THE SELF-ASSESSMENT TAX. 13.3 IT HAS BEEN HELD IN VARIOUS JUDICIAL DECISIONS THAT LEV Y OF PENALTY BY THE ASSESSING OFFICER U/S.221(1) IS DISCRETIONARY AND NOT AUTOMATIC. FURTHER, FOR LEVY OF PENALTY U/S.221 SU CH DEFAULT MUST BE WILFUL AND NOT MERELY ACCIDENTAL. IN THE 11 INSTANT CASE, THE ASSESSEE HAS PROVED BEYOND DOUBT TH AT THE DEFAULT BY HIM IN NOT PAYING THE SELF-ASSESSMENT TAX IS NO T WILFUL AND IT WAS BEYOND HIS CONTROL AS THERE WAS NO SUFFICIEN T MONEY AVAILABLE WITH HIM TO PAY THE SELF-ASSESSMENT TAX ESPECIALLY WHEN THE INCOME IS MAINLY FROM SHORT TERM AND LONG TERM CAPITAL GAIN. 13.4 SO FAR AS THE GROUND BY THE REVENUE THAT CIT(A) HA S ACCEPTED ADDITIONAL EVIDENCE IS CONCERNED WE FIND ALL THOUGH DURING PENALTY PROCEEDINGS THE ASSESSEE HAS NOT FURNISHE D THE DOCUMENTS SUCH AS BANK STATEMENT AND DEMAT ACCOUNT ETC., HOWEVER, DURING ASSESSMENT PROCEEDINGS FOR THE SAME ASSESSMENT YEAR THE ASSESSEE HAS PRODUCED VARIOUS DE TAILS AS CALLED FOR BY THE ASSESSING OFFICER FROM TIME TO TIME. FURTH ER, THE ATTACHMENT OF THE BANK ACCOUNT BY THE ASSESSING O FFICER AND SALE OF THE SHARES BY THE ASSESSING OFFICER CANNOT B E TREATED AS ADDITIONAL EVIDENCE. CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE WE FIND THE CIT(A) HAS NOT CONTRAVENED ANY OF THE PROVISIONS BY ADMITTING ANY ADDITIONAL EVIDENCE. FURTHE R, IT IS THE SETTLED PROPOSITION OF LAW THAT THE POWERS OF THE CIT(A) ARE COTERMINOUS WITH THAT OF THE ASSESSING OFFICER. SINCE IN THE INSTANT CASE THE VARIOUS DOCUMENTS PRODUCED BEFORE THE CIT(A) WERE ALREADY BEFORE THE ASSESSING OFFICER IN THE QUANTUM PROCEEDINGS, THEREFORE, THESE DOCUMENTS IN OUR OPINION CANNOT PER SE BE CALLED AS ADDITIONAL EVIDENCE. THEREFORE, THE GROUND RAISED BY THE REVENUE ON THIS ISSU E IS DISMISSED. 13.5 CONSIDERING THE TOTALITY OF THE FACTS OF THE CASE AND IN VIEW OF OUR DISCUSSION IN THE PRECEDING PARAGRAPHS, WE AR E OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS PROVED T HAT THE 12 DEFAULT WAS FOR GOOD AND SUFFICIENT REASONS. THEREFORE, IN VIE W OF THE SECOND PROVISO TO SECTION 221(1) THIS IS NOT A FIT CA SE FOR LEVY OF PENALTY U/S.140A(3) R.W.S. 221 OF THE I.T. ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) CANCELLING THE PENALTY IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 17-06-2015. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE DATED: 17 TH JUNE, 2015 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-I, PUNE 4. CIT-I, PUNE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE