MIDAS EVENTS P. LTD, MUMBAI V. ADDL CIT (TDS) RG 2, MUMBAI

ITA 3047/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3474 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-05-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 02-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PREMAND J
• Keywords: Opportunity of being heard; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO. 3047/MUM/2014,(A. Y : 2007-08) ITA NO. 3048/MUM/2014,(A. Y : 2008-09) ITA NO. 3049MUM/2014,(A. Y : 2008-09) ITA NO. 3050MUM/2014,(A. Y : 2009-10) M/S.MIDAS EVENTS PVT. LTD. 84,S.V.NAGAR, MHADA, ANDHERI (W), MUMBAI 400 053 PAN: AADCM 8984F ... APPELLANT VS. THE ADDL. CIT (TDS), RANGE-2, 701, SMT. K.G.MITTAL AYURVEDIC HOSPITAL BUILDING, CHARNI ROAD,(W), MUMBAI - 400002 .... RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI PREMAND J. DATE OF HEARING : 12/05/2016 DATE OF PRONOUNCEMENT : 18/05/2016 ORDER PER MAHAVIR SINGH, J.M: THESE FOUR APPEALS BY THE ASSESSEE ARE ARISING O UT OF DIFFERENT ORDERS OF CIT(A) -14, MUMBAI IN APPEAL NO. CIT(A)-1 4/TDS RG.2/IT- 1402/2011-12 DATED 17/02/2014 FOR ASSESSMENT YEAR 2007-08, IN APPEAL NO. CIT(A)-14/TDS RG.2/IT-1398/2011-12 DATE D 3/3/2014 FOR ASSESSMENT YEAR 2008-09, IN APPEAL NOS. CIT(A)-14 /TDS RG.2/IT-1395& 2 ITA NO. 3047 TO 3050 /MUM/2014 1399/2011-12 ORDER DATED 3/3/2014 FOR ASSESSMENT YEARS 2008-09 AND 2009-10. PENALTIES UNDER SECTION 271C OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) WAS LEVIED BY ADDL. CIT( TDS), RANGE-2, MUMBAI FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09 VIE HI S DIFFERENT ORDERS BOTH DATED 18/11/2010. PENALTY UNDER SECTION 272A( 2)(K) OF THE ACT WAS LEVIED BY ADDL. CIT(TDS), RANGE -2, MUMBAI VIDE HIS DIFFERENT ORDERS BOTH DATED 25/11/2010 FOR THE FINANCIAL YEAR 2007-08 AND 2008- 09. 2. AT THE OUTSET, IT IS NOTED THAT THE PENALTIES LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271C OF THE ACT FOR THE ASSESSMENT YEAR 2007-08 AND 2008-09 EX-PARTE. THE ASSESSING OFFICE R, NO DOUBT, HAS ALLOWED OPPORTUNITY OF HEARING BY ISSUING NOTICE BU T ONLY ONCE. NONE ATTENDED ON BEHALF OF THE ASSESSEE, NOR ANY WRITTEN SUBMISSION FILED. THE ASSESSING OFFICER PROCEEDED EX-PARTE AND LEVIED PENALTY BASED ON MATERIAL AVAILABLE BEFORE HIM. SIMILARLY, FOR PENA LTY UNDER SECTION 272A(2)(K) OF THE ACT FOR BOTH THE YEARS I.E. FINAN CIAL YEAR 2007-08 AND 2008-09, THE ASSESSING OFFICER SIMILARLY LEVIED THE PENALTY AS ABOVE. THE ASSESSEE BEFORE CIT(A) PLEADED THAT IT HAS INC URRED HUGE LOSSES AND ALSO TDS WAS DEDUCTED BY THE CLIENTS, THEY WERE OU TSTANDING WHICH WERE NOT PAID BY THE CLIENTS. HE PLEADED THAT HE H AS FACED CRITICAL TIME DUE TO THE FOLLOWING FACTORS:- A. IT HAD INCURRED AN EXORBITANT AMOUNT OF LOSS OF RS.39.99 LAKHS. B. THE TAX DEDUCTED AT SOURCE BY CLIENTS AMOUNTED T O RS.23.66 LAKHS. C. RECEIVABLES OUTSTANDING AMOUNTED TO RS.49.93 LAK HS. THE ASSESSEE PLEADED REASONABLE CAUSE BEFORE CIT(A) BUT CIT(A) IN ALL FOUR APPEALS SIMPLY DISMISSED THE APPEAL BY STATING THAT THE ASSESSEE IS 3 ITA NO. 3047 TO 3050 /MUM/2014 LIABLE TO DEDUCT TDS BUT HE FAILED TO DO SO. WE FI ND FROM THE ORDERS OF THE LOWER AUTHORITIES THAT THE CIT(A) HAS NOT GONE INTO REASONABLE CAUSE ADDUCED BY THE ASSESSEE AND NOT EXAMINE THE F ACTS RELATING TO REASONABLE CAUSE. EVEN ASSESSING OFFICER BASED ON AN EX-PARTE ORDER, WITHOUT PROVIDING REASONABLE OPPORTUNITY OF BEING H EARD LEVIED THE PENALTY IN BOTH THE YEARS UNDER SECTION 271C AS WEL L UNDER SECTION 272A(2)(K) OF THE ACT. GOING BY THE FACTS OF THE CA SE THAT ASSESSEE WAS NOT PROPERLY ALLOWED OPPORTUNITY AT THE FIRST STAGE I.E. BEFORE THE AO AND CIT(A) AT THE SECOND STAGE HAS NOT PASSED A SPE AKING ORDER ON REASONABLE CAUSE ADDUCED BY THE ASSESSEE. IN TERM OF THE ABOVE, WE ARE OF THE VIEW THAT THIS ISSUE NEEDS RECONSIDERATI ON AT THE LEVEL OF THE ASSESSING OFFICER AFRESH. NEEDLESS TO SAY, THE A SSESSING OFFICER WILL ALLOW REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AFTER FOLLOWING DUE PROCESS OF LAW. THE ASSESSEE WILL AL SO REPRESENT BEFORE THE ASSESSING OFFICER AS AND WHEN CALLED FOR. IN T ERMS OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND RE MAND THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR FRESH ADJUDICA TION ON THESE FOUR PENALTY APPEALS. 3. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 /05/ 2016 . SD/- SD/- (RAJESH KUMAR) (MAHAVIR SINGH) ACCOUNTNAT MEMBER JUDICIAL M EMBER MUMBAI, DATED 18/05/2016 VM , SR. PS 4 ITA NO. 3047 TO 3050 /MUM/2014 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. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI 5 ITA NO. 3047 TO 3050 /MUM/2014 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 12/5/2016 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 13/05/2016 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER