JBF INDUSTRIES LTD, MUMBAI V. ACIT CIR 4(2), MUMBAI

ITA 4593/MUM/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5214 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Next Hearing Date: 24-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Rectification of order; Application of stay
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J , BENCH, MUMBAI , BEFORE SHRI H.L.KARWA , PRESIDENT & SHRI N.K.BILLAIYA , AM ITA NO . 4593 / MUM/ 20 1 2 ( ASSESSMENT YEAR : 20 0 8 - 20 0 9 ) JBF INDUSTRIES LIMITED, EXPRESS TOWER, 8 TH FLOOR, NARIMAN POINT, MUMBAI - 400 021 VS. ACIT CIR - 4(2) MUMBAI PAN/GIR NO. : A A AC J 2575 J ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : DR. K.SHIVARAM & MR. RAHUL SARDA /REVENUE BY : MR. SHISHIR SRIVASTAVA DATE OF HEARING : 2 4 TH DATE OF PRONOUNCEMENT : 2 4 TH OCTOBER, 2013 O R D E R PER N.K.BILLAIYA , AM : THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF THE CIT(A) - 8 , MUMBAI , DATED 25 - 4 - 2012 , PERTAINING TO ASSESSMENT YEAR 20 0 8 - 200 9 . 2 . THE SHORT GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNED CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 221(1) OF THE ACT AMOUNTING TO RS. 1,00,000/ - . 3 . THE ROUTES FOR LEVY OF PENALTY LIE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) ON 23 - 12 - 2010 DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.103,53,85,070/ - RESULTING INTO A DEMAND OF RS.21,43,29,534/ - . THE AO LEVIED THE PENALTY ON ASSESSEES DEFAULT FOR NOT PAYING TAX. ITA NO. 4593 / 1 2 2 4 . THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) BUT FAILED TO CONVINCE THE CIT(A) THAT THE DEFAULT WAS FO R GOOD AND SUFFICIENT REASONS. 5 . BEFORE US, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD VERY GOOD AND SUFFICIENT REASONS FOR NOT PAYING THE DEMAND RAISED BY THE ASSESSMENT ORDER DATED 23 - 12 - 2010. THEREFORE, THE PENALTY SO LEVIED DES ERVES TO BE CANCELLED. 6. PER CONTRA , LEARNED DR STRONGLY SUPPORTING THE FINDINGS OF THE CIT(A) SUBMITTED THAT THE ASSESSEE DID NOT HONOUR THE INSTALLMENTS GRANTED TO IT BY THE CIT(A) AND, THEREFORE, THE AO HAS RIGHTLY LEVIED PENALTY UNDER SECTION 2 2 1(1) OF THE ACT. 7 . WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL EVIDENCE BROUGHT ON RECORD IN THE FORM OF A PAPER BOOK. THE EVIDENCES ON RECORD SHOW THAT IMMEDIATELY AFTER THE ASSESSMENT ORDER, THE ASSESSEE FILED AN APPL ICATION UNDER SECTION 154 OF THE ACT ON 7 - 2 - 2011, POINTING OUT 11 MISTAKES , WHICH WERE APPARENT FROM RECORD. THE AO PASSED RECTIFICATION ORDER ON 23 - 2 - 2011 AND REVISED THE DEMAND TO RS. 11,18,55,167/ - . HOWEVER, TO THE SURPRISE OF THE ASSESSEE, THE AO HAS NO T DEALT WITH ALL THE ERRORS POINTED OUT BY THE ASSESSEE. THEREFORE, THE ASSESSEE ONCE AGAIN FILED AN APPLICATION ON 15 - 6 - 2011, WHICH IS EXHIBITED AT PAGE 21 OF THE PAPER BOOK POINTING OUT TO THE AO THE REMAINING ERRORS WHICH NEED TO BE RECTIFIED. THE ASSES SEE DID NOT RECEIVE ANY RESPONSE FROM THE AO IN RESPECT OF THIS ITA NO. 4593 / 1 2 3 APPLICATION . THEREAFTER THE ASSESSEE FILED A STAY APPLICATION BEFORE THE CIT ON 9 - 3 - 2011. THE CIT VIDE ORDER DATED 28 - 3 - 2011 DIRECTED THE AO TO DISPOSE OFF THE RECTIFICATION APPLICATION, ADJUS T REFUND OF SUBSEQUENT YEAR AND THEN ALLOW FOUR INSTALLMENTS OF PAYMENT OF TAX DEMAND, IF ANY. THE AO DID NOT COMPLY WITH THE DIRECTIONS OF THE CIT, INSTEAD VIDE NOTICE DATED 9 - 6 - 2011 UNDER SECTION 221 , SOUGHT EXPLANATION FROM THE ASSESSEE AS TO WHY THE PE NALTY SHOULD NOT BE LEVIED UNDER SECTION 221(1) OF THE ACT AND WENT ON TO LEVY THE PENALTY OF RS. 1,00,000/ - UNDER SECTION 221(1) VIDE ORDER DATED 30 - 6 - 2011 . THOUGH THE PENALTY ORDER IS DATED 30 - 6 - 2011, THE CIT(A) HAS ALREADY ALLOWED THE QUANTUM APPEAL OF THE ASSE SSEE IN PART VIDE ORDER DATED 27 - 6 - 2011. BY THIS ORDER OF THE CIT(A) , THE DEMAND WAS SUBSTANTIALLY REDUCED. THESE MATERIAL EVIDENCES ON RECORD CLEARLY SHOW THAT THE DEFAULT OF THE ASSESSEE WAS FOR GOOD AND SUFFICIENT REASONS AND THE ASSESSEE IS SAVED BY TH E LEVY OF PENALTY BY VIRTUE OF THE SECOND PROVISO TO SECTION 221(1) OF THE ACT. ACCORDINGLY, WE D IRECT THE AO TO CANCEL THE PENALTY. 8 . RESULTANTLY , THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 2 4 /10/ 2013 . SD/ - ( ) ( H.L.KARWA ) SD/ - ( ) ( N.K .BILLAIYA ) / PRESIDENT / ACCOUNTANT MEMBER MUMBAI ; DATED : 2 4 /10 /2013 /PKM , PS ITA NO. 4593 / 1 2 4 COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPO NDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI