Ram Sagar Pandey, Lucknow V. Dy. Commissioner of Income Tax, Lucknow

ITA 275/LKW/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4411 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-04-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 06-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NIDHI VERMA
• Keywords: Principle of natural justice

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI P.K. BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ITA NO.275/LKW/2015 ASSESSMENT YEAR 2007-08 DCIT, RANGE-1, LUCKNOW VS RAM SAGAR PANDEY, 351/1, INSAF NAGAR, NEAR TELEPHONE EXCHANGE, SECTOR-10, INDIRA NAGAR, LUCKNOW (U.P.)-226016 PAN A GKPP 0856 H (RESPONDENT) (APPELLANT) SHRI RAKESH GARG AND SHRI YOGESH AGARWAL, ADVOCATES APPELLANT BY SMT. NIDHI VERMA, D.R. RESPONDENT BY 21 /04/2015 DATE OF HEARING 08 / 06 /201 6 DATE OF PRONOUNCEMENT O R D E R PER MAHAVIR PRASAD, JM. THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF LD. CIT (A), LUCKNOW DATED 02.02.2015 FOR THE AY 2007-08. 2. THE GROUND RAISED BY THE ASSESSEE ARE AS UNDER: I. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-I, LUCKNOW [HERE-IN-AFTER REFERRED TO AS THE LD. CIT ( A)'S] ERRED ON FACTS AND IN LAW IN PARTLY CONFIRMING THE PENALTY LEVIED U/S 221(1) OF THE I. T. ACT, 1961 FO R ALLEGED DEFAULT IN PAYING THE SELF ASSESSMENT TAX U /S 140A(3) WHOLLY ON IRRELEVANT CONSIDERATIONS, AGAINS T ALL SETTLED PRINCIPLES OF LAW, NATURAL JUSTICE AND FAIR PLAY. II. IN CONFORMING THE PENALTY U/S 221(1) FOR AN AMO UNT OF RS.5,00,000/-THE LD. CIT (A)'S FAILED TO APPRECIATE OR 2 RATHER CHOSE TO COMPLETELY IGNORE THE FACT THAT THE APPELLANT WAS NOT HAVING SUFFICIENT FUNDS AT THE TI ME OF FILING THE RETURN OF INCOME WHICH DID CONSTITUTE GO OD AND SUFFICIENT CAUSE FOR NOT IMPOSING THE PENALTY A ND THUS THE PENALTY SO CONFIRMED TO THE EXTENT OF RS. 5, 00, 0007- MAY KINDLY BE ORDERED TO BE DELETED. III. ON THE FACTS AND IN THE PECULIAR CIRCUMSTANCES OF THE CASE THE LD. CIT (A)'S WAS NOT AT ALL JUSTIFIED IN ALLOWING RELIEF OF ONLY 7,97,392/- FROM THE PENALTY SO LEVIE D ON AD HOC BASIS ONLY ON WHIMS AND FANCIES AND WITHOUT ANY COGENT REASON AS TO WHY THE SAME IS BEING SUSTAINED TO AN EXTENT OF RS.5,00,000/- ONLY AND TH US ONCE THE LD. CIT (A)'S HAS AGREED TO DELETE PART OF THE PENALTY THERE IS NO JUSTIFICATION IN SUSTAINING THE PENALTY TO AN EXTENT OF RS.5,00,000/- AND THUS THE ORDER SO PASSED IN VIOLATION OF ALL SETTLED PRINCIPLES OF LA W MAY KINDLY BE ORDERED TO BE QUASHED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED HIS RETURN OF INCOME ON 21.02.2008, DECLARING AN INCOME OF RS.41,73,834/- AND AGRICULTURAL INCOME OF RS.35,25, 000/-. IN THIS CASE, IT WAS NOTICED THAT ASSESSEE DID NOT DEPOSIT THE AM OUNT OF SELF ASSESSMENT TAX OF RS.10,39,575/- AS SELF DECLARED I N HIS RETURN OF INCOME. THUS, AN AMOUNT OF RS.10,39,575/- REMAINED AS ADMITTED TAX. THE PENALTY LEVIED BY THE ASSESSING OFFICER AT RS.1 2,97,392/- U/S 140A(3)/221(1) OF THE ACT. 4. LD. AR OF THE ASSESSEE SUBMITTED THAT ASSESSEE W AS NOT AWARE THAT THE TAX HAS TO BE PAID BEFORE FILING THE RETUR N OF INCOME. IT IS FURTHER STATED THAT CIT(A) FAILED TO APPRECIATE OR RATHER CHOSE TO COMPLETELY IGNORE THE FACT THAT THE ASSESSEE WAS NO T HAVING SUFFICIENT FUNDS AT THE TIME OF FILING OF THE RETURN OF INCOME . 5. AGGRIEVED, ASSESSEE HAS PREFERRED AN APPEAL BEFO RE THE CIT(A) AND CIT(A) WAS DIRECTED TO THE ASSESSING OFFICER TO REDUCE THE 3 QUANTUM OF PENALTY FROM RS.12,97,392/- TO RS.5.00 L AKH AND ALLOWED THE RELIEF PARTLY. 6. AGAINST THE ORDER OF THE CIT(A) ASSESSEE HAS PRE FERRED AN APPEAL BEFORE US. WE NOTED DUE TO BUSINESS EXIGENCIES BEYON D THE CONTROL OF THE ASSESSEE, THE ASSESSEE COULD NOT PAY THE SELF A SSESSMENT TAX AS THE TIME OF FILING OF THE RETURN OF INCOME, AS HE D ID NOT HAVE SUFFICIENT FUNDS TO IMMEDIATELY PAY THE SELF ASSESSMENT TAX. 7. WE HAVE GONE THROUGH THE RELEVANT RECORD AND HEAR D BOTH THE PARTIES. WE ARE OF THE VIEW THAT THE PENALTY IN PART CANNOT BE REDUCED. EITHER THE PENALTY SHOULD HAVE BEEN UPHELD OR SHOUL D HAVE BEEN DELETED BY THE CIT(A). ONCE THE CIT(A) IS SATISFIED THAT ASSESSEE COULD NOT DEPOSIT THE SELF ASSESSMENT TAX DUE TO SUFFICIE NT CAUSE AND REDUCED THE PENALTY, HE HAS TO DELETE THE PENALTY A S PER CIT(A) WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. ACC ORDINGLY, THE ORDER OF THE CIT(A) IS SET ASIDE AND DELETE THE PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (P.K. BANSAL) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 08/06/2016 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REG ISTRAR