GEMINI ENGI-FAB, MUMBAI v. ITO WD 8(1)(4), MUMBAI

ITA 6270/MUM/2009 | 2008-2009
Pronouncement Date: 30-07-2010 | Result: Allowed

Appeal Details

RSA Number 627019914 RSA 2009
Assessee PAN AAACG7048N
Bench Mumbai
Appeal Number ITA 6270/MUM/2009
Duration Of Justice 7 month(s) 26 day(s)
Appellant GEMINI ENGI-FAB, MUMBAI
Respondent ITO WD 8(1)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted G
Tribunal Order Date 30-07-2010
Date Of Final Hearing 27-07-2010
Next Hearing Date 27-07-2010
Assessment Year 2008-2009
Appeal Filed On 04-12-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI PRAMOD KUMAR (AM) AND SMT. ASHA VIJAYARAGHAVAN (JM) ITA NO. 6270/MUM/2009 ASSESSMENT YEAR-2008-09 M/S. GEMINI ENGI - FAB LTD. 501 PALM SPRING LINK ROAD MALAD (W) MUMBAI-400 064 PAN-AAACG7048N VS. THE ITO WARD - 8(1)(4) MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI UMESH KOLAPKAR RESPONDENT BY: SHRI S.M. MAHAPATRA O R D E R PER SMT. ASHA VIJAYARAGHAVAN (JM) THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER DATED 24.9.2009 PASSED BY THE LD. CIT(A)-16 F OR THE ASSESSMENT YEAR 2008-09. 2. THE ASSESSEE IS A PUBLIC LIMITED COMPANY. IT IS A MANUFACTURER OF PROCESS VESSELS AND EQUIPMENTS MAINLY USED IN TH E REFINERIES PETRO-CHEMICAL PLANTS DAIRY PLANTS CEMENT PLANTS ETC. THE ASSESSEE HAS ITS FACTORY PREMISES AT PLOT NO. 1504 1505 & 1 506 G.I.D.C. UMBERGAON GUJARAT STATE. THE ASSESSEE FIRM FILED ITS RETURN OF INCOME ON 29.9.2008 DECLARING TOTAL INCOME OF RS. 6 17 23 850/-. THE ASSESSEE COMPANY HAS NOT PAID THE SELF ASSESSMENT T AX OF RS. 1 51 03 840/- BEFORE FILING OF ITS RETURN OF INCOME I.E. 30.9.2008. 3. THE ASSESSEE SUBMITTED THAT DURING THE PERIOD FR OM 15 TH SEPT. 2008 TO 30 TH SEPT. 2008 COMPANIES FINANCIAL POSITION WAS NOT S OUND ITA NO. 6270/M/09 2 AND COMPANY HAS ALREADY ISSUED POST DATED CHEQUES T O THEIR SUPPLIES AND ALSO EXPECTING PAYMENTS FROM THE CUSTOMER WHICH COULD NOT RECEIVE IN TIME. AS A RESULT THE ASSESSEE FIRM FI LED THE RETURN WITHOUT MAKING PAYMENT OF TAX DUE. HOWEVER THE ASSESSEE MA DE THE PAYMENT ON 31 ST OCTOBER 2008. 4. THE LD. ASSESSING OFFICER HAS LEVIED THE PENALTY OF RS. 7 55 192/- I.E. @ 5% ON THE AMOUNT OF TAX REMAINED TO BE PAYABLE U/S. 221(1) OF THE I.T. ACT 1961. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A). LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFF ICER BY OBSERVING AS UNDER: ON THE TOTALITY OF FACTS AND CIRCUMSTANCES IT IS HELD THAT THE AO HAS RIGHTLY DECLARED THE COMPANY AS ASSESSE E IN DEFAULT U/S. 140A(3) OF THE I.T. ACT AND HAS ALSO RIGHTLY LEVIED PENALTY U/S. 221 OF THE I.T. ACT. HENCE TH E PENALTY LEVIED BY THE AO IS CONFIRMED AND THE GROUND OF APP EAL IS DISMISSED. 6. AGGRIEVED ASSESSEE IS IN APPEAL BEFORE US. THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF THE LOWER AUTHORITIES. 7. THE LD. COUNSEL FOR THE ASSESSEE SHRI UMESH KOLA PKAR PRAYED THAT THE ASSESSEE SHALL NOT BE TREATED AS AN ASSESS EE IN DEFAULT AS THE DEFAULT IN MAKING THE PAYMENT WAS NOT WILLFUL AND O NLY CIRCUMSTANTIAL DUE TO PAUCITY OF FUNDS. HE FURTHER SUBMITTED THAT BECAUSE OF FINANCIAL CONSTRAINTS ASSESSEE-COMPANY COULD NOT PAY THE SELF ASSESSMENT TAX WITHIN THE TIME ALLOWED UNDER THE ACT. THIS BEING A REASONABLE CAUSE HE PRAYED THAT PENALTY U/S. 221(1) R.W.S. 140A(3) S HOULD NOT BE IMPOSED FOR THE DEFAULT IN PAYMENT OF SELF ASSESSME NT TAX. HE FURTHER ITA NO. 6270/M/09 3 RELIED UPON THE DECISION IN THE CASE OF CIT VS MYSO RE FERTILISER CO. 145 ITR 91. 8. WE HEARD BOTH THE PARTIES. WE FIND THAT THE PRO VISO TO SEC. 221(1) REQUIRES THAT BEFORE LEVY ANY SUCH PENALTY THE ASSESSEE SHALL BE GIVEN AN OPPORTUNITY OF BEING HEARD AND WHERE TH E ASSESSEE PROVES TO THE SATISFACTION OF THE AO THAT THE DEFAULT WAS FOR GOOD AND SUFFICIENT REASONS NO PENALTY SHALL BE LEVIED UNDE R THIS SECTION. 9. THE ASSESSEE HAD PAID THE AMOUNT OF SELF ASSESSM ENT TAX ON 31.10.2008 I.E. ONE MONTH AFTER THE ACTUAL DATE ON WHICH THE PAYMENT SHOULD HAVE BEEN MADE. THE ASSESSEES COUNSEL PLEA DED FINANCIAL CRUNCH AS REASON FOR NON-PAYMENT OF SELF ASSESSMENT TAX. TAKING INTO CONSIDERATION THE FACT THAT THE ASSESSEE HAD GOOD A ND SUFFICIENT REASON BEING UNDER FINANCIAL DIFFICULTY. IT WAS FOR THE A O TO HAVE EXERCISED HIS DISCRETION IN ORDER TO LEVY THE PENALTY OR NOT AND THE AO DECIDED TO LEVY PENALTY. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS AND THE CASE LAWS ON THE ISSUE. WE ARE INCLINED TO FOLLOW THE RATIO OF THE DECISION IN THE CASES OF CIT VS KALYANMAL MILLS TEN T FACTORY 116 ITR 881 (MP) AND E.K. VERGHESE VS ITO (96 ITR 577) (KER ) WHEREIN IT HAS BEEN HELD THAT TO JUSTIFY IMPOSITION OF PENALTY U/S . 221 THE AO SHOULD NOT ONLY FIND THAT THERE WAS DEFAULT BUT SHOULD ALS O CONSIDER THE QUESTION AS TO WHETHER THERE WAS GOOD AND SUFFICIEN T REASON FOR THE DEFAULT. WE ALSO FIND THAT THE ASSESSEE HAS MADE TH E PAYMENT JUST AFTER A MONTH FROM THE DUE DATE. RELYING UPON THE BONAFIDES OF THE ASSESSEES PLEA WE DELETE THE PENALTY LEVIED U/S. 221(1) OF THE I.T. ACT. ITA NO. 6270/M/09 4 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 30 TH DAY OF JULY 2010 SD/- SD/- (PRAMOD KUMAR) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICI AL MEMBER MUMBAI DATED 30 TH JULY 2010 RJ COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-CONCERNED 4. THE CIT(A)-CONCERNED 5. THE DR G BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR I.T.A.T MUMBAI ITA NO. 6270/M/09 5 DATE INITIALS 1 DRAFT DICTATED ON: 27.7.2010 SR. PS/PS 2. DRAFT PLACED BEFORE AUTHOR: 2 8 . 7 .2010 ______ SR. PS/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: _________ ______