IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH `B' MUMBAI
BEFORE SHRI B.R. MITTAL (JUDICIAL MEMBER) AND
SHRI RAJENDRA (ACCOUNTANT MEMBER)
ITA Nos. 6327 & 6328/Mum/2009
Assessment Years-2007-08 & 2008-09
M/s. Bhansali Engineering Polymers The ACIT, Range-8(1),
Ltd., Aayakar Bhavan,
Bhansali House, Plot No. 5A, Mumbai-400 020
Off Veera Desai Road, Vs.
Appellant by: Shri Vipul B. Joshi
Respondent by: Shri Sameer G. Dalal
Date of Hearing :27.06.2012
Date of pronouncement: 06.07.2012
PER B.R. MITTAL (JM):
The assessee has filed these two appeals for assessment years 2007-
08 and 2008-09 against common orders of Ld. CIT(A) dt. 18th September,
2009. Since issue involved in both these appeals are same, we heard these
appeals together and dispose of the same by a common order for the sake of
2. Both these appeals are arising out of orders passed by AO u/s. 221(1)
of the I.T. Act to levy penalty of Rs. 1,24,74,374/- for assessment year 2007-
08 and Rs. 1,15,75,765/- for assessment year 2008-09.
3. Firstly we take up appeal for assessment year 2007-08.
2 ITA Nos. 6327 & 6328/M/09
4. The Assessing Officer has stated that assessee was to pay Self
Assessment Tax of Rs. 4,98,97,391/- before 31st October, 2007 but had not
paid the same in time. He has stated that show cause notice on 25.11.2008
was issued as to why assessee should not be treated as an assessee in
default u/s. 140A(3) in respect of the unpaid tax. He has stated that no reply
was received and therefore assessee has no reason for non-payment of Self
assessment tax in time. The AO levied penalty of 25% on self assessment
tax payable which comes to Rs. 1,24,74,374/-. The Ld. CIT(A) has stated
that assessee has failed to pay the advance tax and self assessment tax with
the return of income filed and upto the date of filing the appeals, hence
appeal is not admitted as per section 249(4) of the I.T. Act and confirmed
the action of AO to levy penalty u/s.221 of the I.T. Act.
5. In the appeal before us, Ld. AR referred to page-30 of the Paper Book
and submitted that assessee paid entire tax with interest. He further
submitted that the show cause notice dt. 25.11.2008 was never received by
assessee and the said fact was also contended before Ld. CIT(A) but no
finding has been given by him. The Ld. Departmental Representative could
not dispute the fact save and except relying on the orders of authorities
6. On consideration of the above submission of Ld. Representatives of the
parties and the specific averments made by assessee before Ld. CIT(A) that
assessee did not receive alleged show cause notice dt. 25.11.2008 issued by
AO before levy of penalty u/s. 221(1) of the Act, we consider it prudent to set
aside the impugned order of Ld. CIT(A) and restore the same to him to
decide appeal of the assessee afresh after giving due opportunity of hearing
to the parties.
7. Now we taken up appeal for assessment year 2008-09. In respect of
this assessment year, we observe that AO stated that show cause notice was
issued to assessee on 1st December, 2008 explaining as to why penalty u/s.
3 ITA Nos. 6327 & 6328/M/09
221(1) r.w.s. 140A(3) should not be imposed for default in payment of Self
assessment tax of Rs. 4,63,03,060/-. The AO has stated that keeping in view
the over all facts and circumstances, it is desirable to impose minimum
penalty of 25% on self assessment tax payable and accordingly levy penalty
of Rs. 1,15,75,765/-.
8. The assessee filed appeal before First appellate authority. The Ld.
CIT(A) for the reasons mentioned herein above, dismissed the appeal of the
9. During the course of hearing of appeal, Ld. AR submitted that notice
dt. 1st December, 2008 was dispatched by AO on 8.12.2008 fixing the date of
hearing on 10.12.2008. It is stated that the said notice was served on the
assessee company on 11.12.2008 i.e. after the date of hearing fixed by AO.
The Ld. Departmental Representative could not controvert the above
contention of Ld. AR.
10. We observe that Ld. CIT(A) while confirming the order of AO has not
discussed the above fact as contended by assessee before him, as is evident
from the statement of facts placed on record. Further we observe that
assessee also stated before Ld. CIT(A) in the statement of facts, there was
slow down in economy and the debtors of the company had not paid the
amount within stipulated time which restrained assessee company to pay self
assessment tax within the stipulated time. It was contended that there was a
sufficient and good reason for non-payment of self assessment tax within the
time. We observe that Ld. CIT(A) has not discussed the above fact in the
impugned order while confirming the action of AO. Therefore, we consider it
prudent to set aside the order of Ld. CIT(A) for assessment year 2008-09 and
restore the issue to him to decide the same afresh after considering
submissions of Ld. Representatives of the parties on merits.
4 ITA Nos. 6327 & 6328/M/09
11. In the result, both appeals of assessee for assessment years 2007-08
and 2008-09 are allowed for statistical purposes.
Order pronounced on this 06th day of July, 2012
(RAJENDRA) (B.R. MITTAL)
Accountant Member Judicial Member
Mumbai, Dated 6th July, 2012
Copy to :
1. The Appellant
2. The Respondent
3. The CIT-concerned
4. The CIT(A)-concerned
5. The DR `B' Bench
Asstt. Registrar, I.T.A.T, Mumbai