AGIO PHARMACEUTICLS LTD, MUMBAI V. ACIT 8(1), MUMBAI

ITA 599/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55655 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-10-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 25-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: MUMBAI BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.599/MUM/2010 (ASSESSMENT YEAR: 2007-08) M/S. AGIO PHARMACEUTICALS LTD., A-38, NANDJYOT INDUSTRIAL ESTATE, ANDHERI KURLA ROAD, ANDHERI (EAST), MUMBAI -400 072 ....... APPELLANT VS ACIT 8(1) MUMBAI ..... RESPONDENT PAN: AAFPK 8037 Q APPELLANT BY: SHRI M. SUBRAMANIAN RESPONDENT BY: SHRI C.G.K. NAIR DATE OF HEARING: 27.10.2011 DATE OF PRONOUNCEMENT: 27.10.2011 O R D E R PER R.S. PADVEKAR, J.M. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE IMPU GNED ORDER OF THE LD. CIT (A)-16 MUMBAI DATED 04.11.2009 FOR T HE A.Y. 2007-08 IN WHICH THE PENALTY LEVIED BY THE A.O. OF ` 5 LAKH HAS BEEN CONFIRMED. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN CONFIRMING THE PENALTY OF ` 5,00,000/- (FIVE LAKH ONLY) U/S.221 OF THE INCOME TAX ACT, 1961 IMPOSED B Y THE ITA 599/MUM/2010 M/S. AGIO PHARMACEUTICALS LTD. 2 ASST. COMMISSIONER OF INCOME TAX -8(1), WHICH YOUR HONOUR IS REQUESTED TO ORDER TO DELETE. 2. BRIEFLY STATED THE FACTS ARE AS UNDER. FOR THE A.Y. 2007-08 THE ASSESSEE WAS REQUIRED TO PAY THE SELF-ASSESSMENT TA X OF ` 20 LAKHS ON OR BEFORE 31.10.2007. IT WAS NOTICED BY THE A.O. T HAT THE ASSESSEE HAS FAILED TO PAY THE SAME. AS NOTED BY THE A.O. IN TH E PENALTY ORDER, SHOW CAUSE NOTICE DATED 25.11.2008 WAS ISSUED SEEKI NG THE EXPLANATION OF THE ASSESSEE WHY HE SHOULD NOT BE TR EATED AS AN ASSESSEE IN DEFAULT U/S.140A(3) OF THE ACT IN RESPECT OF THE UNPAID TAX. AS PER THE PENALTY ORDER THERE WAS NO RESPONS E OR REPLY BY THE ASSESSEE. THE A.O., THEREFORE, LEVIED THE PENALTY OF ` 5 LAKHS U/S.221(1) OF THE ACT, WHICH WAS WORKED OUT AT 25% OF SELF- ASSESSMENT TAX PAYABLE BY THE ASSESSEE. THE ASSESS EE CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT (A) BUT WITHOUT SU CCESS. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. THE LD. COUNSEL VEHEMENTLY ARGUES THA T THE ASSESSEE HAS NEVER RECEIVED ANY SHOW CAUSE NOTICE ALLEGEDLY ISSUED BY THE A.O. HE FURTHER SUBMITS THAT THE PENALTY ORDER IS NOT ON LY IRREGULAR BUT ALSO ILLEGAL ORDER AS THE ASSESSEE HAS NOT BEEN GIV EN OPPORTUNITY TO MEET THE ALLEGATIONS IN THE SHOW CAUSE NOTICE ISSUE D BY THE A.O. AS THE SHOW CAUSE NOTICE WAS NEVER RECEIVED BY THE ASS ESSEE. HE ALSO TOOK US THROUGH THE ORDER OF THE LD. CIT (A) AND SU BMITS THAT THOUGH THIS ASPECT WAS BROUGHT TO THE NOTICE OF THE LD. CI T (A), THERE IS NO DISCUSSION AT ALL IN THE IMPUGNED ORDER. WE HAVE A LSO HEARD THE LD. D.R. 4. WE FIND FORCE IN THE ARGUMENT OF LD. COUNSEL. THOUGH THE LD. D.R. HAS PRODUCED A FOLDER CLAIMING THAT NOTICE WAS ISSUED BUT THERE IS NO PROOF OF SERVICE OF THE NOTICE. WITH THE CON SENT OF BOTH THE PARTIES, WE RESTORE THIS MATTER BACK TO THE FILE OF THE LD. CIT (A) TO ITA 599/MUM/2010 M/S. AGIO PHARMACEUTICALS LTD. 3 DECIDE THE ISSUE RAISED BY THE ASSESSEE WHETHER IF THE ASSESSEE HAS NOT RECEIVED ANY NOTICE OR IF THERE IS NO PROPER SE RVICE OF THE NOTICE ON THE ASSESSEE; THEN WHETHER IMPUGNED PENALTY ORDER H AS TO BE QUASHED. THE CIT (A) IS DIRECTED TO VERIFY THE REC ORDS OF THE A.O. AND AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE TO DECIDE THE MATTER ON THIS ISSUE. ACCORDINGLY, GROU ND IS ALLOWED FOR THE STATISTICAL PURPOSES. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 7TH OCTOBER, 2011. SD/- SD/- ( T.R. SOOD ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE : 27TH OCTOBER, 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-16, MUMBAI. 4) THE CIT-VIII, MUMBAI. 5) THE D.R. D BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN ITA 599/MUM/2010 M/S. AGIO PHARMACEUTICALS LTD. 4 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 27.10.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 27.10.2011 SR.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 FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER