SEAGREEN MARKETING P. LTD, MUMBAI V. ITO 8(3)_1, MUMBAI

ITA 3785/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62641 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 05-07-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BABAN D PATIL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.3785/M/2011 (ASSESSMENT YEAR: 2007-2008) M/S. SEAGREEN MARKETING P. LTD, VS THE INCOME TAX OFFICER 8(3) - 1, LOK BHAVAN, AAYAKAR BHAVAN, M.K. ROAD, LOK BHARATICOMPLEX, MUMBAI 400 020. MAROSHI ROAD, ANDHERI (E), MUMBAI 400 059. PAN: AAACS8365B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DEEPAK TRALSHAWALA RESPONDENT BY: SHRI BABAN D. PATIL, DR DATE OF HEARING: 05/07/2012 DATE OF PRONOUNCEMENT: 11/07/2012 O R D E R PER B. RAMAKOTAIAH, A.M. THIS IS AN APPEAL AGAINST THE ORDER OF LD CIT (A)-1 8, MUMBAI DATED 8.3.2011 U/S 221 CONFIRMING PENALTY OF RS. 8,20,229 /-. 2. THE ASSESSEE FILED RETURN OF INCOME FOR AY 2007-20 08 ON 8.10.2008. SELF ASSESSMENT TAX OF RS. 1,64,04,574/- WHICH WAS REQUIRED TO BE PAID ON OR BEFORE 8.10.2008, WAS NOT PAID BY THE ASSESSEE. T HE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICES AND ASSESSEE PAID AN AMOUNT OF R S. 10 LAKHS ON 23.12.2008. THE ASSESSEE SUBMITTED THAT IT WAS UNA BLE TO PAY DUE TO NON- AVAILABILITY OF FUNDS AS IT HAS ADVANCED FUNDS TO S ISTER CONCERN M/S. LOK HOUSING AND CONSTRUCTIONS LTD. WHICH HAD UNDERGONE SEVERE FINANCIAL CRUNCH DUE TO MARKET CONDITIONS. THE AO DID NOT AGREE AND LEVIED PENALTY OF 5% OF THE TAX DUE AT RS. 8,20,229/-. THE CIT (A) HAS CONFIRM ED THE SAME AFTER EXAMINING THE ADVANCES AND FUND FLOW FROM THE ASSESSEES ACCO UNT. 3. THE LD COUNSEL IN THE COURSE OF ARGUMENTS SUBMITTED THAT THE ASSESSING OFFICER HAS LEVIED PENALTY U/S 221(1) VID E THE ORDER DATED 2.1.2009 AT RS. 8,20,229/- AND ALSO FURTHER PENALTY OF RS. 25,8 0,915/- UNDER THE SAME SECTION VIDE THE ORDER DATED 16.3.2009 AS THE ASSES SEE COULD NOT PAY THE AMOUNT IN SPITE OF GIVING OPPORTUNITY. IT WAS FURT HER SUBMITTED THAT LATTER PENALTY WAS REDUCED BY THE CIT (A) TO 10% OF THE AM OUNT WHICH WAS COMPLETELY DELETED BY THE ITAT IN ITA NO.850/MUM/2010 DATED 30 .11.2010. IT WAS FURTHER SUBMITTED THAT IN THE CASE OF OTHER GROUP C ONCERN, ON THE SIMILAR FACTS WHERE ASSESSING OFFICER LEVIED PENALTY @ 5% OF THE DEMAND DUE, THE ITAT REDUCED TO 2.5% OF THE TAX IN THE CASE OF ITO VS. O RYX FINANCE AND INVESTMENTS PVT. LTD. IN ITA NO. 3815/MUM/2011 DATED 28.03.2012 . HE ALSO SUBMITTED THAT IN THE OTHER GROUP CONCERN OF OZONE FINANCE AN D INVESTMENTS PVT. LTD. IN ITA NO.5790/M/2009 DATED 9.9.2010 THE PENALTY WAS R EDUCED TO RS. 5 LAKHS. IT WAS HIS SUBMISSION THAT IN ASSESSEES OWN CASE T HE ITAT DELETED PENALTY FULLY SO, THE PENALTY LEVIED SHOULD BE DELETED. 4. THE LEARNED DR HOWEVER SUBMITTED THAT ASSESSEE IN S PITE OF GIVING MANY OPPORTUNITIES HAS NOT PAID SELF ASSESSMENT TAX AND THERE WAS LEVY PENALTY OF 5% IN THE IMPUGNED ORDER WHICH WAS THE F IRST OPPORTUNITY AND SINCE ASSESSEE HAS NOT PAID, ANOTHER PENALTY WAS LEVIED S UBSEQUENTLY WHICH WAS DELETED. SINCE THERE IS A DEFAULT BY THE ASSESSEE, HE SUBMITTED THAT THE PENALTY SHOULD BE CONFIRMED. 5. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED THE F ACTS ON RECORD. EVEN THOUGH THERE IS ON RECORD THAT ASSESSEE HAD UN DER IMMENSE PRESSURE AND FINANCIAL CONSTRAINTS, THESE FINANCIAL CONSTRAINTS SHOULD NOT COME IN THE WAY OF PAYING SELF ASSESSMENT TAX. AS NOTICED BY THE LD C IT (A), THE REASONS ARE NOT VALID AS ASSESSEE HAS AVAILABILITY OF FUNDS UPTO29- 12-06 AND COULD HAVE DISCHARGED ITS TAX LIABILITY. KEEPING IN MIND TH E FACT THAT THE ASSESSEE HAD UNDERGONE SEVERE FINANCIAL CONSTRAINTS SUBSEQUENTLY AND PENALTY WAS COMPLETELY DELETED BY THE ITAT IN ASSESSEES OWN CA SE ON A LATER ORDER, WE REDUCE THE PENALTY TO 2.5% FROM 5% LEVIED BY THE AO . ACCORDINGLY, THE PENALTY OAT 5% OF THE AMOUNT HAS BEEN REDUCED TO 2.5% OF TH E AMOUNT. IN ARRIVING AT THAT DECISION, WE HAVE KEPT IN MIND THE DECISION OF THE COORDINATE BENCHES IN OTHER GROUP CONCERNS. 6. IN THE RESULT, THE GROUND IS PARTLY ALLOWED AND APP EAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JULY, 2012. S D/ - SD/ - (D.K. AGARWAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED 11 TH JULY, 2012. OKK COPY TO: 1. M/S. SEAGREEN MARKETING P. LTD., MUMBAI. 2. ITO 8(3)-1, MUMBAI. 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI