Income Tax Appellate Tribunal - Bangalore
M/S. Metal Closures Pvt. Ltd, Bangalore vs Department Of Income Tax on 22 September, 2011
IN THE INCOME-TAX APPELLATE TRIBUNAL
BANGALORE BENCH 'B', BANGALORE
BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER
AND
SMT. P MADHAVI DEVI, JUDICIAL MEMBER
I.T.A. No.1214(Bang.)/2010
(Assessment Year : 2008-2009)
The Deputy Commissioner of Income-tax,
Circle-11(4),
Bangalore Appellant
Vs
M/s Metal Closures Pvt. Ltd.,
No.39/4B, 12trh K.M. Kanakapura Road,
Bangalore-560 058
PAN No.AABCM1666J Respondent
Revenue by : Smt Susan Thomas Jose, JCIT
Assessee by : Shri V.Srinivasan, CA
Date of hearing : 22-09-2011
Date of pronouncement : 29-09-2011
ORDER
PER SMT P. MADHAVI DEVI, JM ;
This appeal by the revenue relates to assessment year 2008-09. The revenue has raised the following grounds in its appeal;
1. The ld.CIT(A) erred in deleting penalty of Rs.30.00 lakhs u/s 221 without appreciating the fact that the assessee has paid self assessment 2 ITA.No.1214(B)/10 tax only after initiation of penalty proceedings u/s 221.
2. The ld. CIT(A) erred in not appreciating the fact that the assessee haw been a habitual defaulter as regards payment of advance tax in the preceding assessment years and the same conduct continued in the assessment year 2008- 09 also; and has been paying only self assessment tax in lumpsum in the past and for the assessment year under consideration he had not paid the self assessment tax also even after the return was filed.
3. The ld.CIT(A) erred in not appreciating the fact that the assessee has continued to default in paying advance tax even for the assessment year subsequent to the assessment year under consideration.
4. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the AO may be restored.
2. The brief facts of the case are that the assessee is a manufacturer of metal caps, metal crowns, metal jackets etc. For the relevant assessment year, it filed its return of income on 30-09-2008, declaring a sum of Rs.1,47,06,940/- but the said 3 ITA.No.1214(B)/10 tax was not paid by the assessee. The AO issued notice u/s 221 along with the show cause notice which was served on the assessee to appear before him on 26-11-2008. The representative of the assessee appeared before the AO and apprised him about the financial difficulties of the assessee and requested time upto 10-12-2008 to pay the taxes. However, the assessee could not make the entire amount but only paid a part payment of Rs.25.00 lakhs towards self assessment tax on 26- 11-2008. The explanation of the assessee that the assessee is in financial difficulties was not accepted by the AO and he proceeded to levy penalty of Rs.30.00 lakhs u/s 221 of the Act vide his order dated 26-11-2008.
2.1 Aggrieved, the assessee preferred an appeal before the CIT(A) detailing the reasons for its inability to pay the taxes on time.
3. After considering the assessee submissions, the CIT(A) observed that the AO has failed to give sufficient opportunity of being heard to the assessee which is pre-requisite u/s 221 of the Act. Thereafter, he proceeded to observe that the AO relied upon the liquidity position of the assessee as on 31-03-2008 and not as on 30-09-2008 for declining the time sought by the assessee. He also considered the assessee's submissions and 4 ITA.No.1214(B)/10 accepted the contention of the assessee that it was under
severe financial difficulties. He accordingly, deleted the penalty and the revenue is in appeal before us.
4. The learned DR placed reliance upon the order of the AO stating that sufficient opportunity of hearing was given to the assessee but inspite of its own undertaking to pay the taxes before 10-12-2008, the assessee has not paid any amount.
5. The learned counsel for the assessee on the other hand, relied on the orders of the CIT(A).
6. Having heard both the parties and having considered the rival contentions and the material on record, we find that the CIT(A) has stated that the AO has not given sufficient opportunity to the assessee, while on the other hand, he holds that the AO has considered the liquidity position as on 31-03- 2008 and not on 30-09-2008. Thus, the findings of CIT(A) are contrary to each other in as much as the AO cannot consider assessee's submission without hearing the assessee. Further, the CIT(A) has also not called for any remand report from the assessing authority on the submissions made by the assessee before the CIT(A) only, which is in violation of Rule 46A of IT Rules. Under these circumstances, we deem it fit and proper to remand this issue to the file of the AO to reconsider the same in 5 ITA.No.1214(B)/10 accordance with law. Needless to mention that the assessee shall be given a fair opportunity of hearing.
7. In the result, the appeal of the revenue is allowed for statistical purposes.
Order pronounced in the open court on the 29th September, 201.
Sd/- Sd/-
(N.K.SAINI) (SMT. P. MADHAVI DEVI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Place: Bangalore
Dated: 29-09-2011
am*
Copy to :
1. The Assessee
2. The Revenue
3. CIT(A)
4. CIT
5. DR
6. GF(B'lore)
By Order
AR, ITAT, BANGALORE