M/s. Kapsons Electrostampings, Jalandhar city V. The Dy. Commissioner of Income-tax, RANGE -1, Jalandhar

ITA 696/ASR/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2193 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-03-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 10-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K VATTA LD
• Keywords: TDS; Set aside
• Section: 143(1); 200A; 139(1); 139(4); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. N.K.CHOUDHRY, JUDICIAL MEMBER AND SH. ANADEE NATH MISSHRA, ACCOUNTANT MEMBER ITA NO.696/ASR/2017 ASSESSMENT YEAR: 2014-15 KAPSONS ELECTROSTAMPINGS, G.T. ROAD, SURANUSSI, JALANDHAR CITY. VS. DY. COMMISSIONER OF INCOME TAX, JALANDHAR CITY. [PAN:AACFK 7956K] (APPELLANT) (RESPONDENT) APPELLANT BY : SH . S.K. VATTA, (LD. CA) RESPONDENT BY: SH. CHARAN DASS (LD. SR. DR) DATE OF HEARING: 1 6.03.2020 DATE OF PRONOUNCEM ENT: 17.03.2020 ORDER PER ANADEE NATH MISSHRA, AM: THE INSTANT APPEAL HAS BEEN PREFERRED BY THE ASSESS EES AGAINST THE ORDER DATED 04.09.2017 PASSED BY THE LEARNED. CIT(APPEALS ), JALANDHAR U/S 250(6) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS TH E ACT). THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL. 1. WHETHER ON THE FACTS OF THE CASE AND IN LAW, IN ABS ENCE OF ANY DEMAND NOTICE ISSUED U/S 156 OF THE ACT AND ALSO IN VIEW O F THE FACT ON RECORD THAT THE RETURN OF INCOME FOR THE CITED ASSTT. YEAR 2014-15 WA S ITSELF DECLARED DEFECTIVE AND NON EST U/S 139(9) OF THE INCOME TAX ACT BY CPC CELL AND CONSEQUENTLY THERE WAS NO EXISTING DEMAND OUTSTANDING AS PER RECORDS, THE WORTHY CIT(A), WAS JUSTIFIED WHILE SUSTAINING ORDER IMPOSING PENALTY U/S 221(1) OF THE ACT, ON THE FACTS OF THE CASE AND IN VIEW OF THE GIST OF THE LEGAL CITATION PLACED ON RECORD ? 2. THAT THE WORTHY CIT(A) WAS WRONG AND UNJUST IFIED TO HAVE SUMMARILY IGNORED THE FACTS AND ARGUMENTS AS TO THE FINANCIAL CONSTRAINT AND ASSESSEE'S INABILITY TO MAKE PAYMENT AS PER SUBMISSIONS ON REC ORD INCLUDING EVEN REQUEST AND NO OBJECTION BY THE ASSESSEE AND ASESSEE'S ASSO CIATE ENTITY FOR ADJUSTMENT OF ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 2 THE PAYMENTS AGAINST DETERMINED REFUND DUE AFTER TH E APPEAL EFFECT, OF THE SAID ASSOCIATE ENTITY. 3. THAT THE WORTHY CIT(A) HAVE ALSO IGNORED T HE FACTS THAT THE NOTICE OF RECOVERY OF THE TAX U/S 221(1) DATED 12.07.2106 REFER TO THE SUM OF RS.22,14,320/- WHEREAS THE SAID NOTICE ITSELF WAS NOT REFERRING TO CORRECT AMOUNT AS THE ASSESSEE HAD PAID THE SUM OF RS.10.00 LACS ON 23.06.2016 AND THE WHOLE AMOUNT STOOD PAID BY 21.07.2016, EVEN PRIOR TO THE SAID DATE OF HEARING OF THE NOTICE U/S 221(1) AND DEFAULT, IF ANY, WAS ALREADY MADE GOOD. 4. THAT THE WORTHY CIT (A) AND ASSESSING OFFICER B OTH HAVE BEEN WRONG AND UNJUSTIFIED IN SUSTAINING/IMPOSING PENALTY U/S 221( 1) OF THE ACT, AND THE SAID IMPOSITION OF THE PENALTY U/S 221(1) CANNOT BE AN A UTOMATIC CONSEQUENCE OF DEFAULT FOR NON PAYMENT OF TAX AS PRAYED AND IN VIEW OF T HE LEGAL CITATIONS PLACED ON RECORD, WHICH ALSO HAVE SUMMARILY BEEN IGNORED. 5. THAT THE ASSESSEE CRAVES TO ADD, MODIFY, ALTER, DELETE ANY GROUNDS OF APPEAL DURING THE COURSE OF PENALTY PROCEEDINGS. I, N. K. SEHGAL, THE APPELLANT DO HEREBY DECLARE TH AT WHAT IS STATED ABOVE IS TRUE TO THE BEST OF MY INFORMATION AND BELIEF. 2. VIDE IMPUGNED ORDER DATED 28.07.2016 U/S 221(1) R.W.S.140A(3) OF INCOME TAX ACT, 1961, THE ASSESSING OFFICER IMPOSED PENALT Y OF RS.8,85,730/- U/S 221(1) OF I.T. ACT. 3. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). VIDE IMPUGNED APPELLATE ORDER DATED 04.09.2017 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A) FOR SHORT] DISMISSED THE ASSESSEES APPEAL. THE RELEVANT PORTION OF THE AFORESAID IMPUG NED APPELLATE ORDER DATED 04.09.2017 OF LEARNED CIT(A) IS REPRODUCED AS UNDER : 5. I HAVE CONSIDERED THE FACTS OF THE CASE AND WRI TTEN SUBMISSIONS OF THE APPELLANT, THE RETURN OF INCOME FOR A.Y.2014-15 WAS FILED BY THE APPELLANT ON 31.03.2015, WHICH WAS RETURN U/S 139(4) OF THE ACT, DECLARING TOTAL INCOME OF RS.85,11,630/- WITH THE FOLLOWING PARTICULARS OF TA X LIABILITY. TOTAL INCOME: RS.85,11,630/- NET TAX PAYABLE: RS.26,30,094/- LESS TDS: RS.8,40,000/- BALANCE PAYABLE: RS.17,90,094/- INTEREST PAYABLE: RS.4,24,230/- TOTAL TAX & INTEREST PAYABLE: RS.22 ,14,320/- ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 3 THE SUM OF RS.22,14,320/- WAS REQUIRED TO BE PAID U /S 140A BEFORE THE FILING OF THE RETURN. HOWEVER, THE ASSESSEE FAILED TO DEPOSIT THE TAX ON THE RETURNED INCOME AS PER 140A OF THE ACT, IT HAS, THEREFORE, B EEN RIGHTLY DEEMED TO BE AN ASSESSEE IN DEFAULT U/S 140A(3) OF THE ACT. IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED BY LD.A O AS TO WHY A PENALTY U/S 221(1) BE NOT IMPOSED FOR THE ABOVE DEFAULT, THE EX PLANATION OF THE ASSESSEE IN ITS REPLY DATED 22.07.2016 WAS THAT IF HAD ALREADY PAID THE LIABILITY AS UNDER: PAID ON 23.06.2016 RS.10,00,000/- PAID ON 20.07.2016 RS.6,00,000/- PAID ON 21.07.2016 RS.6,14,320/- UPON THE CONSIDERATION OF THE MATTER, ITS HELD THAT THE ABOVE SUMS DEPOSITS MORE THAN ONE YEAR AFTER THE FILING OF THE RETURN OF INC OME DID ABSOLVE THE ASSESSEE OF THE DEFAULT COMMITTED U/S 140A(3). DURING APPEAL, THE APPELLANT CONTENDED THAT AS THE SAID RETURN OF INCOME FOR A.Y.2014-15 WAS TREATED AN INVALID U/S 139(9) OF TH E ACT BY THE CPC VIDE COMMUNICATION DATED 30.3.2016, IT WAS A NON-EST RET URN. CONSEQUENTLY, THERE WAS NO ORDER U/S 143(1) OF THE ACT AND ALSO NO VALI D DEMAND NOTICE U/S 156 OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR. IT WAS AR GUED THAT IN THE ABSENCE OF A NOTICE OF DEMAND U/S 156 OF THE ACT, THE PENALTY IM POSITION U/S 221(1) WAS NOT SUSTAINABLE. I HAVE CONSIDERED THE ABOVE CONTENTION AND FIND THAT IT IS NOT TENABLE. THE IMPUGNED ORDER U/S 221(1) IS FOR LEVY OF PENALTY U/S 221(1) OF THE ACT AND NOT FOR PROCESSING U/S 143(1) OF THE ACT. L EVY OF PENALTY UNDER SECTION 221(1) IS INDEPENDENT OF PROCESSING UNDER SECTION 1 43(1) OF THE ACT. THE PENALTY HAS BEEN RIGHTLY LEVIED U/S 221(1) FOR DEFAULT U/S 140A(3) OF THE ACT. FURTHER PLEA OF THE ASSESSEE IS THAT THE PENALTY HA S BEEN WRONGLY LEVIED ON THE SUM OF RS.22,14,320/- WITHOUT GIVING CREDIT FOR RS. 22,14,320/- PAID AFTER THE FILING OF THE RETURN OF INCOME BUT BEFORE THE PASSI NG OF THE IMPUGNED PENALTY ORDER U/S 221(1) OF THE ACT ON 28.07.2016. THE ACT ON 28.07.2016. THE PLEA IS ALSO NOT TENABLE AND CANNOT BE ACCEPTED. THE DEFAUL T IS TO BE DETERMINED AS ON THE DATE OF FILING OF RETURN OF INCOME AND ON THE A MOUNT OF SELF-ASST TAX U/S 140A NOT PAID BEFORE FILING THE RETURN OF INCOME. THE PE NALTY HAS BEEN RIGHTLY COMPUTED ON THE SUM OF RS.22,14,320/-. AS EXPLICITL Y PROVIDED IN EXPLANATION 2 SECTION 221(1), AN ASSESSEE SHALL NOT CEASE TO BE L IABLE TO PENALTY UNDER THIS SECTION MERELY BY REASON OF THE FACT THAT BEFORE TH E LEVY OF SUCH PENALTY HE HAS PAID THE TAX. A STILL ANOTHER PLEA TAKEN DURING APPEAL IS THAT TH E PENALTY HAS BEEN UNJUSTLY LEVIED WITHOUT TAKING COGNIZANCE OF THE APPELLANTS REQUEST TO LD. AO THAT THE UNPAID TAX U/S 140A MAY BE ADJUSTED OUT OF THE REFU ND DUE TO A SISTER CONCERN, KAPSON INDUSTRIES LTD, IN A.Y. 2013-14, WHICH REFUN D WAS MORE THEN THE TAX DUE U/S 140A AND FOR WHICH A NO- OBJECTION WAS ALSO FIL ED FROM THE SISTER CONCERN. THE PLEA DOES NOT HELD THE APPELLANT. ALL REFUNDS I SSUED BY THE DEPARTMENT ARE A/C PAYEE AND GO DIRECTLY TO THE BANK A/C FURNISHED BY AN ASSESSEE IN ITS RETURN OF INCOME AND THERE IS NO PROVISION TO ADJUST REFUN D OF ONE PAN AGAINST THE ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 4 DEMAND IN THE CASE OF ANY OTHER PAN. REFUND ADJUSTM ENT IS POSSIBLE ONLY AGAINST THE DEMAND OUTSTANDING IN THE CASE OF THE A SSESSEE ITSELF. THE ONLY COURSE OPEN FOR THE APPELLANT WAS TO WITHDRAW THE R EFUND MONEY FROM THE BANK A/C OF THE SISTER CONCERN AND DEPOSIT IT AGAINST TH E LIABILITY PAYABLE IN ITS OWN CASE. DURING THE YEAR, THE APPELLANT HAS RECEIVED R ENTAL INCOME RS.84,00,000/- ON WHICH TDS WAS MADE @ 10% AND ALSO HAD OTHER INCO ME. THE ARGUMENT OF PAUCITY OF FUNDS THUS DOES NOT HOLD GOOD. THE ASSES SEE HAS NOT BEEN ABLE TO PROVE THAT THE DEFAULT WAS FOR GOOD AND SUFFICIENT REASON SO AS TO FALL WITHIN THE PROVISO TO SECTION 221(1) OF THE ACT. HENCE, THE PE NALTY LEVIED UNDER SECTION 221(1) IS UPHELD. DURING APPEAL, LD. AR COULD NOT INFORM AS TO HOW TH E SUMS OF RS.22,14,320/- CLAIMED TO HAVE BEEN PAID BY THE APPELLANT AND TDS HAVE BEEN ACCOUNTED FOR TO THE CREDIT OF THE ASSESSEE IF THERE WAS NO ORDER OF PROCESSING U/S 143(1). IN CASE THE ORIGINAL RETURN U/S 139(4) HAS BEEN TREATED AS NON-EST AND NOT PROCESSED U/S 143(1) AND NO SUBSEQUENT REGULAR ASSESSMENT U/S 143 (3) HAS BEEN MADE, RETURN OF INCOME FOR A.Y.14-15 MAY BE CALLED U/S 148 OF TH E ACT AND THE TDS/AMOUNT OF RS.22,14,320/- PAID SUBSEQUENTLY ADJUSTED AGAINST T HE TAXES AND INTEREST U/S 234 A,B,C ETC. OF THE REGULAR ASSESSMENT OF A VALID RETURN AS PER PROVISIONS OF SECTION 140(2) OF THE ACT FOR A.Y.14-15. GROUNDS OF APPEAL 1 TO 5 ARE DISMISSED. 4. AGGRIEVED AGAIN, THE PRESENT APPEAL HAS BEEN FIL ED BY THE ASSESSEE IN INCOME TAX APPELLATE TRIBUNAL IN THE COURSE OF APPELLATE P ROCEEDINGS IN ITAT. THE ASSESSEE AMENDED THE GROUNDS OF APPEAL WHICH ARE AS UNDER: 1. THAT THE LD. CIT(APPEALS) HAS ERRED BOTH ON FACTS AND IN LAW TO HAVE UPHOLD THE PENALTY AS LEVIED U/S 221(1) OF THE ACT IN VIEW THAT THE IMPUGNED RETURN OF INCOME AS FILED U/S 139(1) OF THE ACT ITSELF WAS DECLARED AN INVALID RETURN VIDE COMMUNICATION REF. NO. CPC-1/4/5/95/150962219 DATED 30.03.2016 AND THERE WAS NO VALID DEMAND RAISED OR OUTSTANDING PURSUANT TO PROVISIONS U/S 156 OF THE ACT, BEING NON EST RETURN, WHICH IS MANDATORY CONDITION AND THERE WAS, AS SUCH, NO VALID DEMAND OUTSTANDING FOR WHICH THE PENALTY U/S 221(1) HAS BE EN IMPOSED AND UPHELD. 2. THAT THE WORTHY CIT(A) HAVE ERRED IN LAW AND ON FACTS AND UNJUSTIFIED FOR UPHOLDING, THE PENALTY IMPOSITION U/S 221(1) READ W ITH SECTION 140(A)(3) OF THE ACT IN VIEW OF THE AMENDED PROVISIONS OF SECTION 140(A)(3) W.E.F. 1.4.1989 AS AFTER THE SAID AMENDMENT, THE SAID DEFAULT INVITE MANDATORY CHARGI NG OF INTEREST, THUS THE LEGISLATURE DID NOT ENVISAGE THAT CONSEQUENT OF THE SAID AMENDMENT, THE DEFAULT IN PAYMENT OF SELF ASSESSMENT TAX WOULD BE COVERED BY THE SCOPE OF THE SECTION 221. RELIANCE IS PLACED ON THE COORDINATE ITAT, MUMBAI, BE NCH A, JUDGMENT IN THE CASE OF HEDLEE KNOWLEDGE PRIVATE LTD. VS INCOME TAX OFFICER REPORTED AT (2018) 169 DTR 396. 3. THAT THE WORTHY CIT (A) AND ASSESSING OFFICER BOTH HAVE BEEN WRONG AND UNJUSTIFIED IN SUSTAINING/IMPOSING PENALTY U/S 221( 1) OF THE ACT, AND THE SAID IMPOSITION OF THE PENALTY U/S 221(1) CANNOT BE AN A UTOMATIC CONSEQUENCE OF DEFAULT FOR NON PAYMENT OF TAX AS PRAYED AND IN VIEW OF THE LEGAL CITATIONS PLACED ON RECORD, WHICH ALSO HAVE SUMMARILY BEEN IGNORED. ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 5 4. THAT THE ASSESSEE CRAVES TO ADD, MODIFY, ALT ER, DELETE ANY GROUNDS OF APPEAL DURING THE COURSE OF PENALTY PROCEEDINGS. I, N. K. SEHGAL, THE APPELLANT DO HEREBY DECLARE THA T WHAT IS STATED ABOVE IS TRUE TO THE BEST OF MY INFORMATION AND BELIEF. 4.1 FURTHER, IN THE COURSE OF APPELLATE PROCEEDING S IN ITAT, THE FOLLOWING PAPERS/DOCUMENTS WERE FILED FROM THE ASSESSEES SID E. WRITTEN SUBMISSION VIDE LETTER DATED 10.07.2019 COPY OF THE ORDER U/S 139(9) OF THE INCOME TAX ACT BY CPC CELL COPY OF THE REPLY SUBMISSIONS FOR NOTICE U/S 221(1) OF THE ACT DATED 18 TH JULY, 2016. COPY OF THE NO OBJECTION TO ADJUST THE DUE REFUND O F THE ASSOCIATE ENTITY DATED 18 TH JULY, 2016. WRITTEN SUBMISSIONS VIDE LETTER DATED 10.07.2019. 5. AT THE TIME OF HEARING BEFORE US, THE LEARNE D AUTHORIZED REPRESENTATIVE OF THE ASSESSEE PLACED RELIANCE ON THE AFORESAID WRITTEN S UBMISSIONS VIDE LETTERS DATED 22.11.2018 AND 10.07.2019. FOR THE SAKE OF REFERENC E THE RELEVANT PORTIONS OF THE AFORESAID WRITTEN SUBMISSIONS ARE REPRODUCED AS UND ER: LETTER DATED 22.11.2018. 1) SCOPE AND APPLICATION OF SECTION 140(A)(3) OF T HE ACT, POST AMENDMENT OF 1989 , THE INTENTION OF THE LEGISLATURE, AT THE TIM E OF INSERTION OF THE AMENDMENT UNDER SECTION 140 (A) (3) MAKES IT CLEAR THAT THE OLD PROVISION OF 140(A) (3) PRESCRIBING FOR LEVY OF PENALTY FOR NON- PAYMENT OF SELF ASSESSMENT TAX WAS NO LONGER FOUND NECESSARY BECAUSE THE SAID DEFAULT WOULD, AFTER THE SAID AMENDMENT, INVITE MANDATORY CHARGING OF INTERE ST. THEREFORE, OSTENSIBLY THE LEGISLATURE DID NOT ENVISAGE THAT CONSEQUENT OF THE SAID AMENDMENT, THE DEFAULT IN PAYMENT OF SELF ASSESSMENT TAX WOULD BE COVERED BY THE SCOPE OF SECTION 221(1),AFTER THE SAID AMENDMENT. AS SUCH BY THE SAID AMENDMENT IN THE PROVISION OF S ECTION 140(A)(3) W.E.F 1.4.1989, THE ASSESSEE IS TO BE TREATED AS ASSESSEE IN DEFAULT, SUBJECT TO THE OTHER PROVISION OF THE ACT, IF THE SAID DEMAND WOUL D HAVE BEEN VALIDLY RAISED FOR THE LIMITED PURPOSE TO ENABLE THE A.O TO MAKE RECOV ERY OF THE AMOUNT OF TAX AND THE INTEREST DUE THEREON AND NOT FOR LEVY OF PE NALTY ,AN ASPECT WHICH HAS BEEN DONE AWAY IN THE NEW PROVISIONS. ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 6 2) IN THIS CONNECTION AND SUBJECT MATTER, THE RELI ANCE IS PLACED ON THE RECENT JUDGEMENT OF THE ITAT MUMBAI BENCH -A OF 19TH JANUA RY 2018 IN THE CASE OF HEDLEE KNOWLEDGE PVT LTD VS INCOME TAX OFFICER, REPORTED AT (2018) 169 DTR 396 (COPY ENCLOSED ) WHEREIN IT HAS BEEN HELD AS UNDER: ON THE FACE OF IT, THE ARGUMENT OF THE REVENUE APPE ARS TO BE JUSTIFIED ,SO HOWEVER ,THE SAME DOES NOT MERIT ACCEPTANCE IF ONE EXAMINE THE ISSUE IN SLIGHT DETAIL. NOTABLY, THE PENALTY ENVISAGED U/S.140A(3) IN THE UNAMENDED PROVISION WAS ON THE STATUE ALONG WITH THE PENALTY ENVISAGED U/S .221. ONCE SECTION 140A(3) HA S BEEN AMENDED W.E.F. 1ST APRIL ,1989, THERE IS NO AMENDMENT OF 221 AND IT CONTINUE S TO REMAIN THE SAME. IF THE PIEA OF THE REVENUE IS TO BE ACCEPTED, BASED ON THE AMENDMENT T O S. 140A(3), IT WOULD MEAN THAT PRIOR TO 1ST APRIL, 1989 THE SAME DEFAULT INVITED PENAI P ROVISION UNDER TWO SECTIONS,NAMELY ,SECTION 140A(3) AS WELL AS SECTION 221(1) WHICH WO ULD APPEAR TO BE PECULIAR AND UNINTENDED. FURTHERMORE ,THE INTENTION OF THE LEGIS LATURE AT THE TIME OF INSERTION OF THE AMENDED SECTION 140A(3) MAKES IT DEAR THAT THE OLD PROVISIONS OF SECTION 140A(3)PRESCRIBING FOR LEVY OF PENALTY FOR NON-PAYM ENT OF SELF -ASSESSMENT TAX WAS NO LONGER FOUND NECESSARY BECAUSE THE SAID DEFAULT WOU LD HENCEFORTH INVITE MANDATORY CHARGING OF INTEREST .OSTENSIBLY, THE LEGISLATURE D ID NOT ENVISAGE THAT CONSEQUENT TO THE AMENDMENT, THE DEFAULT IN PAYMENT OF SELF -ASSESSME NT TAX WOULD HITHERTO TO BE COVERED BY THE SCOPE OF SECTION 221(1). THE EMPHASIS OF THE REVENUE IS TO POINT OUT THAT THE NON- PAYMENT OF SELF-ASSESSMENT TAX RENDERS THE ASSESSEE 'IN DEFAULT 'IN THE AMENDED PROVISION WHICH FURTHER PRESCRIBES THAT 'ALL THE PR OVISIONS OF THIS ACT SHALL APPLY ACCORDINGLY' AND THEREFORE ,THE DEFAULT IS HITHERTO(FROM 1ST APR IL ,1989) COVERED BY SECTION 221(1). THE CONSEQUENCE OF THE AFORESAID TWO EXPRESSIONS CONTAI NED IN SECTION 140A(3) ARE ALSO NOT OF THE TYPE SOUGHT TO BE UNDERSTOOD BY THE REVENUE, AN D RATHER THE ASSESSEE IS TO BE TREATED AS AN 'ASSESSEE IN DEFAULT' FOR THE LIMITED PURPOSE OF ENABLING THE AO TO MAKE RECOVERY OF THE AMOUNT OF TAX AND INTEREST DUE AND NOT FOR LEVY OF PENALTY, AN ASPECT WHICH HAS BEEN SPECIFICALLY DONE AWAY IN THE NEW PROVISION . THERE FORE CONSIDERED IN THE AFORESAID LIGHT, THE FACT THAT THE AMENDED SECTION 140A(3) W.E.F 1ST APRIL,1989 DOES NOT ENVISAGE ANY PENALTY FOR NON-PAYMENT OF SELF-ASSESSMENT TAX, THE AO WAS NOT JUSTIFIED IN LEVYING THE IMPUGNED PENALTY BY MAKING RECOURSE TO SECTION. 221 IN CONSONANCE WITH THE AMENDMENT CARRIED OUT IN S. 140A(3) W.E.F 1ST APRIL ,1989, TH E AO ERRED IN LEVYING THE IMPUGNED PENALTY,' 3) AND SINCE THE RETURN OF INCOME FOR THE RELEV ANT ASST YEAR 2014-15 AS FILED BY THE ASSESSEE ON 31 ST MARCH 2015 VIDE ACKNOWLEDGEMENT NO.554990203310315 WAS ITSELF DECLARED AN INVALID N ONEST RETURN BY THE COMMUNICATION REF NO.CPC 1/4/5/95/1509631219 DATED 30/3/2016 (COPY AT PAGE 10, OF THE PAPER BOOKS SUBMISSION OF 16TH MAY 2018) AND SINCE NO DEMAND WAS RAISED UNDER SECTION 156 OF THE ACT, WHI CH IS MANDATORY CONDITION OF PROVISIONS, THERE WAS NO VALID DEMAND OUTSTANDIN G FOR WHICH THE PENALTY HAS BEEN WRONGLY IMPOSED DISREGARDING THE SAID PROVISIO N AND ALSO AMENDED PROVISIONS UNDER SECTION 140 (A)(3).W.E.F 01.04.198 9 LETTER DATED 10.07.2019. 1. PURSUING THE GROUND NO 1 OF THE AMENDED GROUNDS OF APPEAL, IT IS SUBMITTED AND PRAYED THAT SINCE THE RETURN OF INCOME AS FILED BY THE ASSESSEE FIRM ON 31 ST MARCH, 2015 FOR THE RELEVANT ASSTT. YEAR 2014-15 VI DE ACKNOWLEDGEMENT NO. ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 7 554990283300315 WAS ITSELF DECLARED INVALID NON EST RETURN BY THE COMMUNICATION REFERENCE NO. CPC/1415/95/1509631219 DATED 30.03.20 16 (COPY AT PAGE 10 OF THE PAPER BOOK SUBMISSIONS OF 16 TH MAY, 2018; NO ORDER OR INTIMATION U/S 143(1) OF TH E ACT WAS EITHER PASSED OR SERVED BEING A NON EST INV ALID RETURN NOR ANY DEMAND WAS RAISED OR NOTICE U/S 156 WAS EVER ISSUED/SERVED FOR ANY TAX DEMAND IN RESPECT THEREOF, WHICH IS A MANDATORY CONDITION PRECEDENT F OR ANY TAX BECOMING DUE PAYABLE AND AS SUCH THERE WAS NO VALID DEMAND FOR WHICH THE PENALTY HAS BEEN WRONGLY IMPOSED U/S 221(1) OF THE ACT READ WITH SECTION 140 (A)(3), DISREGARDING THE SAID PROVISIONS AND ALSO AMENDED PROVISIONS U/S 140(A)(3 ) W.E.F. 01.04.1989. I) AND WHEREAS SECTION 156 SPECIFICALLY PROVIDES: 'WHEN ANY TAX, INTEREST, PENALTY, FINE OR ANY OTHER SUM IS PAYABLE IN CONSEQUENCE OF ANY ORDER PASSED UNDER THIS ACT, THE ASSESSING OFFICER SHALL SERVE UPON THE ASSESSEE NOTICE OF DEMAND IN THE PRESCRIBED FORM SPECIFYING THE SUM SO PAYABLE. PROVIDED THAT WHERE ANY SUM IS DETERMINED TO BE PAYABLE BY THE ASSESSEE OR THE DEDUCTOR OR TH E COLLECTOR UNDER SUB-SECTION (1) OF SECTION 143 SUB SECTION (1) OF SECTION 200A OR SUB SECTION (1) 2060(B), THE INTIMATION UNDER THOSE SUB SECTION SHALL BE DEEMED TO BE A NOTICE OF DEMAND FOR THE PU RPOSE OF THIS SECTION'. HOWEVER, IN VIEW OF THE FACTS STATED ABOVE NO SUCH ORDER WAS PASSED U/S 143(1) OR SUB SECTION (1) OF SECTION 200A OF THE ACT AND ADMI TTEDLY NO SUCH DEMAND NOTICE U/S 156 OF THE ACT WAS ISSUED/SERVED ON THE ASSESSE E OF ANY TAX, PENALTY, FINE OR ANY OTHER SUM PAYABLE FOR THE CITED ASSTT. YEAR 2014-15. II) THE AFORESAID ARGUMENTS & PLEA OF THE ASSESSEE THAT THERE WAS NO ORDER U/S 143(1) & NOT VALID DEMAND NOTICE U/S 156 OF THE ACT WAS NOT FOUND SUSTAINABLE IN TERMS OF OPENING PARA AT PAGE 7 OF 9 , OF THE ORDERS OF THE WORTHY CIT (APPEALS). III) AS REGARDS PROVISIONS OF SECTION 156 OF THE ACT VI S A VIS ABSENCE OF VALID DEMAND, RELIANCE IS PLACED ON THE DECISION OF THE H ON'ABLE SUPREME COURT IN THE CASE OF SRI MOHAN WAHI VS COMMISSIONER OF INCOME TAX AS REPORTED IN (2000) 248 ITR 922 (SC) AT PAGE 7 OF 8 OF THE JUDGEMENT, WHEREIN THE HON'ABLE SUPREME COURT HAVE HELD ; IN THE PRESENT CASE, THE PLEA AS TO NON-SERVICE OF DEMAND NOTICE HAVING BEEN RAISED THE HIGH COURT, IN OUR OPINION THE HIGH COURT SHOULD NO T HAVE ADOPTED TOO TECHNICAL A APPROACH BY REFUSING TO DEAL WITH THE PLEA BECAUSE IT WAS NOT RAISED IN THE MANNER IN WHICH THE HIGH COURT THOUGHT IT SHOULD HAVE BEEN RA ISED. THE PLEA WENT TO THE ROOT OF THE MATTER. THE PLEA WAS RAISED BEFORE THE DEPARTMENTAL AUTHORI TIES RIGHT FROM THE ITO TO THE TRIBUNAL AND WAS NOT GIVEN UP BEFORE THE HIGH COURT ALSO. IT WOULD NOT HAVE BEEN DIFFICULT FOR THE HIGH COURT TO ASK THE INCOME-TAX DEPARTMENT TO PRODUCE THE RECORD OF THE PROCEEDINGS AND TO SHOW IF THE DEMAND NOTICE WAS AT ALL SERVED ON THE ASSESSEE. A LITTLE MORE SENSITIVE APPROACH IS REQUIRED TO BE ADOPTED I N THE PROCESS OF DISPENSING JUSTICE WHEN IT IS FOUND THAT VALUABLE PROPERTY OF A PERSON WAS SOUGHT TO BE SOLD AWAY FOR RECOVERY OF SUCH ARREARS AS DID NOT EXIST AT ALL. 2. PURSUING THE AMENDED GROUND NO. 2 THE ASSESSEE R ESPECTFULLY SUBMITS AND PRAY THAT: ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 8 I) SCOPE AND APPLICATION OF SECTION 140(A)(3) OF THE ACT, POST AMENDMENT OF 1989, THE INTENTION OF THE LEGISLATURE, AT THE TIME OF IN SERTION OF THE AMENDMENT UNDER SECTION 140 (A) (3) MAKES IT CLEAR THAT THE OLD PRO VISION OF 140(A) (3) PRESCRIBING FOR LEVY OF PENALTY FOR NON-PAYMENT OF SELF ASSESSM ENT TAX WAS NO LONGER FOUND NECESSARY BECAUSE THE SAID DEFAULT WOULD AFTER THE SAID AMENDMENT, INVITE MANDATORY CHARGING OF INTEREST. THEREFORE, OSTENSIB LY THE LEGISLATURE DID NOT ENVISAGE THAT CONSEQUENT OF THE SAID AMENDMENT, THE DEFAULT IN PAYMENT OF SELF ASSESSMENT TAX WOULD BE COVERED BY THE SCOPE OF SEC TION 221(1), AFTER THE SAID AMENDMENT. AS SUCH BY THE SAID AMENDMENT IN THE PROVISION OF S ECTION 140(A)(3) W.E.F 1.4.1989, THE ASSESSEE IS TO BE TREATED AS ASSESSEE IN DEFAULT, SUBJECT TO THE OTHER PROVISION OF THE ACT, IF THE SAID DEMAND WOUL D HAVE BEEN VALIDLY RAISED FOR THE LIMITED PURPOSE TO ENABLE THE A.O TO MAKE RECOV ERY OF THE AMOUNT OF TAX AND THE INTEREST DUE THEREON AND NOT FOR LEVY OF PENALT Y U/S 221(1) READ WITH 140(A)(3) OF THE ACT, AN ASPECT WHICH HAS BEEN DONE AWAY IN THE NEW PROVISIONS. II) IN THIS CONNECTION AND SUBJECT MATTER ,THE RELIANCE IS PLACED ON THE RECENT JUDGMENT OF THE ITAT MUMBAI BENCH -A OF 19TH JANUAR Y 2018 IN THE CASE OF HEDDLE KNOWLEDGE PVT LTD VS INCOME TAX OFFICER ,REPORTED AT (2018) 169 DTR 396 (COPY ENCLOSED ) WHEREIN IT HAS BEEN HELD IN PARA ' 6' AS UNDER: HOWEVER, A CONTRARY POSITION IS TAKEN BY THE REVEN UE TO THE EFFECT THAT FOR HAVING DEFAULTED IN PAYMENT OF SELF-ASSESSMENT TAX WITHIN THE STIPULATED PERIOD, ASSESSEE QUALIFIES TO BE 'AN ASSESSEE IN DEFAULT' AS PRESCRI BED IN THE AMENDED SEC. 140A(3) OF THE ACT AND, THEREFORE, IF ONE IS TO READ THE SAME WITH SEC. 221(1) OF THE ACT, THE ACTION OF THE ASSESSING OFFICER IN IMPOSING PENALTY IS QUITE JUST IFIED. IN SUM AND SUBSTANCE, IT IS SOUGHT TO BE EMPHASISED ON THE STRENGTH OF SEC. 221(1) OF THE ACT THAT THE PENALTY IS LEVIABLE SO LONG AS THE DEFAULT IS IN THE NATURE WHICH RENDERS THE ASSESSEE AS AN 'ASSESSEE IN DEFAULT' FOR PAYMENT OF TAX. SEC. 221(1) OF THE ACT PRESCRIBES FOR PENALTY WHEN ASSESSEE IS IN DEFAULT IN MAKING THE PAYMENT OF TAX. ON THE FAC E OF IT, THE ARGUMENT OF THE REVENUE APPEARS TO BE JUSTIFIED, SO HOWEVER, THE SAME DOES NOT MERIT ACCEPTANCE IF ONE EXAMINES THE ISSUE IN SLIGHT DETAIL. NOTABLY, THE PENALTY EN VISAGED SEC. 140A (3) IN THE UNAMENDED PROVISION WAS ON THE STATUTE ALONGWITH THE PENALTY ENVISAGED U/S 221 OF THE ACT. ONCE SEC. 140A(3) OF THE ACT HAS BEEN AMENDED W.E.F. 01. 04.1989, AS WE HAVE SEEN EARLIER, THERE IS NO AMENDMENT OF SEC. 221 OF THE ACT AND IT CONTINUES TO REMAIN THE SAME. WHAT WE ARE TRYING TO EMPHASISE IS IF THE PIEA OF THE RE VENUE IS TO BE ACCEPTED, BASED ON THE AMENDMENT TO SEC. 140A(3) OF THE ACT, IT WOULD MEAN THAT PRIOR TO 01.04.1989 THE SAME DEFAULT INVITED PENAI PROVISIONS UNDER TWO SECTIONS , NAMELY, SEC. 140A(3) AS WELL AS SEC. 221(1) OF THE ACT, WHICH WOULD APPEAR TO BE PECULIA R AND UNINTENDED. FURTHERMORE, THE INTENTION OF THE LEGISLATURE AT THE TIME OF INSERTI ON OF THE AMENDED SEC. 140A(3) MAKES IT DEAR THAT THE OLD PROVISIONS OF SEC. 140A(3) PRESCR IBING FOR LEVY OF PENALTY FOR NON- PAYMENT OF SELF-ASSESSMENT TAX WAS NO LONGER FOUND NECESSARY BECAUSE THE SAID DEFAULT WOULD HENCEFORTH INVITE MANDATORY CHARGING OF INTEREST. OSTENSIBLY, THE LEGISLATURE DID NOT ENVISAGE THAT CONSEQUENT TO THE AMENDMENT, THE DEFAULT IN PAYMENT OF SELF ASSESSMENT TAX WOULD HITHERTO BE COVERED BY TH E SCOPE OF SEC. 221(1) OF THE ACT. THE EMPHASIS OF THE REVENUE IS TO POINT OUT THAT THE NO NPAYMENT OF SELF-ASSESSMENT TAX RENDERS THE ASSESSEE 'IR DEFAULT' IN THE AMENDED PR OVISION WHICH FURTHER PRES RIBES THAT 'ALL THE PROVISIONS C THIS ACT SHALL APPLY ACCORDIN GLY' AND, THEREFORE, THE DEFAULT IS HITHERTO (FROM ( 04.1989) COVERED BY SEC. 221(1) OF THE ACT. ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 9 IN OUR VIEW, THE CONSEQUENCE OF THE AFORESAID TWO E XPRESSIONS CONTAINED IN SEC. 140A(3) ARE ALSO NOT OF THE TYPE SOUGHT TO BE UNDERSTOOD BY THE REVENUE, AND RATHER THE ASSESSEE IS TO BE TREATED AS AN 'ASSESSEE IN DEFAULT' FOR TH E LIMITED PURPOSE OF ENABLING THE ASSESSING OFFICER TO MAKE RECOVERY OF THE AMOUNT OF TAX AND INTEREST DUE AND NOT FOR LEVY OF PENALTY, AN ASPECT WHICH HAS BEEN SPECIFICALLY D ONE AWAY IN THE NEW PROVISION. THEREFORE, CONSIDERED IN THE AFORESAID LIGHT, IN OU R VI W, THE FACT THAT THE AMENDED SEC. 140A(3) W.E.F. 01.04.1989 DOES NOT ENVISAGE ANY PEN ALTY FOR NON-PAYMENT OF SELF- ASSESSMENT TAX, THE ASSESSING OFFICER WAS NOT JUSTI FIED IN LEVYING THE IMPUGNED PENALTY BY MAKING RECOU SE TO SEC. 221(1) OF THE * ACT. BEFORE PARTING, WE MAY AGAIN EMPHASISE THAT SEC. 221 OF THE ACT REMAINS UNCHANGED, BOTH DU RING THE PRE AND POST AMENDED SEC. 140A(3) OF THE ACT AND EVEN IN THE PRE-AMENDED SITU ATION, PENALTY U/S 221 OF THE ACT WAS NOT ATTRACTED FOR DEFAULT IN PAYMENT OF SELF-AS SESSMENT TAX , WHICH WAS EXPRESSLY COVERED IN PRE 01.04.1989 PREVAILING SEC. 140A(3). THUS, WITHOUT THERE BEING ANY REQUISITE CORRESPONDING AMENDMENT TO SEC. 221 OF TH E ACT IN CONSONANCE WITH THE AMENDMENTS CARRIED OUT IN SEC. 140A(3) OF THE ACT W .E.F. 01.04.1989, THE ASSESSING OFFICER ERRED IN LEVYING THE IMPUGNED PENALTY. THUS , ON THIS ASPECT, WE HEREBY SET- ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICE R TO DELETE THE PENALTY IMPOSED U/S 140A(3) R.W.S. 221(1) OF THE ACT. NOW, THEREFORE, IN VIEW OF THE AFORESAID FACTS, AND IN LAW AS PER RELEVANT PROVISIONS AND LEGAL CITATIONS AS RELIED UPON, THE ASSESSEE RESPECTFULLY REQUEST AND PRAY FOR DUE GRANT OF RELIEF AS PRAYED. 6. AT THE TIME OF HEARING BEFORE US, THE LEARNED AUTHORI ZED REPRESENTATIVE OF THE ASSESSEE DREW OUR PARTICULAR ATTENTION TO ORDER OF CO-ORDINATE BENCH OF ITAT, MUMBAI IN THE CASE OF HEDDLE KNOWLEDGE PVT. LTD. VS. INCOME TAX OFFICER [ 2018] 169 DTR 396 (MUM) AND CONTENDED THAT THE ISSUE IN DISPUTE IS SQUAREL Y COVERED IN FAVOR OF THE ASSESSEE BY THIS DECISION. 7. ON THE OTHER SIDE, THE LEARNED DEPARTMENTAL REPR ESENTATIVE RELIED UPON THE ORDERS OF THE LEARNED CIT(A) AND THE ASSESSING OFFI CER DATED 04.09.2017 & 28.07.2016. HOWEVER, HE DID NOT DISPUTE THE CONTENT ION OF LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, THAT ISSUE IN DISPU TE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY AFORESAID ORDER IN THE CASE OF HEDDLE KNOWLEDGE PVT. LTD. VS.ITO (SUPRA). 8. WE HAVE HEARD BOTH SIDES AND PERUSED THE MA TERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE IN DISPUTE IN THE PRESENT APPEAL BEF ORE US IS SQUARELY COVERED BY THE AFORESAID ORDER OF CO-ORDINATE BENCH OF ITAT, MUMAB I IN THE CASE OF HEDDLE ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 10 KNOWLEDGE PVT. LTD. VS. ITO (SUPRA). THE RELEVANT PORTION OF THE ORDER IN THE SAID CASE IS REPRODUCED AS UNDER: ...NOTABLY, THE PENALTY ENVISAGED SEC. 140A (3) I N THE UNAMENDED PROVISION WAS ON THE STATUTE AIONGWITH THE PENALTY ENVISAGED U/S 221 OF THE ACT. ONCE SEC. 140A(3) OF THE ACT HAS BEEN AMENDED W.E.F. 01.04.1989, AS WE HAVE SEEN EARLIER, THERE IS NO AMENDMENT OF SEC. 221 OF THE ACT AND IT CONTINUES T O REMAIN THE SAME. WHAT WE ARE TRYING TO EMPHASISE IS IF THE PIEA OF THE REVENUE I S TO BE ACCEPTED, BASED ON THE AMENDMENT TO SEC. 140A(3) OF THE ACT, IT WOULD MEAN THAT PRIOR TO 01.04.1989 THE SAME DEFAULT INVITED PENAI PROVISIONS UNDER TWO SECTIONS , NAMELY, SEC. 140A(3) AS WELL AS SEC. 221(1) OF THE ACT, WHICH WOULD APPEAR TO BE PECULIA R AND UNINTENDED. FURTHERMORE, THE INTENTION OF THE LEGISLATURE AT THE TIME OF INSERTI ON OF THE AMENDED SEC. 140A(3) MAKES IT DEAR THAT THE OLD PROVISIONS OF SEC. 140A(3) PRESCR IBING FOR LEVY OF PENALTY FOR NON- PAYMENT OF SELF-ASSESSMENT TAX WAS NO LONGER FOUND NECESSARY BECAUSE THE SAID DEFAULT WOULD HENCEFORTH INVITE MANDATORY CHARGING OF INTEREST. OSTENSIBLY, THE LEGISLATURE DID NOT ENVISAGE THAT CONSEQUENT TO THE AMENDMENT, THE DEFAULT IN PAYMENT OF SELF ASSESSMENT TAX WOULD HITHERTO BE COVERED BY TH E SCOPE OF SEC. 221(1) OF THE ACT. THE EMPHASIS OF THE REVENUE IS TO POINT OUT THAT THE NO NPAYMENT OF SELF-ASSESSMENT TAX RENDERS THE ASSESSEE 'IR DEFAULT' IN THE AMENDED PR OVISION WHICH FURTHER PRES RIBES THAT 'ALL THE PROVISIONS C THIS ACT SHALL APPLY ACCORDIN GLY' AND, THEREFORE, THE DEFAULT IS HITHERTO (FROM ( 04.1989) COVERED BY SEC. 221(1) OF THE ACT. IN OUR VIEW, THE CONSEQUENCE OF THE AFORESAID TWO E XPRESSIONS CONTAINED IN SEC. 140A(3) ARE ALSO NOT OF THE TYPE SOUGHT TO BE UNDERSTOOD BY THE REVENUE, AND RATHER THE ASSESSEE IS TO BE TREATED AS AN 'ASSESSEE IN DEFAULT' FOR TH E LIMITED PURPOSE OF ENABLING THE ASSESSING OFFICER TO MAKE RECOVERY OF THE AMOUNT OF TAX AND INTEREST DUE AND NOT FOR LEVY OF PENALTY, AN ASPECT WHICH HAS BEEN SPECIFICALLY D ONE AWAY IN THE NEW PROVISION. THEREFORE, CONSIDERED IN THE AFORESAID LIGHT, IN OU R VI W, THE FACT THAT THE AMENDED SEC. 140A(3) W.E.F. 01.04.1989 DOES NOT ENVISAGE ANY PEN ALTY FOR NON-PAYMENT OF SELF- ASSESSMENT TAX, THE ASSESSING OFFICER WAS NOT JUSTI FIED IN LEVYING THE IMPUGNED PENALTY BY MAKING RECOU SE TO SEC. 221(1) OF THE * ACT. BEFORE PARTING, WE MAY AGAIN EMPHASISE THAT SEC. 221 OF THE ACT REMAINS UNCHANGED, BOTH DU RING THE PRE AND POST AMENDED SEC. 140A(3) OF THE ACT AND EVEN IN THE PRE-AMENDED SITU ATION, PENALTY U/S 221 OF THE ACT WAS NOT ATTRACTED FOR DEFAULT IN PAYMENT OF SELF-AS SESSMENT TAX , WHICH WAS EXPRESSLY COVERED IN PRE 01.04.1989 PREVAILING SEC. 140A(3). THUS, WITHOUT THERE BEING ANY REQUISITE CORRESPONDING AMENDMENT TO SEC. 221 OF TH E ACT IN CONSONANCE WITH THE AMENDMENTS CARRIED OUT IN SEC. 140A(3) OF THE ACT W .E.F. 01.04.1989, THE ASSESSING OFFICER ERRED IN LEVYING THE IMPUGNED PENALTY. THUS , ON THIS ASPECT, WE HEREBY SET- ASIDE THE ORDER OF CIT(A) AND DIRECT THE ASSESSING OFFICE R TO DELETE THE PENALTY IMPOSED U/S 140A(3) R.W.S. 221(1) OF THE ACT. 9. AT THE TIME OF HEARING BEFORE US, NEITHER SIDE HAS BROUGHT ANY DISTINGUISHING FACTS OR CIRCUMSTANCES OR LEGAL PROVISIONS TO OUR N OTICE TO PERSUADE AS TO TAKE A VIEW DIFFERENT FROM THE VIEW TAKEN BY CO-ORDINATE BENCH OF ITAT MUMBAI IN THE AFORESAID CASE OF HEDDLE KNOWLEDGE PVT. LTD. VS. ITO (SUPRA). THERE IS NO DISPUTE ITA N0.696/ASR/ 2017 KAPSO NS ELECTROSTAMPINGS VS. DCIT 11 BETWEEN THE TWO SIDES THAT THE ISSUE AS RAISED IN T HE PRESENT APPEAL IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY AFORESAID ORDE R IN THE CASE OF HEDDLE KNOWLEDGE PVT. LTD. VS. ITO (SUPRA) PASSED BY CO-ORDINATE BENCH OF ITAT, MUMBAI. 9.1 RESPECTFULLY FOLLOWING THE DECISION OF THE IT AT, MUMBAI BENCH, IN THE AFORESAID CASE OF HEDDLE KNOWLEDGE PVT. LTD. VS. IT O (SUPRA), WE ALSO DECIDE THE ISSUE IN DISPUTE IN THE PRESENT APPEAL IN FAVOUR OF THE ASSESSEE AND SET ASIDE THE AFORESAID ORDERS DATED 04.09.2017 & 28.07.2016 OF L EARNED CIT(A) AND THE ASSESSING OFFICER. THE AFORESAID PENALTY AMOUNTING TO RS.8,85,730/- IS HEREBY CANCELLED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSES IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7/03/2020. SD/- SD/- (N.K.CHOUDHRY) (ANADEE NATH MISSHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 17/03/2020. /PK/ PS. COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THEN CIT(APPEALS) 5. SR DR, I.T.A.T. AMRITSAR 6. GUARD FILE TRUE COPY BY ORDER