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2016 (11) TMI 1145 - ITAT MUMBAI

2016 (11) TMI 1145 - ITAT MUMBAI - TMI - Levy of penalty u/s 221(1) - failure to pay due taxed before filing of the return - Held that:- In the case on hand, is that the assessee 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 Act was determined by the 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, .....

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in accordance with 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, except 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 paying the said taxes - levy of penalty confirmed. - ITA No. 7157/Mum/2014 - Dated:- 21-9-2016 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Appellant .....

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ht on his behalf. Even the notice for hearing issued 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 issue of notice to the parties. On 15.09.2015, when the case was called for 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 circumstances, as me .....

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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 carried out between September 2012 to December' 2012 before the same learned officer, Shri K. V. Sreenivas; b. The assessment was made U/s. 143(3) of the Income Tax Act, 1961 and the order dated 31.12.2012 was delivered to us accordingly by hand through our same Authorised Chartered Accountant, who had been there since past se .....

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provide some time was also discussed during our various meetings pertaining to outstanding tax payment of ₹ 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 for 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 28.01.2013 for the Asst. Year 2012-2013 levied a penalty of ₹ 244, .....

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when the dates 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 different 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 2010-2011) was being discussed and disposed, no talks were ever carried out for the Asst. .....

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from the above, that the total refund expected to be released from the Department of Income Tax was approximately to the tune of ₹ 390,000/-. Since the total liability for the Fin Year 2011-2012 stood at ₹ 244,943/- we were expecting the refund to get credited. The refund was badly awaited to curtail 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 .....

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unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the au .....

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ove. All earlier cases were refund cases, and 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 always pray. 3.2 Though the assessee has raised eight grounds in this appeal, however the sole issue on which the appeal is preferred 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 hear .....

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the case on hand was that the 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 assessee s submissions, the assessee has failed to demonstrate or explain that 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 the self assessment tax .....

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that since the grounds raised by the assessee (supra) are all arguments put forth before the authorities below in the course of penalty proceedings and which has been considered by them while passing of the orders, and nothing has been brought on record by the assessee to controvert the findings in the impugned order, the assessee s 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 .....

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x 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 the ITD system noticed that the appellant did not pay the self assessment tax amounting to ₹ 2,44,943/- as claimed in the return of income filed. The A.O subsequently requested the appellant to furnish the proof of payment of self assessment tax and also issued a show cause notice as to why penalty u/s .....

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-. 2.2 Aggrieved by the said action of the A.O., the appellant is in appeal, before me. 2.3 In appeal proceedings, the appellant vide his letter dated 23.2.2013, has submitted as under: At the outset, let me state that the undersigned runs a transport agency in the proprietary capacity under the name and style of M/s SPEED CARGO CARRIERS. The self assessment tax for the Ast. Year 2012-13 to the tune of ₹ 244,943/ - (Rupees Two Lacs Forty Four Thousand Nine Hundred & Forty Three Only) w .....

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ngs in the month of December, 2012. Further, the payment of ₹ 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 mentioned by the Learned Officer u/s 221(1) of the Income-tax Act, 1961 corresponds with the period of hearing carried out for disposal of scrutiny assessment for the Asst. year 2010-2011 and hence his remark that "None Attended" is misconceived and far from r .....

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od as mentioned in his order u/s 221(1) for disposal of scrutiny case for Asst. Year 2010-2011, and hence it is not true that we committed default u/ s 221(1) of the Incometax Act, 1961. The undersigned requests your goodself to grant stay to avoid undue hardship. Kindly condone any delay (if any) which may have been cause at our end. The undersigned or his representative shall attend each dates as provided by the Hon'ble Authority to ensure quick disposal of the case filed before your Excel .....

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nstead of demonstrating or explaining the situations or poor financial position which prevented 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 proceedings. In my view, the appellant has failed to appreciate the fact that scrutiny proceedings and penalty proceedings are two separate and inde .....

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.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. 2.5 Provisions of Sec.140A(3)r.w.s.221(1)of the Act are very clear. Section 140A(3) stipulates that if any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, be deemed to be an assessee in default in respect of .....

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ices were sent on the address of assessee which was available in PAN database. Even when the opportunities were granted and availed of in appellate proceedings, the appellant failed to buttress his claim with documentary evidence like bank pass book or cash book to show that he was suffering with financial crunch. 2.7 As per the provisions of the section 221(1), penalty is not to be levied if assessee proves, to the satisfaction of the AO, that the default was for good and sufficient reasons. Se .....

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ssee. In the case before me, it is found that the AO had levied the penalty 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 provisions of the Act. Hence advancement of statement that due to financial crisis he could not pay taxes, that too without any documentary evidence in .....

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