LOK HOUSING AND CONSTRUCTIONS LTD, MUMBAI v. ADDL CIT RG 8(2), MUMBAI

ITA 5224/MUM/2009 | 2007-2008
Pronouncement Date: 11-03-2011 | Result: Allowed

Appeal Details

RSA Number 522419914 RSA 2009
Assessee PAN AAACL1881B
Bench Mumbai
Appeal Number ITA 5224/MUM/2009
Duration Of Justice 1 year(s) 6 month(s)
Appellant LOK HOUSING AND CONSTRUCTIONS LTD, MUMBAI
Respondent ADDL CIT RG 8(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 11-03-2011
Assessment Year 2007-2008
Appeal Filed On 11-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: MUMBAI BEFORE SHRI R.S. SYAL ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO.5224 AND 5225/MUM/2009 (ASSESSMENT YEARS: 2007-08 AND 2008-09) M/S. LOK HOUSING AND CONSTRUCTIONS LTD. LOK BHAVAN LOK BHARATI COMPLEX MAROL MAROSHI ROAD ANDHERI (E) MUMBAI -400 059 .... ASSESSEE VS ADDL. COMMISSIONER OF INCOME-TAX RANGE 8(2) AAYAKAR BHAVAN M.K. ROAD MUMBAI -400 020 .REVENUE PAN: AAACL 1881 B ASSESSEE BY: SHRI M.P. MEHWALA REVENUE BY: SHRI R.S. SRIVASTAVA O R D E R PER R.S. PADVEKAR JM BOTH THESE APPEALS ARE FILED BY THE ASSESSEE CHALLE NGING THE IMPUGNED ORDER OF THE LD. CIT (A)-8 MUMBAI DATED 11 .6.2009 FOR THE A.Y. 2007-08 AND 2008-09. BOTH THESE APPEALS ARE ARISIN G OUT OF THE PENALTY LEVIED BY THE A.O. U/S.221(1) OF THE INCOME-TAX ACT FOR THE NON-PAYMENT OF THE DUE TAX BY TREATING THE ASSESSEE IN DEFAULT. THE ASSESSEE HAS TAKEN THE IDENTICAL GROUNDS IN BOTH THE APPEALS AND THE FACTS ARE ALSO ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 2 IDENTICAL. HENCE BOTH THESE APPEALS ARE DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE A.O. LEVIED THE PENALTY U/S.221(1) OF THE I. T. ACT OF RS 2.82 CRORES FOR THE A.Y. 2007-08 AND RS 1.98 CRORES FOR THE A.Y. 2008-09. THE FACTS WHICH REVEALED FROM THE RECORD ARE AS UNDER. THE ASSESSEE- COMPANY IS ENGAGED IN THE BUSINESS OF REALITY AND C IVIL CONSTRUCTION. SO FAR AS ASSESSMENT YEAR 2007-08 IS CONCERNED THE DU E DATE OF FILING OF THE RETURN WAS 30.11.2007. THE ASSESSEE DID NOT PAY AN Y ADVANCE TAX FOR THE A.Y. 2007-08. THE SURVEY ACTION U/S.133A WAS C ONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE-COMPANY. IN THE COURSE OF THE SURVEY ACTION AUDITED ACCOUNTS OF THE COMPANY FOR THE FIN ANCIAL YEAR ENDING 31.3.2007 WERE FOUND IN WHICH THE PROFIT BEFORE THE TAX WAS SHOWN AT RS 142.45 CRORES. SO FAR AS A.Y. 2008-09 IS CONCERNED AS NOTED BY THE A.O. THE ASSESSEE DID NOT PAY ANY ADVANCE TAX. IT APPEA RS THAT THE STATEMENT OF THE MANAGING DIRECTOR OF THE ASSESSEE-COMPANY SH RI LALIT GANDHI WAS RECORDED U/S.131 OF THE I.T. ACT. IN THE SAID STAT EMENT HE PROMISED TO MAKE THE PAYMENT OF THE TAX DUES FOR BOTH THE ASSES SMENT YEARS WHICH ACCORDING TO THE A.O. WAS TO THE EXTENT OF RS 43 CR ORES AND RS 42 CRORES RESPECTIVELY AND ALSO TO FILE THE RETURNS OF INCOME FOR BOTH THE YEAS ON OR BEFORE 30.9.2008. THE A.O. ISSUED THE NOTICE U/S.1 42(1) REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME. THE ASSESSE E FILED THE RETURN OF INCOME FOR THE A.Y. 2007-08 ON 23.09.2008 IN WHICH THE TOTAL INCOME WAS SHOWN AT RS 135.47 CRORES AND DUE TAX PAYABLE ON THE SAID INCOME WAS SHOWN AT RS 43.92 CRORES. THE ASSESSEE ALSO FI LED THE RETURN OF INCOME FOR THE A.Y. 2008-09 ON THE SAME DATE AND TH E TOTAL INCOME WAS DECLARED AT RS 116.49 CRORES AND DUE TAX WAS SHOWN PAYABLE AT RS 39.55 CRORES. HOWEVER THE ASSESSEE DID NOT PAY ANY SELF -ASSESSMENT TAX FOR BOTH THE ASSESSMENT YEARS. THE A.O. THEREFORE PA SSED THE ORDER U/S.140A(3) DATED 20.10.2008 AND TREATED THE ASSESS EE IN DEFAULT UNDER THE ACT. THE RETURN OF INCOME FOR THE A.Y. 2007-08 WAS PROCESSED ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 3 U/S.143(1) AND DEMAND OF RS 58.61 CRORES FOR THE A. Y. 2007-08 WAS RAISED. THE A.O. PROCEEDED TO LEVY THE PENALTY U/S .221(1) OF THE ACT R.W.S.140A(3) AS THE ASSESSEE FAILED TO PAY THE DUE TAX ON THE RETURNED INCOME TREATING THE ASSESSEE IN DEFAULT IN PAYMENT OF THE TAXES AND INTEREST IN RESPECT OF BOTH THE ASSESSMENT YEARS. THE ASSESSEE CONTENDED THAT DUE TO ACUTE SHORTAGE OF FUNDS IT CO ULD NOT PAY THE TAX AND OFFERED TO PAY THE SAME BY INSTALLMENT BY 31ST MARCH 2009. THE A.O. REJECTED THE PLEA OF THE ASSESSEE. IT WAS NOT ICED BY THE A.O. THAT THE ASSESSEE HAS MADE SUBSTANTIAL SALES IN THE A.YS. 20 07-08 AND 2008-09 TO THE EXTENT OF RS 268.94 CRORES AND RS 223.25 CRO RES RESPECTIVELY. THE A.O. WAS ALSO NOT IMPRESSED WITH THE CONTENTION OF THE ASSESSEE THAT DUE TO FINANCIAL CRUNCH THE ASSESSEE WAS UNABLE TO PAY DUE TAX ON THE RETURN OF INCOME. THE ASSESSEE ALSO TOOK THE STAND THAT D UE TO PROVISIONAL ATTACHMENT ORDER ISSUED U/S.281B AND HENCE IT BECOM E VERY DIFFICULT FOR THE ASSESSEE TO LIQUIDATE THE ASSETS LIKE STOCK-IN- TRADE FOR PAYMENT OF THE TAXES. IT APPEARS THAT THE ASSESSEE APPROACHED TO THE LD. CIT (A)-VIII MUMBAI FOR LIFTING OR CANCELING THE ORDER PASSED U/ S.281B BUT THE SAME WAS ALSO REJECTED AND THE LD. CIT (A) INFORMED THE ASSESSEE THAT IF ANY PROPOSAL OF THE SALE OF THE FLATS IS FILED THEN THE SAID PROPOSAL WOULD BE CLEARED IMMEDIATELY. FINALLY THE A.O. LEVIED THE PENALTY AT 5% U/S.221(1) OF THE ACT OF THE TOTAL TAX DUE AS PER O RIGINAL RETURNS FILED. THE CHALLENGED PENALTY ORDERS BEFORE THE LD. CIT(A) . THE ASSESSEE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF D.M. MALANI 174 TAXMAN 263 AND SUBMITTED THAT THOUGH THE ASSESSEE I S HAVING THE HUGE ASSETS BUT THE ASSESSEE IS NOT IN A POSITION TO LIQ UIDATE THE SAME. AT THE FIRST INSTANCE FOR THE REASON THAT THE REALITY EST ATE WAS IN CRISIS AND SUBSTANTIAL MONEY OF THE FLAT BOOKING WAS REFUNDED TO THE BUYERS THERE WAS MASS CANCELLATIONS OF BOOKING AND SECONDLY AS THE DEPARTMENT HAS ISSUED THE PROHIBITORY ORDER U/S.281B THAT ALSO CRE ATED THE PROBLEM AS PROSPECTIVE BUYERS KEPT DISTANCE FROM THE ASSESSEE- COMPANY FOR BUYING THE FLATS IN ITS PROJECTS. HENCE IT WOULD NOT BE POSSIBLE FOR THE ASSESSEE ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 4 TO LIQUIDATE THE ASSETS AND TO MAKE THE PAYMENT. T HE ASSESSEE THEREFORE CONTENDED THAT THE FINANCIAL CRUNCHES IS A GOOD AND REASONABLE CAUSE FOR NON-PAYMENT OF THE TAXES AND H ENCE THERE WAS NO REASON TO LEVY PENALTY U/S.221(1) OF THE ACT. THE A SSESSEE COULD NOT GET ANY RELIEF FROM THE LD. CIT(A) AND ALL CONTENTIONS OF THE ASSESSES WERE REJECTED. NOW THE ASSESSEE IS IN APPEAL BEFORE U S. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. THE SURVEY ACTION U/S.133A WAS CARRIE D OUT IN THE BUSINESS PREMISES OF THE ASSESSEE ON 11TH & 12 SEPTEMBER 20 08. THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE HAS NOT PA ID ANY ADVANCE TAX NOR HAD FILED THE RETURN FOR THE A.Y. 2007-08 TILL THE DATE OF SURVEY THOUGH THE SAME WAS DUE ON 30.11.2007. SO FAR AS A SSESSMENT YEAR 2008-09 IS CONCERNED ON THE DATE OF SURVEY DUE DA TE FOR FILING OF THE RETURN WAS NOT EXPIRED. THE ASSESSEE FILED THE RET URNS OF INCOME FOR THE A.YS. 2007-08 AND 2008-09 ON 23.9.2008 BUT WITHOUT PAYMENT OF THE TAX. THE A.O. PROCEEDED TO LEVY THE PENALTY U/S.22 1(1) OF THE ACT TREATING THE ASSESSEE IN DEFAULT. IT APPEARS THAT THE A.O . ALSO PASSED THE ORDER U/S.281B OF THE ACT ON 17.10.2008 PROVISIONALLY ATT ACHING ALL THE IMMOVABLE PROPERTY OF THE ASSESSEE. THE LD. COUNSE L VEHEMENTLY ARGUED THAT DUE TO VERY BAD FINANCIAL ECONOMIC SCENARIO T HERE WAS A SERIOUS SET- BACK TO THE REALITY INDUSTRY. THOUGH THE ASSESSEE WAS SHOWING GOOD SALES THERE WAS A SERIOUS CRUNCH IN THE LIQUIDITY AS THE PAYMENTS WERE NOT COMING. IT IS ARGUED THAT THE ASSESSEE IS SINC ERE TAX PAYER. NOWHERE THERE WAS ANY DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO AVOID THE LEGITIMATE DUE TAX. HE FURTHER SUBMITS THAT THE AS SESSEE FILED THE REVISED RETURN OF INCOME FOR THE A.Y. 2007-08 AND IN THE RE VISED RETURN THE TAX LIABILITY FOR THE A.Y. 2007-08 WAS REDUCED TO RS 15 .30 LACS. HE FURTHER SUBMITS THAT ONCE THE REVISED RETURN IS FILED THEN THE ORIGINAL RETURN BECOMES NON-EST AND THE A.O. HAS TO TAKE THE COGNIZ ANCE OF THE REVISED RETURN. HE FURTHER SUBMITS THAT ASSESSEE HAS PAID T AX TO THE EXTENT OF ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 5 INCOME DECLARED IN REVISED RETURN. HE FURTHER ARGU ES THAT IN THE CASE OF D.M. MALANI (SUPRA) THE HONBLE SUPREME COURT HAS W AIVED THE INTEREST LEVIED U/S.220 FOR NON-PAYMENT OF THE TAX BY THE AS SESSEE DUE TO SEVERE CASH CRUNCH AND NON-AVAILABILITY OF THE FUNDS FOR N ON-PAYMENT OF THE TAX ITSELF TREATED AS A REASONABLE CAUSE. HE FURTHER S UBMITS THAT THERE IS A DISCRETION TO THE A.O. U/S.221(1) FOR INVOKING THE HARSH PROVISION OF SEC. 221(1) AND SAME IS TO BE INVOKED IN ONLY RARE CASE. IT IS ARGUED THAT SUFFICIENT SAFEGUARDS ARE PROVIDED IN THE ACT TO CO MPENSATE THE REVENUE BY WAY OF THE PAYMENT OF THE INTEREST IN CASE THE ASSESSEE FAILS TO MAKE THE PAYMENT ON THE DUE DATES. HE FURTHER SUBMITS TH AT PENALTY PROCEEDINGS ARE QUSI-JUDICIAL PROCEEDINGS AND A.O. HAS TO ESTABLISH THE DELIBERATE ACT ON THE PART OF THE ASSESSEE. HE PLE ADED FOR CANCELING THE PENALTY. PER CONTRA THE LD. D.R. SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. 4. SECTION 221 READS AS UNDER:- (1) WHEN AN ASSESSEE IS IN DEFAULT OR IS DEEMED TO BE IN DEFAULT IN MAKING A PAYMENT OF TAX HE SHALL IN ADDITION TO T HE AMOUNT OF THE ARREARS AND THE AMOUNT OF INTEREST PAYABLE UNDER SU B-SECTION (2) OF BE LIABLE BY WAY OF PENALTY TO PAY SUCH AMOUNT AS THE ASSESSING OFFICER MAY DIRECT AND IN THE CASE OF A CONTINUING DEFAULT SUCH FURTHER AMOUNT OR AMOUNTS AS THE ASSESSING OFFICER MAY FROM TIME TO TIME DIRECT SO HOWEVER THAT THE TOTAL AMOUNT OF PENALTY DOES NOT EXCEED THE AMOUNT OF TAX IN ARREARS : PROVIDED THAT BEFORE LEVYING ANY SUCH PENALTY THE ASSESSEE SHALL BE GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD : PROVIDED FURTHER THAT WHERE THE ASSESSEE PROVES TO THE SATISFACTION OF THE [ASSESSING] OFFICER THAT THE DEFAULT WAS FOR GOOD AND SUFFICIENT REASONS NO PENALTY SHALL BE LEVIED UNDER THIS SECT ION.] [EXPLANATION.FOR THE REMOVAL OF DOUBT IT IS HERE BY DECLARED THAT AN ASSESSEE SHALL NOT CEASE TO BE LIABLE TO ANY PENALT Y UNDER THIS SUB- SECTION MERELY BY REASON OF THE FACT THAT BEFORE TH E LEVY OF SUCH PENALTY HE HAS PAID THE TAX.] ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 6 (2) WHERE AS A RESULT OF ANY FINAL ORDER THE AMOUN T OF TAX WITH RESPECT TO THE DEFAULT IN THE PAYMENT OF WHICH THE PENALTY WAS LEVIED HAS BEEN WHOLLY REDUCED THE PENALTY LEVIED SHALL BE CANCELL ED AND THE AMOUNT OF PENALTY PAID SHALL BE REFUNDED. 5. AS PER THE SCHEME OF THE SAID SECTION IT IS DIS CRETION OF THE A.O. TO LEVY THE PENALTY IF THE ASSESSEE IS TREATED AS A D EFAULTER IN THE PAYMENT OF THE TAXES. THERE IS NO DISPUTE ABOUT THE FACT T HAT THE ASSESSEE HAS NOT PAID ANY ADVANCE TAX IN BOTH THE ASSESSMENT YEARS A ND ALSO DID NOT PAY SELF ASSESSMENT TAX AS PER PROVISIONS OF SEC.140A O F THE ACT. DURING THE COURSE OF THE SURVEY ACTION AUDITED STATEMENT OF A CCOUNTS WERE FOUND FOR THE A.Y. 2007-08 IN WHICH THE ASSESSEE HAS DECL ARED SUBSTANTIAL PROFIT. IN THE ORIGINAL RETURN FILED BY THE ASSESS EE FOR THE A.Y. 2007-08 THE SAME PROFIT WAS DECLARED BUT SUBSEQUENTLY THE ASSESSEE FILED THE REVISED RETURN. WE DO NOT WANT TO GO INTO THE LEGA LITY AND SANCTITY OF THE REVISED RETURN FILED BY THE ASSESSEE. THE CONTENTIO N OF THE ASSESSEE IS THAT THERE WAS FINANCIAL CRUNCH DUE TO LACK OF LIQU IDITY AS REALITY MARKET WAS BADLY AFFECTED IN THAT PERIOD. THE QUESTION BEF ORE US IS WHETHER THE DEFENCE OF THE ASSESSEE THAT DUE TO THE FINANCIAL C RUNCH IT WAS NOT POSSIBLE FOR THE ASSESSEE TO MAKE THE PAYMENT OF TA XES IS GOOD AND REASONABLE CAUSE. IT IS TRUE THAT THE ASSESSEE HAS SHOWN SUBSTANTIAL SALES IN BOTH THE ASSESSMENT YEARS. 6. IN THE CASE OF B.M. MULANI (SUPRA) THE ASSESSEE WAS CARRYING ON THE MONEY LENDING BUSINESS AND TRADING IN SHARES AN D SECURITIES. THE RAID WAS CONDUCTED U/S.132. THE ASSESSEE FILED DE CLARATION U/S.132(4) TO PAY THE TAXES FROM OUT OF THE SEIZED SHARES AND SECURITIES STATING THAT THE SHARES EXPEDITIOUSLY DISPOSED OFF AND SALE PROC EEDS BE APPROPRIATED TOWARDS THE TAXES. THE APPELLANT-ASSESSEE FILED AN APPLICATION FOR WAIVER OF INTEREST BUT THE SAME WAS REJECTED BY THE COMMI SSIONER. WHEN THE MATTER REACHED BEFORE THE HONBLE SUPREME COURT TH E ASSESSEE TOOK THE ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 7 PLEA THAT IF THE INTEREST IS NOT WAIVED THEN THE AS SESSEE WOULD SUFFER GENUINE HARDSHIP. THE HONBLE SUPREME COURT EXPLAI NED THE TERM GENUINE AND SET ASIDE THE MATTER WITH CERTAIN DIR ECTIONS TO THE CIT (A) FOR AFRESH ADJUDICATION. IN OUR OPINION FACTS IN THE CASE OF B.M. MULANI (SUPRA) ARE IN THE DIFFERENT CONTEXT. 7. THE ASSESSEE HAS FILED THE PAPER BOOK WHICH IS P LACED ON RECORD. THE PLEA OF THE ASSESSEE IS THAT THE A.O. HAS PASS ED THE ORDER U/S.281B OF THE ACT MAKING THE PROVISIONAL ATTACHMENT THAT A FFECTED THE LIQUIDITY. COPY OF THE ORDER IS PLACED AT PAGE NO.49 AND 50 OF THE COMPILATION. IT IS SEEN THAT THE ORDER IS PASSED ON 17.10.2008 I.E. AF TER THE SURVEY ACTION AND IT WAS NOT PASSED IN THE FINANCE YEAR 2006-07 O R 2007-08. HENCE THIS DEFENCE OF THE ASSESSEE IS NOT HELPFUL TO SUPP ORT THE CONTENTION THAT DUE TO PROVISIONAL ATTACHMENT ORDER THERE WAS LIQU IDITY CRUNCH IN F. YRS. 2006-07 & 07-08. THE A.O. PASSED THE ORDER U/ S.140A(3) TREATING THE ASSESSEE IN DEFAULT IN RESPECT OF THE TAX AND I NTEREST REMAINING UNPAID ON THE INCOME DECLARED IN THE RETURNS FOR TH E A.YS. 2007-08 AND 2008-09. AS PER THE COPY OF THE BALANCE-SHEET FILE D ON RECORD FOR THE YEAR ENDING 31.3.2007 THE CASH IN HAND AS ON 31.3. 2007 WAS DECLARED AT RS 1 60 71 286/- IN ADDITION TO THE BALANCES IN THE BANK PLUS F. DS AT RS 2 44 55 643/- AND RS 3 06 47 176/- RESPECTIVELY. HENCE SO FAR THE FINANCIAL YEAR 2006-07 RELEVANT TO THE A.Y. 2007-08 IS CONCERNED IN OUR OPINION THE ASSESSEE HAS SUFFICIENT LIQUIDITY TO P AY THE TAX. SO FAR AS FINANCIAL YEAR 2007-08 AS PER THE COPY OF THE BALA NCE-SHEET AS ON 31.3.2008 RELEVANT TO THE A.Y. 2008-09 THE ASSESSEE HAS SHOWN THE CASH IN HAND AT RS 2 36 48 223/- AND BALANCE WITH THE BA NK AS WELL AS FIXED DEPOSITS ARE TO THE EXTENT OF RS 1 34 76 101/- AND RS 4 05 37 644/- RESPECTIVELY. THIS SHOWS THAT THE ASSESSEE HAS SUF FICIENT CASH LIQUIDITY IN THE FINANCIAL YEAR 2006-07 (A.Y. 2007-08) AS WELL A S IN F. Y. 2007-08 (A.Y. 2008-09). AS PER EVIDENCES ON RECORD IT IS S EEN THAT ASSESSEE HAD SUFFICIENT CASH IN HAND AND ALSO BANK BALANCES AND HENCE IT CAN NOT BE ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 8 SAID THAT ASSESSEE WAS HAVING FINANCIAL CRUNCH TO P AY SOME TAX. WE THEREFORE REJECT SAID CONTENTION. 8. THE ASSESSEE HAS ALTERNATIVELY CONTENDED THAT RE VISED RETURNS ARE FILED FOR BOTH THE ASSESSMENT YEARS AND AT THE MOST PENALTY SHOULD BE RESTRICTED AND COMPUTED ON THE INCOME DECLARED IN T HE REVISED RETURNS FOR BOTH THE ASSESSMENT YEARS. IT APPEARS THAT THE ASSESSEE HAS REVISED THE TOTAL INCOME. WE DO NOT WANT TO EXPRESS ANYTHI NG ON THE FATE OF THE REVISED RETURNS FILED BY THE ASSESSEE BUT AT THE SA ME TIME IN OUR OPINION THIS MATTER HAS TO GO BACK TO THE A.O. FOR FRESH DETERMINATION OF THE QUANTUM OF THE PENALTY IN THE LIGHT OF THE FACT THAT THE ASSESSEE HAS FILED THE REVISED RETURNS. THE A.O. IS THEREFORE DIRECTED THE RE-COMPUTE THE PENALTY PAYABLE U/S.221(1) AS SELF ASSESSMENT TAX UNDER SEC. 140A IS TO BE WORKED OUT ON THE INCOME DECLARED IN THE R EVISED RETURNS IF SAID RETURNS HAVE BEEN ACTED UPON BY THE A.O. IF HOWEVER SAID REVISED RETURNS ARE NOT TAKEN INTO CONSIDERATION BY THE A.O. AND AR E TREATED AS INVALID RETURNS IN THAT CASE PENALTY SHOULD BE COMPUTED AS PER PROVISIONS OF LAW BUT IT SHOULD NOT BE MORE THAT 5% OF TAX DUE BU T NOT PAID UNDER SEC. 140A OF THE ACT. NEEDLESS TO SAY THAT THE A.O. SHOU LD GIVE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 9. IN THE RESULT BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 1TH MARCH 2011. SD/- SD/- ( R.S. SYAL) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI DATE: 11TH MARCH 2011 ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 9 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) VIII MUMBAI. 4) THE CIT 8 MUMBAI. 5) THE D.R. A BENCH MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T. MUMBAI *CHAVAN ITA 5224 AND 5225/M/2009 LOK HOUSING AND CONSTRUCTIONS LTD. 10 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 08.03.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 08.03.2011 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