ITO, Ward-1(3), Bhubaneswar V. M/s. Aeon Medical Pvt. Ltd., Bhubaneswar

ITA 251/CTK/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4375 (ITAT-CUTTACK)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 27-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: K K BAL

Judgement Text

1 ITA NO.251/CTK/2017 ASSESSMENT YEAR : 2010 - 2011 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 251 /CTK/201 7 ASSESSMENT YEAR : 2010 - 2011 INCOME TAX OFFICER WARD 1(3), AAYAKAR BHAVAN, 4 TH FLOOR, RAJASWA VIHAR, BHUBANESWAR. VS. AEON MEDICALS PVT LTD., PLOT NO.121, BHIMPUR, NEAR AERODRUM MAIN GATE, BHUBANESWAR. PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI K.K.BAL, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 30 / 01 / 201 8 DATE OF PRONOUNCEMENT : 30 / 0 1/ 201 8 O R D E R PER PAVAN KUMAR GADALE, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) - 1, BHUBANESWAR DATED 25.4.2017 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. GROUND OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) IS NOT JUSTIFIED IN LAW AS WELL AS ON FACTS IN DELETING THE PENALTY AMOUNT OF RS.47,07,450/ - IMPO SED BY THE AO IN HIS ORDER PASSED ON 24.3.2015 U/S.140A(3) OF THE INCOME TAX AT, 1961. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 13.10.2010 FOR THE ASSESSMENT YEAR 2010 - 2011 SHOWING TOTAL 2 ITA NO.251/CTK/2017 ASSESSMENT YEAR : 2010 - 2011 INCOME OF RS.1,40,69,580/ - . THE ASSESSING OFFICER OBSERVED THAT ALTHOUGH THE TAX PAYABLE INCLUDING SURCHARGE COMES TO RS.47,82,251/ - , THE ASSESSEE HAD PAID ONLY AN AMOUNT OF RS.7,13,640/ - AND, THUS, AN AMOUNT OF RS.47,07,447/ - REMAINED PAYABLE BY THE ASSESSEE. THEREFORE, THE ASS ESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.140A(3) OF THE ACT FOR THE DEFAULT COMMITTED BY THE ASSESSEE . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER IMPOSED PENALTY OF RS.47,07,447/ - U/S. 140A(3) OF THE ACT. 4. ON APPEAL, THE CIT(A) DELETED THE PENALTY OF RS.47,07,450/ - ON THE GROUND THAT ALTHOUGH THE ASSESSEE COULD NOT PAY THE TAX DUE TO FINANCIAL DIFFICULTY, BUT PAID THE TAX IMMEDIATELY AFTER THE FUNDS POSITION IMPROVED. 5. BEFORE US, LD D.R. SUBMITTED THAT SINCE THERE WAS GROSS NEGLIGENCE TO FULFIL THE STATUTORY OBLIGATION TO PAY THE ADMITTED TAX BEFORE FILING OF THE RETURN, THE ASSESSING OFFICER WAS JUSTIFIED IN LEVYING THE PENALTY U/S.140A(3) OF THE ACT AND THE CIT(A) IS NOT JUSTIFIED IN DELETING THE SAME. 6. CO NTRA, LD A.R. SUPPORTED THE ORDER OF THE CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE LD D.R.S CONTENTION THAT THE CIT(A) HAS ERRED IN DELETING THE PENALTY IMPOSED U/S.140A (3) OF THE ACT WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE CHOSES NOT TO PAY THE ADMITTED TAX IRRESPECTIVE OF HIS BUSINESS TURNOVER. WHEREAS LD A.R. 3 ITA NO.251/CTK/2017 ASSESSMENT YEAR : 2010 - 2011 SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ASSESSEE HAS COMPLIED THE CONDITIONS OF PAYING SELF - ASSESSMENT TAX ALONGWITH INTEREST AND THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS AND GROUNDS HAS FOUND THAT THERE IS SERIOUS FINANCIAL DIFFICULTIES FACED BY THE ASSESSEE DURING THE RELEVANT TIME AND IS SUPPORTED BY DOCUMENTS IN THE COURSE OF APPELL ATE PROCEEDINGS AND THE LEVY OF PENALTY BY THE ASSESSING OFFICER UNDER PRESUMPTION THAT THE ASSESSEE HAS GROSSLY WILFULLY NEGLECTED IN NOT PAYING THE STATUTORY TAX CANNOT BE SUSTAINED. THE REASONS FOR NON - PAYMENT OF SELF - ASSESSMENT TAX WAS DUE TO ACUTE SH ORTAGE OF FUNDS BEING FACED BY THE ASSESSEE COMPANY. UNDER THE PROVISIONS OF SECTION 221 READ WITH SECTION 140A(3) OF THE ACT, IT IS STIPULATED THAT WHERE THE ASSESSEE HAS DEFAULTED FOR THE PAYMENT OF TAXES, THEN, IN ADDITION TO THE TAX ARREARS, THE ASSES SEE SHALL BE SUBJECT TO LEVY OF PENALTY IN THIS REGARD. HOWEVER, WHERE THE ASSESSEE PROVES TO THE SATISFACTION OF THE ASSESSING OFFICER THAT THE DEFAULT WAS FOR GOOD AND SUFFICIENT REASON, NO PENALTY IS LEVIABLE UNDER THE SAID SECTION. IN THE FACTS OF THE PRESENT CASE BEFORE US , WE FIND MERIT IN THE PLEA OF THE ASSESSEE THAT BECAUSE OF THE CIRCUMSTANCES ENUMERATED ABOVE, THE ASSESSEE WAS NOT IN A POSITION TO PAY THE SAID TAXES WITHIN TIME. HOWEVER, THE DISPUTED TAX OF RS.47,07,450/ - , WHICH IS THE SUBJECT MA TTER OF PENALTY, HAS BEEN DEPOSITED BY THE ASSESSEE . THE CIT(A) FOUND THAT THE ASSESSEE COMPANY HAS STARTED ITS OPERATION S AND FUNDS FLOW POSITION HAS IMPROVED AND THE ASSESSEE ALSO PAID THE ADMITTED TAX AS PER THE RETURN OF INCOME, WHICH COULD NOT BE DISPUTED AND, ACCORDINGLY, WE CONCUR WITH THE OBSERVATION S OF THE CIT(A) AND INCLINE TO 4 ITA NO.251/CTK/2017 ASSESSMENT YEAR : 2010 - 2011 CONFIRM THE ORDER OF THE CIT(A) AND DI SMISS THE GROUND OF APPEAL OF THE REVENUE. 8. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 30 / 01 /201 8 . SD/ - SD/ - ( N.S SAINI) ( PAVAN KUMAR GADALE) A CCOUNTANT MEMBER JUDICIALMEMBER CUTTACK; DATED 30 / 01 /201 8 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : INCOME TAX OFFICER WARD 1(3), AAYAKAR BHAVAN, 4 TH FLOOR, RAJASWA VIHAR, BHUBANESWAR 2. THE RESPONDENT. AEON MEDICALS PVT LTD., PLOT NO.121, BHIMPUR, NEAR AERODRUM MAIN GATE, BHUBANESWAR 3. THE CIT(A) - 1, BHUBANESWAR 4. PR.CIT - 1, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//