ACIT, Bhiwani V. M/s Vikas WSP Ltd., Bhiwani

ITA 4304/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97466 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 10-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 16-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: SUNIL MATHUR ITP

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA BEFORE SHRI G.C. GUPTA, VICE , VICE , VICE , VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI, , , , ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NO S SS S . .. . 4304/DEL/2013 & 4305/DEL/2013 4304/DEL/2013 & 4305/DEL/2013 4304/DEL/2013 & 4305/DEL/2013 4304/DEL/2013 & 4305/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2009 2009 2009 2009 - -- - 10 & 2008 10 & 2008 10 & 2008 10 & 2008 - -- - 09 0909 09 ASSISTANT COMMISSIONER ASSISTANT COMMISSIONER ASSISTANT COMMISSIONER ASSISTANT COMMISSIONER OF OF OF OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, BHIWANI. BHIWANI. BHIWANI. BHIWANI. VS. VS. VS. VS. M/S VIKAS WSP LIMITED, M/S VIKAS WSP LIMITED, M/S VIKAS WSP LIMITED, M/S VIKAS WSP LIMITED, RAILWAY ROAD, RAILWAY ROAD, RAILWAY ROAD, RAILWAY ROAD, VPO. SIWANI, VPO. SIWANI, VPO. SIWANI, VPO. SIWANI, DISTRICT BHIWANI, DISTRICT BHIWANI, DISTRICT BHIWANI, DISTRICT BHIWANI, HARYANA. HARYANA. HARYANA. HARYANA. PAN : AAACV7816Q. PAN : AAACV7816Q. PAN : AAACV7816Q. PAN : AAACV7816Q. (APPELLANT) (RESPONDENT) ITA NO ITA NO ITA NO ITA NO S.4003/DEL/2013 & 4004/DEL/2013 S.4003/DEL/2013 & 4004/DEL/2013 S.4003/DEL/2013 & 4004/DEL/2013 S.4003/DEL/2013 & 4004/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR S SS S : : : : 2008 2008 2008 2008 - -- - 09 & 2009 09 & 2009 09 & 2009 09 & 2009 - -- - 10 1010 10 M/S VIKAS M/S VIKAS M/S VIKAS M/S VIKAS WSP LIMITED, WSP LIMITED, WSP LIMITED, WSP LIMITED, RAILWAY ROAD, RAILWAY ROAD, RAILWAY ROAD, RAILWAY ROAD, VPO. SIWANI, VPO. SIWANI, VPO. SIWANI, VPO. SIWANI, DISTRICT BHIWANI, DISTRICT BHIWANI, DISTRICT BHIWANI, DISTRICT BHIWANI, HARYANA. HARYANA. HARYANA. HARYANA. PAN : AAACV7816Q. PAN : AAACV7816Q. PAN : AAACV7816Q. PAN : AAACV7816Q. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, BHIWANI. BHIWANI. BHIWANI. BHIWANI. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI O.P. MEENA, CIT - DR. ASSESSEE BY : SHRI SUNIL MATHUR, ITP. DATE OF HEARING : 10.09.2015 10.09.2015 10.09.2015 10.09.2015 DATE OF PRONOUNCEMENT : 05.10.2015 05.10.2015 05.10.2015 05.10.2015 ORDER ORDER ORDER ORDER PER BENCH PER BENCH PER BENCH PER BENCH : :: : THESE CROSS-APPEALS BY THE REVENUE AND THE ASSESSEE FOR T HE ASSESSMENT YEARS 2008-09 AND 2009-10 ARE DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), ROHTAK DATED 2 ND MAY, 2013. THESE ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA-4304/D/2013 & 3 OTHERS 2 2. THE ASSESSEE HAS MOVED AN APPLICATION FOR ADJOURNMENT OF THE CASE WHICH WAS REJECTED BY THE BENCH. 3. THE GROUNDS OF APPEAL OF THE REVENUE IN ASSESSMENT Y EAR 2008- 09 ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN REDUCING THE PENAL TY FROM 50% TO 10% OF THE OUTSTANDING DEMAND ON ACCOUNT OF SE LF ASSESSMENT TAX; LEVIED BY THE AO U/S 221(1) READ WITH SECTION 140A(3) OF THE IT ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) FAILED TO APPRECIATE THAT QUANTUM OF PENALTY LEVIED BY THE JCIT, BHIWANI RANGE, BHIWANI IS REASONA BLE, FAIR AND APPROPRIATELY LEVIED @ 50% OF THE TOTAL DE MAND OUTSTANDING ON ACCOUNT PAYMENT OF SELF ASSESSMENT TAX. THE MAXIMUM PENALTY LEVIABLE U/S 221(1) OF THE IT AC T IS EQUAL TO THE AMOUNT OF TAX IN ARREARS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN ALLOWING THE RELIE F BY RELYING ON THE DECISION OF DELHI HIGH COURT PASSED IN THE CASE OF CIT(TDS) DELHI-XVII VS. GLOBAL INFOSYSTEMS LTD. [2007] 165 TAXMAN 486 (DEL.). THE FACTS AND CIRCUMSTANCES OF THE CASE OF M/S GLOBAL INFOSYSTEMS LTD. ARE NOT SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THIS C ASE AS THE PENALTY IN M/S GLOBAL INFOSYSTEMS LTD. WAS IMPOSE D ON DELAYED PAYMENT OF TDS AND IN THIS CASE, THE PENAL TY IS ON ACCOUNT OF NON-PAYMENT OF OUTSTANDING DEMAND OF SELF ASSESSMENT WHICH WAS DETERMINED BY THE ASSESSEE ITSELF AT THE TIME OF FILING RETURN OF INCOME AND LATER ON ALSO, ASSESSEE DEFAULTED AFTER TAKING UPON ITSELF THE RESPONSIBILITY OF PAYMENT THROUGH INSTALMENTS. 4. THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT THE JOINT COMMISSIONER OF INCOME TAX, BHIWANI RANGE, BHIWANI HA S PASSED THE SUBJECT ORDER AFTER DULY APPLICATION OF MIN D AND USING HIS DISCRETION IN FAIR AND LOGICAL WAY. ITA-4304/D/2013 & 3 OTHERS 3 4. THE GROUNDS OF APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2008-09 ARE AS UNDER:- 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS), ROHTAK HAS ERRED IN RESTRICTING THE PENALTY LEVIED U/S 221(1) TO 10% OF THE OUTSTANDING TAX DEMAN D, WHICH WORKS TO RS.1,04,66,483/-. 2. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, I T IS SUBMITTED THAT THE ACTION OF THE WORTHY CIT(A) IN RESTRICTING THE PENALTY LEVIED U/S 221(1) TO 10% OF T HE TAX DEMAND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE GROUNDS OF APPEAL OF THE REVENUE IN ASSESSMENT Y EAR 2009- 10 ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN REDUCING THE PENAL TY FROM 50% TO 10% OF THE OUTSTANDING DEMAND ON ACCOUNT OF SE LF ASSESSMENT TAX; LEVIED BY THE AO U/S 221(1) READ WITH SECTION 140A(3) OF THE IT ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) FAILED TO APPRECIATE THAT QUANTUM OF PENALTY LEVIED BY THE JCIT, BHIWANI RANGE, BHIWANI IS REASONA BLE, FAIR AND APPROPRIATELY LEVIED @ 50% OF THE TOTAL DE MAND OUTSTANDING ON ACCOUNT PAYMENT OF SELF ASSESSMENT TAX. THE MAXIMUM PENALTY LEVIABLE U/S 221(1) OF THE IT AC T IS EQUAL TO THE AMOUNT OF TAX IN ARREARS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW IN ALLOWING THE RELIE F BY RELYING ON THE DECISION OF DELHI HIGH COURT PASSED IN THE CASE OF CIT(TDS) DELHI-XVII VS. GLOBAL INFOSYSTEMS LTD. [2007] 165 TAXMAN 486 (DEL.). THE FACTS AND CIRCUMSTANCES OF THE CASE OF M/S GLOBAL INFOSYSTEMS LTD. ARE NOT SIMILAR TO THE FACTS AND CIRCUMSTANCES OF THIS C ASE AS THE PENALTY IN M/S GLOBAL INFOSYSTEMS LTD. WAS IMPOSE D ON DELAYED PAYMENT OF TDS AND IN THIS CASE, THE PENAL TY IS ON ACCOUNT OF NON-PAYMENT OF OUTSTANDING DEMAND OF SELF ASSESSMENT WHICH WAS DETERMINED BY THE ASSESSEE ITSELF ITA-4304/D/2013 & 3 OTHERS 4 AT THE TIME OF FILING RETURN OF INCOME AND LATER ON ALSO, ASSESSEE DEFAULTED AFTER TAKING UPON ITSELF THE RESPONSIBILITY OF PAYMENT THROUGH INSTALMENTS. 4. THE CIT(A) HAS ERRED IN NOT APPRECIATING THAT THE JOINT COMMISSIONER OF INCOME TAX, BHIWANI RANGE, BHIWANI HA S PASSED THE SUBJECT ORDER AFTER DULY APPLICATION OF MIN D AND USING HIS DISCRETION IN FAIR AND LOGICAL WAY. 6. THE GROUNDS OF APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10 ARE AS UNDER:- 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS), ROHTAK HAS ERRED IN RESTRICTING THE PENALTY LEVIED U/S 221(1) TO 10% OF THE OUTSTANDING TAX DEMAN D, WHICH WORKS TO RS.1,65,67,048/-. 2. NOTWITHSTANDING THE ABOVE SAID GROUND OF APPEAL, I T IS SUBMITTED THAT THE ACTION OF THE WORTHY CIT(A) IN RESTRICTING THE PENALTY LEVIED U/S 221(1) TO 10% OF T HE TAX DEMAND IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. LEARNED DR SUBMITTED THAT LEARNED CIT(A) HAS GROSSLY ERRED IN REDUCING THE PENALTY FROM 50% TO 10% OF THE OUTSTAND ING DEMAND ON ACCOUNT OF SELF ASSESSMENT TAX LEVIED BY THE ASSESSING OFFI CER U/S 221(1) READ WITH SECTION 140A(3) OF THE INCOME-TAX ACT, 1961. HE SUBMITTED THAT THE MAXIMUM PENALTY LEVIABLE U/S 221(1 ) OF THE ACT WAS EQUAL TO THE AMOUNT OF TAX IN ARREARS, WHEREAS THE A SSESSING OFFICER WAS REASONABLE AND APPROPRIATELY LEVIED THE PENALTY O N 50% OF THE TOTAL DEMAND AND NO REASON HAS BEEN GIVEN BY THE CIT( A) FOR REDUCING THE PENALTY TO 10% OF THE OUTSTANDING DEMAND. HE RE LIED ON THE DECISION OF COCHIN BENCH OF THE TRIBUNAL IN HOPE MIC RO CREDIT FINANCE (P) LTD. VS. ACIT [2014] 47 TAXMANN.COM 422 (COCHI N-TRIB.), OF MUMBAI BENCH OF THE TRIBUNAL IN DIAMONDSTAR EXPORTS L TD. VS. ITO [2014] 147 ITD 59 (MUMBAI-TRIB.), OF HONBLE MADRAS HIGH COURT IN ITA-4304/D/2013 & 3 OTHERS 5 NACHIMUTHU INDUSTRIAL ASSOCIATION VS. CIT [1980] 123 ITR 611 (MAD.) AND OF HONBLE ANDHRA PRADESH HIGH COURT IN CIT VS. S REERAMA & CO. [1975] 101 ITR 531 (AP) IN SUPPORT OF THE CASE OF THE REVENUE. 8. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS SUBMITT ED THAT THE ASSESSEE HAS PAID THE ENTIRE DEMAND AND HAS ALSO SUFFE RED THE INTEREST FOR LATE PAYMENT THEREOF AND, THEREFORE, SHO ULD NOT BE VISITED WITH PENALTY U/S 221(1) READ WITH SECTION 140A(3) OF THE ACT. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE PER USED THE ORDER OF THE ASSESSING OFFICER AND LEARNED CIT(A). WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF GUA R GUM AND HAS NOT PAID ANY ADVANCE TAX AND THE TAX PAYABLE UND ER SELF ASSESSMENT TAX AT THE TIME OF FILING OF THE RETURN OF I NCOME. THE RETURN WAS PROCESSED FOR THE ASSESSMENT YEAR 2008-09 U/S 143(1) OF THE ACT AND THE TOTAL DEMAND INCLUDING INTEREST OF `10,46,6 4,830/- WAS RAISED. HOWEVER, THE ASSESSEE HAS MADE ONLY PART PAYMENT OF THE DEMAND ON VARIOUS DATES FROM 20 TH AUGUST, 2010 TO 20 TH JANUARY, 2011 TOTALLING TO `4,25,00,000/-. THE INSTALLMENTS GIVEN BY THE DEPART MENT WERE PARTLY HONORED BY THE ASSESSEE AND THERE WERE DEFAULTS ALSO IN MAKING THE PAYMENT ON THE DUE DATES AS PER THE INSTALLMENT ORDER. WE FIND THAT FOR THE ASSESSMENT YEAR 2008-09, THE ASSESSEE HAS PAID THE E NTIRE DEMAND OF `10.46 CRORES EXCEPT THAT OF `1,21,64,826/ - BEFORE THE DATE OF PASSING OF PENALTY ORDER U/S 221(1) ON 17.11.2011. THE CIT(A) HAS RECORDED THAT THE ASSESSEE HAS PAID THE ENTIRE DEMAND FO R BOTH THE ASSESSMENT YEARS 2008-09 AND 2009-10 ALONG WITH THE AMOU NT DUE U/S 220(2) BY 29.03.2012. THE PROVISION OF SECTION 221( 1) DOES NOT SPECIFY ANY MINIMUM PENALTY BUT SPECIFIES THAT TOTAL AMOUNT OF PENALTY SHALL NOT EXCEED THE AMOUNT OF TAX IN ARREARS. CONSID ERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, LEARNED CIT(A) WAS OF THE VIEW ITA-4304/D/2013 & 3 OTHERS 6 THAT PENALTY AT 50% OF THE OUTSTANDING DEMAND WAS VER Y HARSH AND UNJUSTIFIED. HE HAS CITED THE DECISION OF HON'BLE DEL HI HIGH COURT IN CIT VS. GLOBAL INFOSYSTEMS LTD. [2007] 165 TAXMAN 486 (DE L) AND HAS HELD THAT IT WOULD BE DEEMED FAIR AND REASONABLE TO LIMIT THE PENALTY TO 10% OF THE OUTSTANDING DEMAND AND REDUCE THE PENALTY U/S 221(1) TO `1.04 CRORES FOR ASSESSMENT YEAR 2008-09 AND TO `1.65 LA KHS FOR ASSESSMENT YEAR 2009-10. WE FIND THAT THE ASSESSEE HAS PAID THE ENTIRE DEMAND ALONG WITH INTEREST THEREON BY 29.03.2 012. WE ARE AWARE THAT THE PAYMENT OF THE ENTIRE TAX WITH INTER EST SHALL NOT ABSOLVE THE ASSESSEE FROM PENALTY PROVIDED U/S 221(1) OF THE ACT . HOWEVER, THE PENALTY IMPOSED U/S 221(1) OF THE ACT SHOULD BE R EASONABLE CONSIDERING THE FACTS AND CIRCUMSTANCES OF EACH CASE. T HE CIT(A) HAS PASSED A DETAILED SPEAKING ORDER FOR REDUCING THE PENA LTY TO 10% OF THE OUTSTANDING DEMAND. WE ARE OF THE VIEW THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE, THE PENALTY I MPOSED AT 10% OF THE OUTSTANDING DEMAND FOR BOTH THE ASSESSMENT Y EARS U/S 221(1) OF THE ACT READ WITH SECTION 140A(3) OF THE ACT WAS JUST AND FAIR AND NO INTERFERENCE IN THE ORDER OF LEARNED CIT(A) IS CALLED FOR. ACCORDINGLY, THE ORDER OF LEARNED CIT(A) FOR BOTH T HE ASSESSMENT YEARS IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE AND THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED. 10. IN THE RESULT, THE APPEALS OF THE REVENUE AND THE APPEALS OF THE ASSESSEE FOR BOTH THE ASSESSMENT YEARS ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 5 TH OCTOBER, 2015. SD/- SD/- ( (( ( PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI PRASHANT MAHARISHI ) )) ) (G. (G. (G. (G. C. GUPTA C. GUPTA C. GUPTA C. GUPTA ) )) ) ACCOUNTANT ACCOUNTANT ACCOUNTANT ACCOUNTANT MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VK. ITA-4304/D/2013 & 3 OTHERS 7 COPY FORWARDED TO: - 1. REVENUE : ASSISTANT COMMISSIONER OF INCOME TA X, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, BHIWANI. BHIWANI. BHIWANI. BHIWANI. 2. ASSESSEE : M/S VIKAS WSP LIMITED, RAILWAY ROAD, M/S VIKAS WSP LIMITED, RAILWAY ROAD, M/S VIKAS WSP LIMITED, RAILWAY ROAD, M/S VIKAS WSP LIMITED, RAILWAY ROAD, VPO. SIWANI, DISTRICT BHIWANI, HARYANA. VPO. SIWANI, DISTRICT BHIWANI, HARYANA. VPO. SIWANI, DISTRICT BHIWANI, HARYANA. VPO. SIWANI, DISTRICT BHIWANI, HARYANA. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR