M/s. Premier Distilleries Ltd., CHENNAI V. DCIT, Pondicherry

ITA 3185/CHNY/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5196 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 17-05-2017
• Assessment Year: 2014-2015
• Appeal Filed On: 21-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASISH TRIPATHY
• Assessee Lawyers: S SRIDHAR
• Keywords: Reasonable cause
• Section: 234B; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.3185/CHNY/2016 ( )( / ASSESSMENT YEAR : 2014-15 M/S PREMIER DISTILLERIES LTD., C/O SHRI S. SRIDHAR, SH. A.S. SRIRAMAN, ADVOCATES, NEW NO.14, OLD NO.82, FLAT NO.5, 1 ST AVENUE, INDIRA NAGAR, ADYAR, CHENNAI - 600 020. PAN : AACCP 0181 A V. THE DEPUTY COMMISSIONER OF INCOME TAX, PONDICHERRY CIRCLE, PONDICHERRY. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI ASISH TRIPATHY, JCIT 1 / 2% / DATE OF HEARING : 24.05.2018 3') / 2% / DATE OF PRONOUNCEMENT : 14.06.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, D ATED 19.10.2016, FOR THE ASSESSMENT YEAR 2014-15, CONFIRMING THE PEN ALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 221 OF THE INCOME-T AX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.3185/CHNY/16 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THE ASSESSING OFFICER LEIVED PENALTY UNDER SECTION 221 OF THE ACT SINCE THE ASSESSEE COULD NOT PAY THE SELF ASSESSMENT TAX OF 65,43,850/-. ACCORDING TO THE LD. COUNSEL, THE ASSESSEE WAS IN G REAT FINANCIAL HARDSHIP. IN FACT, THE ASSESSEE HAS PAID 46 LAKHS ON 14.03.2015 AND ANOTHER SUM OF 19,32,225/- ON 24.04.2015 AND THE BALANCE WAS ALSO PAID ALONG WITH INTEREST UNDER SECTION 234A, 234B A ND 234C OF THE ACT OVER AND ABOVE THE TAXES DUE. ACCORDING TO THE LD. COUNSEL, AS ON DATE, NO TAX WAS DUE TO BE PAID. 3. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , FURTHER SUBMITTED THAT IN FACT, THE ASSESSEE AVAILED OVERDR AFT FACILITY FOR BUSINESS. THE ASSESSEE EXCEEDED OVERDRAFT FACILITY SANCTIONED BY THE BANKER. THEREFORE, ACCORDING TO THE LD. COUNSEL, PRACTICALL Y, THE ASSESSEE HAS NO LIQUID CASH TO PAY THE SELF ASSESSMENT TAX WHEN THE RETURN WAS FILED. AS AND WHEN THE CASH WAS AVAILABLE WITH THE ASSESSEE, ACCORDING TO THE LD. COUNSEL, IT WAS IMMEDIATELY PAID ALONG WITH INTERES T UNDER SECTION 234A, 234B AND 234C OF THE ACT. HENCE, ACCORDING TO THE LD. COUNSEL, THERE WAS A REASONABLE CAUSE FOR NON PAYMENT OF SELF ASSE SSMENT TAX AS PROVIDED IN THE SECOND PROVISO TO SECTION 221 OF TH E ACT. 4. REFERRING TO THE ORDER OF THE CIT(APPEALS), SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT IN FACT , THE ASSESSEE FILED A 3 I.T.A. NO.3185/CHNY/16 PETITION BEFORE THE PRINCIPAL COMMISSIONER UNDER SE CTION 264 OF THE ACT AND THE SAME WAS REJECTED. ACCORDING TO THE LD. CO UNSEL, THE ASSESSEE FILED WRIT PETITION BEFORE THE HIGH COURT CHALLENGI NG THE CORRECTNESS OF THE ORDER PASSED BY THE PRINCIPAL COMMISSIONER UNDER SE CTION 264 OF THE ACT. THE HIGH COURT, IN FACT, SET ASIDE THE ORDER OF THE PRINCIPAL COMMISSIONER PASSED UNDER SECTION 264 OF THE ACT AN D REMANDED BACK THE MATTER. SINCE THE ASSESSEE HAS FILED REVISION PETITION UNDER SECTION 264 OF THE ACT, ACCORDING TO THE LD. COUNSEL, THE C IT(APPEALS) IN THE IMPUGNED ORDER FOUND THAT THE APPEAL IS NOT MAINTAI NABLE. REFERRING TO THE JUDGMENT OF MADRAS HIGH COURT IN CIT V. D. LAKS HMINARAYANAPATHI (2001) 250 ITR 187, THE LD.COUNSEL SUBMITTED THAT O N IDENTICAL SET OF FACTS, THE MADRAS HIGH COURT FOUND THAT THE APPEAL IS MAINTAINABLE. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE CIT(AP PEALS) IS NOT CORRECT IN REJECTING THE APPEAL OF THE ASSESSEE. 5. ON THE CONTRARY, SHRI ASISH TRIPATHY, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE COULD N OT PAY THE SELF ASSESSMENT TAX OF 65,43,850/-. MERE PAYMENT OF AMOUNT SUBSEQUENTLY CANNOT BE A REASON FOR NOT LEVYING PENALTY. ACCORD ING TO THE LD. D.R., THERE WAS NO REASONABLE CAUSE FOR NOT PAYING SELF A SSESSMENT TAX. HENCE, THE ASSESSING OFFICER IN ADDITION TO INTERES T HAS ALSO LEVIED PENALTY UNDER SECTION 221 OF THE ACT, WHICH WAS RIG HTLY CONFIRMED BY THE CIT(APPEALS). REFERRING TO THE JUDGMENT OF MADRAS HIGH COURT IN THE 4 I.T.A. NO.3185/CHNY/16 CASE OF D. LAKSHMINARAYANAPATHI (SUPRA), THE LD. D. R. SUBMITTED THAT THIS JUDGMENT OF MADRAS HIGH COURT IS NOT APPLICABL E TO THE FACTS OF THE CASE, THEREFORE, THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE APPEAL FILED BY THE ASSESSEE IS NOT MAINTAINABLE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE CIT(APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE ON THE GROUND THAT IT IS NOT MAINTAINABLE SINCE THE ASSESSEE HAS FILED PETITION BEFORE THE PRINCIPAL COMMISSIONER UNDER SECTION 264 OF THE ACT. PLACING RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN D. LAKSHMINARAYANA PATHI (SUPRA), THE LD.COUNSEL FOR THE ASSESSEE CLAIMS THAT ON IDENTICA L CIRCUMSTANCES, THE MADRAS HIGH COURT FOUND THAT THE APPEAL WAS MAINTAI NABLE. 7. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF M ADRAS HIGH COURT IN D. LAKSHMINARAYANAPATHI (SUPRA). IN THE C ASE BEFORE MADRAS HIGH COURT, THE ISSUE AROSE FOR CONSIDERATION WAS W HEN THE ASSESSEE HAS INVOKED REVISIONAL JURISDICTION OF COMMISSIONER , WHETHER THE ASSESSEE CAN FILE AN APPEAL BEFORE THE APPELLATE AU THORITY? THE MADRAS HIGH COURT FOUND THAT EVEN THOUGH FOR INVOKING REVI SIONAL JURISDICTION, IT IS A PRE-CONDITION THAT THE APPELLATE JURISDICTION SHO ULD NOT HAVE BEEN INVOKED. THERE IS NO BAR FOR FILING APPEAL WHEN TH E ASSESSEE HAS INVOKED REVISIONAL JURISDICTION. NOTWITHSTANDING UNSUCCESS FUL EFFORT OF THE 5 I.T.A. NO.3185/CHNY/16 ASSESSEE IN THE REVISIONAL PROCEEDING, STILL THE AS SESSEE CAN FILE AN APPEAL. IN FACT, THE MADRAS HIGH COURT HAS OBSERVE D AS FOLLOWS:- THOUGH THERE IS NO LIMITATION ON THE EXERCISE OF TH E APPELLATE POWER IN THE STATUTE ON THE GROUND THAT T HE ASSESSEE HAD INVOKED THE REVISIONAL POWER UNSUCCESSFULLY, IT IS CONTENDED FOR THE REVENUE THAT SUCH A LIMITATION SHOULD BE RE AD INTO THE PROVISION DEALING WITH APPEALS UNDER THE INCOME-TAX ACT. THERE IS NO PROVISION IN THE ACT IN EXPRESS TERMS, WHICH SUPP ORTS THE ARGUMENTS SO ADVANCED BY THE REVENUE. IT IS NOT DIS PUTED THAT THE PROVISIONS DEALING WITH THE APPELLATE AUTHORITIES D O NOT BAR AN APPELLANT FROM INVOKING THE JURISDICTION, IF HE HAD INVOKED REVISIONAL JURISDICTION, EVEN THOUGH FOR INVOKING R EVISIONAL JURISDICTION, IT IS A PRE-CONDITION THAT THE APPELL ATE JURISDICTION SHOULD NOT HAVE BEEN INVOKED. THE ARGUMENT ADVANCED BEFORE US IS THAT BY INFERENT IAL REASONING WE SHOULD HOLD THAT IF THERE IS A LIMITAT ION ON EXERCISE OF REVISIONAL POWER A SIMILAR LIMITATION SHOULD BE READ INTO THE EXERCISE OF THE APPELLATE POWER. IT DOES NOT REQUIRE ANY AUTHORITY TO HOLD THAT IT IS NOT THE PROVINCE OF THE COURT TO REWRITE THE LAW ON THE GROUND THAT THE PROVISION SHOULD HAVE BEEN W ORDED IN A DIFFERENT MANNER IN ORDER TO MAKE IT SEEMINGLY CONS ISTENT WITH SOME OTHER PROVISION. MOREOVER, IT IS WHOLLY UNNECE SSARY FOR PARLIAMENT TO IMPOSE THE SAME KIND OF RESTRICTION F OR INVOKING DIFFERENT KINDS OF JURISDICTION. IT IS OPEN TO THE LAW-MAKER TO PROVIDE MORE THAN ONE REMEDY TO THE AGGRIEVED PARTY AND SO LONG AS SUCH REMEDIES ARE AVAILABLE, THE AGGRIEVED PARTI ES CAN CERTAINLY INVOKE THEM. THE TRIBUNAL HAS RIGHTLY HELD THAT THE ASSESSEE, NOTWITHSTANDING HIS UNSUCCESSFUL EFFORT AT HAVING T HE ORDER REVISED, COULD STILL FILE AN APPEAL AS INVOKING THE REVISIONAL JURISDICTION COULD NOT CONSTITUTE A BAR TO THE FILI NG OF AN APPEAL. IT IS FOR THE LEGISLATURE TO IMPOSE SUCH A BAR IF IT C ONSIDERS IT NECESSARY TO DO SO. WE, THEREFORE, FIND NO ERROR IN THE ORDER OF THE TR IBUNAL. WE ANSWER THE QUESTION AS TO WHETHER, ON THE FACTS AND IN THE 6 I.T.A. NO.3185/CHNY/16 CIRCUMSTANCES OF THE CASE, THE APPELLATE TRIBUNAL W AS RIGHT IN HOLDING THAT THE APPELLATE ASSISTANT COMMISSIONER W AS JUSTIFIED IN ENTERTAINING THE ASSESSEES APPEAL AGAINST THE ASSE SSMENT EVEN THOUGH THE COMMISSIONER OF INCOME-TAX HAD PASSED AN ORDER UNDER SECTION 264 AGAINST THE ASSESSEE AND HOLDING THA T THE PROVISIONS OF SECTION 154 WERE APPLICABLE AND A REVIS ION WAS NOT BARRED BY LIMITATION IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. IN VIEW OF THE ABOVE JUDGMENT OF MADRAS HIGH COU RT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT WHEN THE ASSESSEE INVOKED REVISIONAL JURISDICTION UNDER SECTION 264 OF THE ACT, IT CANNO T CONSTITUTE A BAR FOR INVOKING THE APPELLATE JURISDICTION. THEREFORE, TH E JUDGMENT OF MADRAS HIGH COURT IS SQUARELY APPLICABLE TO THE FACTS OF T HE CASE. HENCE, THE APPEAL FILED BEFORE THE CIT(APPEALS) IS MAINTAINABL E. THEREFORE, THE CIT(APPEALS)S FINDING THAT THE APPEAL IS NOT MAINT AINABLE CANNOT BE UPHELD. 9. NOW COMING TO MERIT OF THE APPEAL, THE ASSESSEE ADMITTEDLY PAID THE TAX BELATEDLY ALONG WITH INTEREST UNDER SECTION 234A, 234B AND 234C OF THE ACT. IN VIEW OF THE SECOND PROVISO TO SECTI ON 221 OF THE ACT, UNLESS THERE WAS A GOOD AND SUFFICIENT REASON, THE ASSESSEE IS LIABLE TO PAY PENALTY IN ADDITION TO INTEREST. IN THE CASE B EFORE US, ASSESSEE CLAIMS THAT THE OVERDRAFT FACILITY AVAILED FROM THE BANK WAS EXCEEDED AND THE ASSESSEE HAS NO LIQUID CASH FOR MAKING PAYMENT. THIS FACT IS NOT DISPUTED BY THE REVENUE. WHEN THE ASSESSEE HAS AVA ILED OVERDRAFT FACILITY FROM THE BANK AND EXCEEDED THE LIMIT SANCT IONED BY THE BANK AND 7 I.T.A. NO.3185/CHNY/16 THE ASSESSEE HAS NO LIQUID CASH TO MAKE THE SELF AS SESSMENT TAX, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS A GOOD AND SUFFICIENT REASON FOR NOT MAKING PAYMENT OF SELF ASSESSMENT TA X. THEREFORE, IN VIEW OF THE SECOND PROVISO TO SECTION 221 OF THE AC T, THERE CANNOT BE ANY LEVY OF PENALTY. HENCE, THIS TRIBUNAL IS UNABLE TO UPHOLD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE PENALTY LEVIED BY THE ASSESSING O FFICER UNDER SECTION 221 OF THE ACT IS DELETED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 14 TH JUNE, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 14 TH JUNE, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A), PONDICHERRY 4. PRINCIPAL CIT, PONICHERRY 5. 7: -2 /DR 6. ;( < /GF.