VINAY VIKRAM OBEROI, NAVI MUMBAI V. ITO 22(3)4, NAVI MUMBAI

ITA 7157/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3063 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 15-09-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Bonafide belief
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 7157/MUM/2014 (ASSESSMENT YEAR: 2012-13) SHRI VINAY VIKRAM OBEROI VS. INCOME TAX OFFICER - 22(3) - 4 22, PUNIT CHAMBERS PLOT 769-C, SECTOR 18 TURBHE, VASHI NAVI MUMBAI 400705 TOWER 6, 3 RD FLOOR VASHI RAILWAY STATION COMPLEX VASHI, NAVI MUMBAI 400703 PAN - AAAPO2816L APPELLANT RESPONDENT APPELLANT BY: NONE RESPONDENT BY: SHRI PURUSHOTTAM KUMAR DATE OF HEARING: 15.09.2016 DATE OF PRONOUNCEMENT: 21.09.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 33, MUMBAI DATED 01.09.2014 UPHOLDING THE LEVY OF P ENALTY OF ` 2,44,943/- UNDER SECTION 221(1) OF THE INCOME TAX ACT, 1961 (I N SHORT 'THE ACT') BY THE ASSESSING OFFICERS ORDER DATED 28.01.2013. 2. THIS APPEAL WAS FIXED FOR HEARING ON A NUMBER OCCAS IONS, BUT NEITHER ANYONE WAS PRESENT FOR THE ASSESSEE NOR WAS ANY ADJOURNMENT SOUGHT ON HIS BEHALF. EVEN THE NOTICE FOR HEARING I SSUED BY RPAD COULD NOT ELICIT COMPLIANCE THERETO OR A RESPONSE IN THIS REGARD. ON THE DAY THE BENCH DID NOT FUNCTION, THE CASE WAS ADJOURNED AND NOTICE OF NEXT DATE OF HEARING WAS INFORMED THROUGH NOTICE BOARD AND BY IS SUE OF NOTICE TO THE PARTIES. ON 15.09.2015, WHEN THE CASE WAS CALLED FO R HEARING, NONE WAS PRESENT FOR THE ASSESSEE, BUT THE LEARNED D.R. FOR REVENUE WAS PRESENT AND READY TO ARGUE THE CASE FOR REVENUE. IN THESE CIRCU MSTANCES, AS MENTIONED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE AS SESSEE IS NOT INTERESTED IN PURSUING THIS APPEAL SERIOUSLY AND THEREFORE PRO CEED TO DISPOSE THE ITA NO. 7157/MUM/2014 SHRI VINAY VIKRAM OBEROI 2 SAME WITH THE ASSISTANCE OF THE LEARNED D.R. FOR RE VENUE AND THE MATERIAL ON RECORD. 3.1 THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPE AL ARE AS UNDER: - 1. THE LEARNED OFFICER SHRI K. V. SREENIVAS HAS ER RED IN PASSING ORDER U/S. 221(1) OF THE INCOME TAX ACT, 1961 DATED 28.01 .2013 DESPITE THE FACT THAT THE REMARKS OF 'NONE ATTENDED' CANNOT WITHSTAND THE FACTS OF THE CASE; 2. IT IS IMPORTANT TO NOTE THE SEQUENCE OF EVENTS, WHICH ARE DESCRIBED HEREUNDER: A. THE SCRUTINY FOR ASST. YEAR 2010-2011 WAS CARRIE D OUT BETWEEN SEPTEMBER 2012 TO DECEMBER' 2012 BEFORE THE SAME L EARNED OFFICER, SHRI K. V. SREENIVAS; B. THE ASSESSMENT WAS MADE U/S. 143(3) OF THE INCOM E TAX ACT, 1961 AND THE ORDER DATED 31.12.2012 WAS DELIVERED T O US ACCORDINGLY BY HAND THROUGH OUR SAME AUTHORISED CHA RTERED ACCOUNTANT, WHO HAD BEEN THERE SINCE PAST SEVERAL Y EARS; C. THE LEARNED OFFICER WAS ORALLY REQUESTED THAT SO ME FEW DAYS BE GRANTED TO MAKE THE PAYMENT OF RS. 11,530/- SO DEMA NDED FOR THE AY 2010-2011 AS THE UNDERSIGNED ASSESSEE WAS PA SSING THROUGH A BAD FINANCIAL CRUNCH; D. THE ASSESSMENT ORDER FOR AY 2010-2011 DISCLOSED A DEMAND OF RS. 11,530/-, WHICH WAS PAID ON 17 TH JANUARY 2013. THE SAID CHALLAN WAS ALSO PRODUCED BEFORE THE SAME LEARNED O FFICER ON 18 TH JANUARY 2013 SO THAT HE CAN UPDATE HIS RECORDS AT HIS END; E. A REQUEST TO PROVIDE SOME TIME WAS ALSO DISCUSSE D DURING OUR VARIOUS MEETINGS PERTAINING TO OUTSTANDING TAX PAYM ENT OF RS. 244,943 RELEVANT TO ASST. YEAR 2012- 2013; F. WE HAD REQUESTED THE OFFICER ON THE BASIS OF THE FACT THAT ALTHOUGH THE BANK HAD SET UP A CASH CREDIT LIMIT FO R US, HOWEVER THE DRAWING POWERS WERE CURTAILED TO LESS THAN THE ORIGINAL LIMIT LEADING TO A FINANCIAL CRUNCH; G. THE SAME LEARNED OFFICER IN HIS ORDER DATED 28.0 1.2013 FOR THE ASST. YEAR 2012-2013 LEVIED A PENALTY OF RS. 244,94 3/- U/S. 221(1) OF THE INCOME TAX ACT, 1961 ON THE GROUND TH AT WE NEVER ATTENDED BEFORE HIM; H. THE CIT APPEALS XXXIII HAS, IN THEIR ORDER DAT ED 01.09.2014 DISAGREED WITH US AND CLAIMED THAT SCRUTINY PROCEED INGS ARE DIFFERENT FROM THE PENALTY PROCEEDING U/S. 221(1); I. WHEN THE ASSESSEE, ASSESSING OFFICER, AUTHORISED CHARTERED ACCOUNTANT ALL WERE SAME FOR BOTH THE YEARS IN QUES TION, IT WOULD BE UNREASONABLE TO BELIEVE THAT BOTH THE CASES WOUL D NOT BE DISCUSSED AT THE SAME MEETING ESPECIALLY WHEN THE D ATES ITA NO. 7157/MUM/2014 SHRI VINAY VIKRAM OBEROI 3 COINCIDED WITH EACH OTHER SO FREQUENTLY SO OFTEN; ] J. PROBABLY THE HON'BLE CIT-APPEALS 33 WANTED US TO HAVE 2 DIFFERENT MEETINGS ON THE SAME DAY FOR BOTH DIFFERE NT ASSESSMENT YEARS TO PROVE THE VERACITY OF OUR CASE; K. IT IS HEREBY HONESTLY DISCLOSED THAT WE HAD MET THE SAME LEARNED OFFICER SEVERAL TIMES AND IT WOULD BE VERY UNREASONABLE TO THINK THAT SINCE THE SCRUTINY CASE (ASST. YEAR 2 010-2011) WAS BEING DISCUSSED AND DISPOSED, NO TALKS WERE EVER CA RRIED OUT FOR THE ASST. YEAR 2012-2013 ALTHOUGH ALL THE DATES COI NCIDED WITH THE DATES MENTIONED BY THE LEARNED OFFICER WHEN THE ORDER U/S. 221(1) WAS PASSED BY HIM. 3. ONE OF THE OTHER REASONS FOR THE NON-PAYMENT OF TAXES WAS THAT WE WERE EXPECTING A REFUND, WHICH HOWEVER COULD NOT BE REALIZED SINCE THE CLAIM WAS DISPUTED BY THE DEPARTMENT AND THE SA ME IS PENDING BEFORE THE CIT APPEALS-10 AT EARNEST HOUSE, NARIMAN POINT. THE STATUS OF REFUNCI . DUES FOR THE RELEVANT YEARS HAVE BEEN DISCLOSED AS UNDER: 4 . AS CAN BE SEEN FROM THE ABOVE, THAT THE TOTAL REFU ND EXPECTED TO BE RELEASED FROM THE DEPARTMENT OF INCOME TAX WAS APPROXIMATELY TO THE TUNE OF RS. 390,000/-. SINCE THE TOTAL LIABILITY FO R THE FIN YEAR 2011-2012 STOOD AT RS. 244,943/- WE WERE EXPECTING THE REFUND TO GET CREDITED. THE REFUND WAS BADLY AWAITED TO CURTA IL OUR FINANCIAL CRUNCH, HOWEVER UNFORTUNATELY IT DINT GO THE WAY WE PLANNED; 5. SINCE THE REFUNDS WERE ALREADY EXPECTED; AND SINCE THIS WAS THE FIRST YEAR OF PAYMENT OF SELF-ASSESSMENT TAX (P REVIOUS YEARS BEING THE CASES FOR REFUND) , THE DELAY IN PAYMENT OF TAXES SHOULD BE CONDONED; 6. MOREOVER, THE DEPARTMENT HAD RIGHTLY EXEMPTED TRANS PORTERS FROM DEDUCTION OF TDS AND HENCE ACCUMULATION OF FUNDS TO MAKE THE PAYMENT OF TAXES (THIS BEING THE FIRST YEAR OF PAYM ENT OF SELF- ASSESSMENT TAX) BECAME UNEXPECTEDLY DIFFICULT; 7. WE SEEK THE RELIEF ON THE GROUND THAT IN ONE THE CA SES APPEALED BEFORE THE TRIBUNAL, THE LATTER HAD RIGHTLY STATED THAT 'PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITH ER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF IT S OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PE RFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORI TY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHOR ITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE P ROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF TH AT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE S TATUTE.' ITA NO. 7157/MUM/2014 SHRI VINAY VIKRAM OBEROI 4 8. THE ORDER OF THE CIT APPEAL WAS DELIVERED TO US ON 30.09.2014, HENCE THIS APPEAL IS FILED WITHIN THE TIME LIMITS S ET FORTH. WE REQUEST YOUR EXCELLENCY TO ALLOW OUR APPEAL ON T HE GROUNDS STATED HEREINABOVE. ALL EARLIER CASES WERE REFUND CASES, A ND HENCE THIS BEING THE FIRST YEAR FOR PAYMENT OF SELF ASSESSMENT TAX, YOUR HON'BLE EXCELLENCY IS REQUESTED TO TAKE A LENIENT VIEW AND ALLOW OUR APPEAL, FOR WHICH THE UNDERSIGNED SHALL REMAIN OBLIGED AND ALWA YS PRAY. 3.2 THOUGH THE ASSESSEE HAS RAISED EIGHT GROUNDS IN THIS APPEAL, HOWEVER THE SOLE ISSUE ON WHICH THE APPEAL IS PREFE RRED IS IN RESPECT OF THE LEVY OF PENALTY UNDER SECTION 221(1) OF THE ACT FOR A.Y. 2012-13. 4. THE LEARNED D.R. WAS HEARD AND HE PLACES STRONG REL IANCE ON THE ORDERS OF THE AUTHORITIES BELOW IN LEVYING AND CONF IRMING THE LEVY OF PENALTY UNDER SECTION 221(1) OF THE ACT. ACCORDING TO THE L EARNED D.R., THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS PUT FORTH BY THE ASSESSEE VIDE LETTER DATED 23.02.2013 (RECORDED AT PARA 2.3 OF TH E IMPUGNED ORDER) AND THE ORDER OF THE ASSESSING OFFICER (AO) LEVYING THE SAID PENALTY OF ` 2,44,943/- UNDER SECTION 221(1) OF THE ACT, OBSERVE D THAT THE UNCONTROVERTED FACT IN THE CASE ON HAND WAS THAT TH E ASSESSEE DID NOT PAY DUE TAXES BEFORE FILING THE RETURN OF INCOME OF A.Y . 2012-13, WHEREIN ADMITTEDLY THE TAX LIABILITY WAS DETERMINED AT ` 2,44,943/-. IT IS SUBMITTED THAT THE LEARNED CIT(A) WAS OF THE VIEW THAT IN THE ASSESSEES SUBMISSIONS, THE ASSESSEE HAS FAILED TO DEMONSTRATE OR EXPLAIN T HAT THE CIRCUMSTANCES THAT LED TO THIS DEFAULT WAS BEYOND HIS CONTROL OR DUE TO POOR FINANCIAL POSITION, ETC. OR AS TO WHY THE ASSESSEE HAD PAID T HE SELF ASSESSMENT TAX DUE UNDER SECTION 140A(3) OF THE ACT ONLY AFTER PAS SING OF THE PENALTY ORDER LEVYING PENALTY UNDER SECTION 221(1) OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE LEARNED CIT(A) HAD ALSO OBSERVED THAT THE AO HAD LEVIED THE SAID PENALTY FOR GOOD AND SUFFICIENT REASONS AND AFTER A FFORDING THE ASSESSEE OPPORTUNITY OF BEING HEARD WHICH COULD NOT BE CONTR OVERTED BY THE ASSESSEE AND IN THIS VIEW OF THE MATTER, UPHELD THE LEVY OF PENALTY UNDER SECTION 221(1) OF THE ACT. IT IS CONTENDED BY THE L EARNED D.R. THAT SINCE THE GROUNDS RAISED BY THE ASSESSEE (SUPRA) ARE ALL ARGU MENTS PUT FORTH BEFORE THE AUTHORITIES BELOW IN THE COURSE OF PENALTY PROC EEDINGS AND WHICH HAS BEEN CONSIDERED BY THEM WHILE PASSING OF THE ORDERS , AND NOTHING HAS ITA NO. 7157/MUM/2014 SHRI VINAY VIKRAM OBEROI 5 BEEN BROUGHT ON RECORD BY THE ASSESSEE TO CONTROVER T THE FINDINGS IN THE IMPUGNED ORDER, THE ASSESSEES APPEAL IS LIABLE TO BE DISMISSED. 5.1 WE HAVE HEARD THE LEARNED D.R. FOR REVENUE AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. THOUGH SEVERAL GROUNDS HAVE BEEN RAISED BY THE ASSESSEE IN THIS APPEAL (SUPRA) THE ONLY ISSUE ON WHICH THIS APPEAL HAS BEEN PREFERRED IS FOR CONSIDERATION AND ADJUDICATION IN RESPECT OF THE PENALTY OF ` 2,44,943/- LEVIED UNDER SECTION 221(1) OF THE ACT FOR A.Y. 2012-13. THE SUBMISSIONS OF THE ASSESSEE O N THIS ISSUE AND THE FINDING OF THE LEARNED CIT(A) AT PARA 2 TO 2.8 OF T HE IMPUGNED ORDER, AFTER CONSIDERATION THEREOF, IS AS UNDER: - 2. THE APPELLANT HAS TAKEN AS MUCH AS FIVE GROUNDS OF APPEAL, HOWEVER THE CRUX OF THE ISSUE REVOLVES AROUND LEVY OF PENALTY U/S. 221(1) OF THE ACT. 2.1 IN THIS CASE THE RETURN OF INCOME WAS FILED ON 29.09.2012 FOR THE YEAR UNDER CONSIDERATION. THE A.O ON PERUSAL FROM T HE ITD SYSTEM NOTICED THAT THE APPELLANT DID NOT PAY THE SELF ASS ESSMENT TAX AMOUNTING TO RS.2,44,943/- AS CLAIMED IN THE RETURN OF INCOME FILED. THE A.O SUBSEQUENTLY REQUESTED THE APPELLANT TO FUR NISH THE PROOF OF PAYMENT OF SELF ASSESSMENT TAX AND ALSO ISSUED A SH OW CAUSE NOTICE AS TO WHY PENALTY U/S. 221(1) OF THE I.T. ACT, 1961 SHOULD NOT BE IMPOSED ON THE APPELLANT FOR THE DEFAULT IN NOT MAK ING THE PAYMENT OF SELF ASSESSMENT TAX. SINCE THERE WAS NO RESPONSE TO THE SAID SHOW CAUSE NOTICE, THE A.O FURTHER ISSUED A SHOW CAUSE N OTICE DATED 07.01.2013 ASKING THE APPELLANT TO FURNISH THE EXPL ANATION. HOWEVER, THE SAME REMAINED UNATTENDED. CONSEQUENTLY THE A.O HAVING BEEN SATISFIED THAT THE APPELLANT HAD COMMITTED DEFAULT U/S.221(1) OF THE I.T. ACT, 1961, LEVIED THE PENALTY OF RS.2,44,943/- . 2.2 AGGRIEVED BY THE SAID ACTION OF THE A.O., THE APPEL LANT IS IN APPEAL, BEFORE ME. 2.3 IN APPEAL PROCEEDINGS, THE APPELLANT VIDE HIS LETTE R DATED 23.2.2013, HAS SUBMITTED AS UNDER: AT THE OUTSET, LET ME STATE THAT THE UNDERSIGNED R UNS A TRANSPORT AGENCY IN THE PROPRIETARY CAPACITY UNDER THE NAME AND STYLE O F M/S SPEED CARGO CARRIERS. THE SELF ASSESSMENT TAX FOR THE AST. YEAR 2012-13 TO THE TUNE OF RS.244,943/ - (RUPEES TWO LACS FORTY FOUR THOUSAND NINE HUNDRED & FORTY THREE ONLY) WAS PAYABLE BY US, HOWEVER DUE TO CIRCU MSTANCES BEYOND OUR CONTROL AND DUE TO FINANCIAL VULNERABILITY, WE ORAL LY SOUGHT TIME FOR PAYMENT OF TAXES BEFORE THE END OF FINANCIAL YEAR. IT IS TO BE NOTED THAT SCRUTINY REQUIREMENTS FOR AS ST. YEAR 2010-2011 WERE REGULARLY FULFILLED BEFORE THE LEARNED OFFICER FOR HIS SATISFACTION IN ORDER TO ITA NO. 7157/MUM/2014 SHRI VINAY VIKRAM OBEROI 6 ENSURE APPROPRIATE PASSING OF ORDER U/S 143(3) OF T HE INCOME-TAX ACT, 1961. IT IS TO BE FURTHER NOTED THAT THE SAID ORDER WAS PASS ED ON 31.12.2012 AFTER SEVERAL HEARINGS IN THE MONTH OF DECEMBER, 2012. FURTHER, THE PAYMENT OF RS. 11,530/- WAS MADE ON 17 .01.2013, WHICH WAS DETERMINED TO BE PAYABLE BY US VIDE THE SAID ASST. ORDER DATED 31.12.2012 PASSED BY THE SAME LEARNED OFFICER. THE DATE MENTIO NED BY THE LEARNED OFFICER U/S 221(1) OF THE INCOME-TAX ACT, 1961 CORR ESPONDS WITH THE PERIOD OF HEARING CARRIED OUT FOR DISPOSAL OF SCRUTINY ASSESS MENT FOR THE ASST. YEAR 2010-2011 AND HENCE HIS REMARK THAT 'NONE ATTENDED' IS MISCONCEIVED AND FAR FROM REALITY. FURTHER, THE NOTICES MENTIONED BY HIM WERE NEVER RECEIVED BY US TILL WE OBTAINED THE ORDER U/S 221(1) DATED 2 8.01.2013. DUE TO THE AFORESAID REASON, WE WOULD REQUEST YOUR EXCELLENCY TO GRANT US STAY ON THE SAID DEMAND RAISED BY THE LEARNED OFFICER U/S 156 O F THE INCOME-TAX ACT, 1961. THE AFORESAID REASONS JUSTIFY THAT WE WERE NO T AWARE THAT SUCH NOTICES AS MENTIONED IN THE LEARNED OFFICERS ORDER U/S 221( 1) WERE EVER ISSUED TO US FURTHER, WE HAD ATTENDED SEVERAL DATES DURING THE S AID PERIOD AS MENTIONED IN HIS ORDER U/S 221(1) FOR DISPOSAL OF SCRUTINY CA SE FOR ASST. YEAR 2010- 2011, AND HENCE IT IS NOT TRUE THAT WE COMMITTED DEFAULT U/ S 221(1) OF THE INCOME- TAX ACT, 1961. THE UNDERSIGNED REQUESTS YOUR GOODSELF TO GRANT STA Y TO AVOID UNDUE HARDSHIP. KINDLY CONDONE ANY DELAY (IF ANY) WHICH MAY HAVE BEEN CAUSE AT OUR END. THE UNDERSIGNED OR HIS REPRESENTATIVE SHAL L ATTEND EACH DATES AS PROVIDED BY THE HON'BLE AUTHORITY TO ENSURE QUICK D ISPOSAL OF THE CASE FILED BEFORE YOUR EXCELLENCY. 2.4 PENALTY ORDER OF THE A.O AND SUBMISSION MADE B Y THE APPELLANT HAVE BEEN CONSIDERED. UNDISPUTED FACT OF THE CASE I S THAT THE ASSESSEE DID NOT PAY DUE TAXES BEFORE FILING OF RET URN WHEREIN ADMITTED TAX LIABILITY WAS DETERMINED AT RS.2,44,94 3/-. THE APPELLANT CONTENDED THAT DUE TO CIRCUMSTANCES BEYOND HIS CONT ROL AND DUE TO FINANCIAL CRUNCH HE COULD NOT PAY SELF ASSESSMENT T AX WHILE FILING RETURN OF INCOME. HOWEVER, ON PERUSAL OF SUBMISSION MADE BEFORE ME, I AM OF THE OPINION THAT INSTEAD OF DEMONSTRATI NG OR EXPLAINING THE SITUATIONS OR POOR FINANCIAL POSITION WHICH PRE VENTED HIM TO PAY TAXES, HE WENT ON ALLEGING THAT THOUGH HIS LD. A.R. WAS ATTENDING VARIOUS HEARINGS WITH THE SAME A.O. FOR SCRUTINY PROCEEDINGS IN APPELLANT'S OWN CASE FOR A.Y. 2010-11, THE A.O. HAS WRONGLY NOTED IN HIS ORDER THAT NO ONE ATTENDED IN PENALTY PROCEEDIN GS. IN MY VIEW, THE APPELLANT HAS FAILED TO APPRECIATE THE FACT THA T SCRUTINY PROCEEDINGS AND PENALTY PROCEEDINGS ARE TWO SEPARAT E AND INDEPENDENT PROCEEDINGS AND, THUS, THE ATTENDANCE I N SCRUTINY PROCEEDINGS CANNOT BE CONSTRUED AS ATTENDANCE IN RE SPONSE TO NOTICES ISSUED IN PENALTY PROCEEDINGS AND THAT TOO FOR DIFFERENT ASSESSMENT YEARS. THE APPELLANT FURTHER CONTENDED T HAT TIME FOR PAYMENT OF TAXES WAS ORALLY SOUGHT. FROM THE STATEM ENT OF THE APPELLANT, IT APPEARS THAT THE FACT OF NON-PAYMENT OF SELF ASSESSMENT TAX WAS APPRISED OF TO THE APPELLANT BY THE A.O. IT IS ALSO APT TO NOTE THAT, ON COMPLETION OF SCRUTINY ASSESSMENT FOR A.Y. 2010-11 ON 31.12.2012, DEMAND RAISED WAS ENTIRELY PAID ON 17.1 .2013 WHEREAS S.A. TAX FOR YEAR UNDER CONSIDERATION WAS PAID ONLY AFTER PASSING OF PENALTY ORDER AND PRIOR TO FILING APPEAL BEFORE ME. ITA NO. 7157/MUM/2014 SHRI VINAY VIKRAM OBEROI 7 2.5 PROVISIONS OF SEC.140A(3)R.W.S.221(1)OF THE AC T ARE VERY CLEAR. SECTION 140A(3) STIPULATES THAT IF ANY ASSESSEE FAI LS TO PAY THE WHOLE OR ANY PART OF SUCH TAX OR INTEREST OR BOTH IN ACCO RDANCE WITH THE PROVISIONS OF SUB-SECTION (1), HE SHALL, BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF THE TAX OR INTEREST OR BOTH R EMAINING UNPAID, AND ALL THE PROVISIONS OF THIS ACT SHALL APPLY ACCORDIN GLY. SECTION 221(1) COMES IN TO PLAY ONCE IT IS FOUND THAT DEFAULT HAS BEEN COMMITTED BY ANY ASSESSEE IN PAYMENT OF TAX. 2.6. THE ASSESSING OFFICER HAS LEVIED THE PENALTY AFTER ISSUING SHOW- CAUSE NOTICE TO THE ASSESSEE AND THEREBY FOLLOWED T HE MANDATE OF THE ACT. THE APPELLANT ALLEGED THAT THE SAID NOTICES WE RE NEVER ISSUED BY HIM. ON PERUSAL OF THE RECORD WITH THE A.O. IT IS O BSERVED THAT THE NOTICES WERE SENT ON THE ADDRESS OF ASSESSEE WHICH WAS AVAILABLE IN PAN DATABASE. EVEN WHEN THE OPPORTUNITIES WERE GRAN TED AND AVAILED OF IN APPELLATE PROCEEDINGS, THE APPELLANT FAILED T O BUTTRESS HIS CLAIM WITH DOCUMENTARY EVIDENCE LIKE BANK PASS BOOK OR CA SH BOOK TO SHOW THAT HE WAS SUFFERING WITH FINANCIAL CRUNCH. 2.7 AS PER THE PROVISIONS OF THE SECTION 221(1), P ENALTY IS NOT TO BE LEVIED IF ASSESSEE PROVES, TO THE SATISFACTION OF T HE AO, THAT THE DEFAULT WAS FOR GOOD AND SUFFICIENT REASONS. SECOND CONDITI ON FOR LEVYING PENALTY IS THAT BEFORE LEVYING ANY SUCH PENALTY THE ASSESSEE HAS TO BE GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. AS F AR AS FIRST CONDITION IS CONCERNED, ONUS IS ON THE ASSESSEE TO PROVE THE EXISTENCE OF GOOD AND SUFFICIENT REASON. THE APPELLANT HAS NOT BROUGHT EV EN AN IOTA OF EVIDENCE ON RECORD TO INDICATE WHY HE COULD NOT PAY TAXES AS PER PROVISIONS OF THE ACT. ON THE OTHER HAND, AO HAS TO ESTABLISH THAT HE AFFORDED A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. IN THE CASE BEFORE ME, IT IS FOUND THAT THE AO HAD LEVIED THE P ENALTY AFTER ISSUING SHOW CAUSE NOTICE TO THE ASSESSEE. THUS, AS FAR AS AO IS CONCERNED, HE HAS FOLLOWED THE MANDATE OF THE ACT. IN MY OPINION, THE APPELLANT HAS NOT DISCHARGED HIS ONUS AS HE FAILED TO PRODUCE ANY GOOD OR SUFFICIENT REASON AS TO WHY HE COULD NOT PAY TAXES AS PER PROV ISIONS OF THE ACT. HENCE ADVANCEMENT OF STATEMENT THAT DUE TO FINANCIA L CRISIS HE COULD NOT PAY TAXES, THAT TOO WITHOUT ANY DOCUMENTARY EVI DENCE IN A MERE STATEMENT WHICH CANNOT BE ENTERTAINED. 2.8 HENCE, I DO NOT FIND ANY INFIRMITY IN THE ACTIO N OF THE A.O. IN LEVYING PENALTY U/S. 221(1) OF THE ACT. 5.2 ON A PERUSAL OF THE FINDING RENDERED IN THE ORD ER OF THE LEARNED CIT(A) (SUPRA), WE FIND THAT THE LEARNED CIT(A) HAS JUDICI OUSLY CONSIDERED THE ISSUE, THE AOS VIEW AND ASSESSEES SUBMISSIONS BEFORE UPH OLDING THE LEVY OF THE SAID PENALTY OF ` 2,44,943/- UNDER SECTION 221(1) OF THE ACT. ADMITTE DLY, THE UNDISPUTED FACT, IN THE CASE ON HAND, IS THAT THE A SSESSEE DID NOT PAY DUE TAXED BEFORE FILING OF THE RETURN OF INCOME FOR A.Y . 2012-13; WHEREIN THE TAX LIABILITY TO BE PAID UNDER SECTION 140A(3) OF THE A CT WAS DETERMINED BY THE ITA NO. 7157/MUM/2014 SHRI VINAY VIKRAM OBEROI 8 ASSESSEE HIMSELF AT ` 2,44,943/-. IN THE LIGHT OF THE SUBMISSIONS OF THE ASSESSEE PUT FORTH BEFORE THE AUTHORITIES BELOW AND THE FACTS ON RECORD, WE CONCUR WITH THE VIEW OF THE LEARNED CIT(A) THAT THE ASSESSEE HAS FAILED TO ESTABLISH WITH ANY MATERIAL EVIDENCE THAT IT WAS DU E TO CIRCUMSTANCES BEYOND HIS CONTROL AND DUE TO FINANCIAL CRUNCH THAT HE WAS PREVENTED FROM PAYING THE DETERMINED/ADMITTED TAX LIABILITY OF ` 2,44,943/-. WE ALSO FIND THAT, AS OBSERVED BY THE LEARNED CIT(A), THE AO HAD LEVIED THE SAID PENALTY ONLY AFTER ISSUE OF SHOW CAUSE NOTICE, AFFORDING TH E ASSESSEE OPPORTUNITY OF BEING HEARD IN THE MATTER; WHICH IS IN ACCORDANCE W ITH THE PROCEDURE LAID DOWN IN THE ACT. IN OUR VIEW, ON AN APPRECIATION OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE ASSESSEE, EXCEP T FOR PUTTING FORTH CLAIMS, HAS FAILED TO DISCHARGE THE ONUS UPON HIM TO PROVE THE EXISTENCE OF GOOD AND SUFFICIENT REASONS THAT PREVENTED HIM FROM PAYI NG THE SAID TAXES OF ` 2,44,934/- AS PER THE PROVISIONS OF THE ACT. IN THE FACTUAL AND LEGAL MATRIX OF THE CASE, AS DISCUSSED ABOVE, WHEREIN THE ASSESS EE HAS FAILED TO BRING ON RECORD MATERIAL EVIDENCES TO CONTROVERT THE FINDING S OF THE AUTHORITIES BELOW IN RESPECT OF THE LEVY OF PENALTY OF ` 2,44,943/- UNDER SECTION 221(1) OF THE ACT, WE UPHOLD THE ORDERS OF THE AUTHORITIES BELOW IN LEVYING THE SAID PENALTY. CONSEQUENTLY, THE ASSESSEES GROUNDS OF AP PEAL ARE DISMISSED. 5. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2012- 13 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST SEPTEMBER, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 21 ST SEPTEMBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -33, MUMBAI 4. THE CIT - 22, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.