INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "C": NEW DELHI
BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER
AND
SHRI O.P. KANT, ACCOUNTANT MEMBER
ITA No.4788/Del/2014
Asstt. Year: 2011-12
Valley Iron & Steel Co. Ltd., ACIT,
Exchange Store Building, Central Circle 5
Sham Nath Marg, Civil Lines, Vs. Jhandewalan,
New Delhi. New Delhi.
(Appellant) (Respondent)
Assessee by: Shri Raj Kumar Gupta, Advocate
Shri Sumit Goel, CA
Department by : Shri Kumar Hrishikesh, CIT(DR)
Date of Hearing 08/05/2019
Date of 20/05/2019
pronouncement
ORDER
PER O.P. KANT, A.M.
This appeal by the assessee is directed against order dated
31/07/2014 passed by the Ld. Commissioner of Income-tax (Appeals)-
XXXI, New Delhi [in short the Ld. CIT(A)] for assessment year 2011-12
in relation to penalty levied by the Assessing Officer for non-payment
of self-assessment tax. The grounds of appeal are reproduced as
under:
I A. "That under the facts and circumstances. the Ld. CIT (A)
erred in law as well as on merits, in assuming that there is
delay in filing the appeal and further erred in not condoning
the alleged delay and in dismissing the appeal.
B. That as per finding of Hon'ble ITAT in Para - 8 of order dated
14.03.2014 after treating the date of remittance of self -
astt. tax as the date of' removal of defect in filing the appeal.
There is no question for any delay in filing the appeal when
un - disputedly the appeal was filed within the prescribed
period or 30 day from the date of' service of relevant order.
2A. That without prejudice, to G.N. I. under the facts and
circumstances. Ld. C1T (A) erred in law as well as on merits
in not condoning the delay in filing the appeal. If any.
B. That under the facts and circumstances. there existed a
reasonable cause and justifiable reasons for not depositing
the self' - asstt. Tax within the time prescribed u/s 249 (4).
hence. the Ld. CIT (A) erred in holding that the assessee
failed in proving that there was a serious financial crunch
for postponing the payment of tax liability.
3. That under the facts and circumstances levy of penalty, of
Rs. 6,42.85,283/- u/s. 140 A (3) is absolutely un-
sustainable in law as well as on merits
4. That without prejudice. no penalty can be levied for default
of' payment of' interest therefore, the penalty to the extent or
Rs. 63.96,689/ - is contrary to law.
5. That without prejudice the penalty calculated @ 100% is
without any basis so far as rate of 100% is converned. At
any rate, it highly highly excessive."
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2. Briefly stated facts of the case are that the assessee filed return
of income for the year under consideration on 24/11/2011 declaring
nil income under the regular provisions of the Income Tax Act, 1961
(in short `the Act') but declared income under Minimum Alternative
Tax (MAT) provisions u/s 115JB of the Act amounting to Rs. 29,38,05,
621/-and computed tax liability of Rs. 6,49,53,619/-payable u/s
140A(1) of the Act including interest u/s 234B and 234C of the Act.
The assessee did not make payment of the admitted tax liability u/s
140A of the Act and filed return of income showing tax amount
payable of Rs. 6,42,85,283/-. In view of non-payment of self-
assessment tax, the Assessing Officer issued show cause notice to the
assessee as why the penalty u/s 140A(3) may not be levied. After
repeated adjournment and non-compliance, the assessee filed written
submission. The Ld. Assessing Officer after considering written
submission of the assessee held that the assessee failed to establish
any reasonable cause for non-payment of admitted tax liability and
accordingly levied penalty equivalent to 100% of the self-assessment
tax amounting to Rs. 6,42,85,283/- in order dated 27/04/2012 u/s
140A(3) of the Act.
3. Against the said penalty, the assessee filed appeal before the Ld.
CIT(A) on 07/05/2012, who dismissed the appeal vide order dated
22/01/2013 as unadmitted and non-est in view of provisions of
section 249(4) of the Act, which prescribe that no appeal be admitted
by the Ld. CIT(A) if the tax due on the returned income has not been
paid at the time of filing of the appeal.
4. On further appeal by the assessee, the Income Tax Appellate
Tribunal ( in short `the Tribunal' ) vide order dated 14/03/2014 in ITA
No. 940/Del/2013, set aside the order of the Ld. CIT(A) and directed
as under:
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"7. We have heard the rival submissions and perused the
records and the case laws cited by the parties. As per the version
of the assessee, it has remitted the self assessed tax, therefore
the Id CIT(A) may admit and adjudicate the appeal on merits In
Shamraj Moorjani Vs. Dy. CIT(Hyd) reported in (2005) 93 TTJ
(Hyd) 927, af1er referring to CIT Vs. Filmistan Ltd. 42 ITR 163
(SC); Anil Singhi Vs. AClT (2003) 85 ITD 73 (Del) SB Mela Ram &
Sons Vs. CIT 29 ITR607 (SC) in which one of us was party in
Hyderabad 'B' Bench has held that:-
"30 In the light of the decisions cited above, the judicial view
appears to be that the appeals before the CIT(A) should be
considered as having been properly filed on the date of
payment of admitted taxes on returned income, though the
memorandum of appeal was presented within the time and
all that remains for consideration before the CIT(A) is
whether the delay can be condoned or not. "
8. In the light of the said decision, we ore of the considered
opinion that the date of remittance of self assessed Tax by the
assessee as the date of removal of defect in filing the appeal and
if any delay happened, it need to be explained by the assessee
and if the Id CIT(A) is satisfied with the explanation may condone
the delay and adjudicate the appeal on merits."
5. In second round of proceedings, the Ld. CIT(A) rejected the
request of the assessee for condonation of the delay and dismissed
the appeal observing as under:
"4.1 Hon. ITAT has vide its order dated 14.03.2014 has directed
to treat the date of remittance of S.A. tax as the date of filing of
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appeal and if any delay happened the same needs to be
explained by the assessee and that if CIT (A) is satisfied with the
explanation he may condone the delay and adjudicate, the appeal
on merits. In the written submissions filed on 25.07.2014, the
appellant has stated that the appeal was filed on 07.05.2012
which is within time taking into account the date of service of
order by the AO being 24.07.2012. It has been further stated that,
if there was any delay, in any manner whatsoever, the same may
be condoned. Assessee has given certain reasons for delay in
depositing SA tax, is the financial difficultiese being faced by the
appellant. The AR has relied upon the order of the undersigned
dated 22.1.2013 wherein the penalty levied by the AO u/s 140A
(3)/221 was reduced to Rs. 10 lacs on the ground that there were
financial difficulties for delay in payment of self-assessment tax.
For the present appeal also, the AR' has made very general
submission about financial difficulties by citing letters from the
banks requesting the assessee to acquire the outstanding loans
etc.
4.2. I note here that the assesee seems to have made it a habit not
to honour its statutory obligation of payment of tax at the time fo
filing the return of income. It is observed that the appellant has,
however, been carrying on with its business with sizeable
turnover running into hundreds of crores. Discharge of tax liability
appears to be their last priority as observed from this conduct. In
these circumstances, I do not agree that assessee could give
priority to its business and not to its statutory responsibility of
discharging the tax liability. In view of this I am of the view that
repeated defaults in payment of self-assessment tax resulting in
delay in filing of appeal cannot be taken lightly.
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4.3. There are no facts to show that the appellant did not have the
capacity to make the payment of self-assessment tax of just Rs.
6.42 crores when the turnover of the assessee was more than Rs.
400 crores. The appellant company is a closely held company. The
assesse has not been able to establish with facts and figures and
with daily cash balances of the appellant and its group concerns
that there was such a serious financial crunch that it had to
postpone the discharge of tax liability again and again. Therefore,
I hold that the assessee has not been able to make out a case for
condonation of delay in filing the appeal. Hence, the assesee's
request for condonation of delay is hereby rejected and to that
extent the appeal is dismissed for statistical purposes."
6. Aggrieved with the above finding of the Ld. CIT(A), the assessee
is in appeal before the Tribunal raising the grounds as reproduced
above.
7. Before us, the Ld. Counsel of the assessee filed a paper book
containing pages 1 to 65 and submitted that there was no delay at all
in filing the appeal. He submitted that the order dated 27/04/2012
passed by the Assessing Officer levying penalty u/s 140A(3) of the Act
was received by the assessee on 30/04/2012 and appeal was filed
before the Ld. CIT(A) on 7/05/2012, thus it is within the prescribed
period of 30 days from the date of the receipt of the order of the
Assessing Officer. The ld. Counsel referred to Page 22 -24 of the paper
book and submitted that the Tribunal directed to treat the date of the
deposit of self-assessment tax as the date of removal of defect and
then if any delay is found, it was to be explained. The Ld. Counsel
submitted that entire self-assessment tax along with interest u/s
234B amounting to Rs. 6,42,85,283/-has been deposited by the
assessee on 28/03/2014. A date wise chart of payment has been
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reproduced by the Ld. CIT(A) on page 4 of the impugned order.
According to the Ld. Counsel that on depositing self-assessment tax,
the defect stood removed in the appeal already filed and therefore
delay was to be calculated only with respect to the date of receipt of
the penalty order of the Assessing Officer and the time taken in filing
the appeal before the Ld. CIT(A). He submitted that the Ld. CIT(A)
wrongly took the date of deposit of self-assessment tax as the date of
filing of the appeal whereas the date of self-assessment tax payment
was to be treated as the date of removal of defect in the appeal as
originally filed. According to the Ld. Counsel, after the removal of the
defect the Ld. CIT(A) was required to decide the appeal on merits as
per the direction of the Tribunal (supra).
8. The Ld. Counsel referred to pages 7 to 19 of the paper book and
submitted that the fact of financial difficulty in making the self-
assessment tax was evident in view of the various letters issued by the
banks regarding overdue interest payment and commitment charges
against letter of credit. He submitted that the Ld. CIT(A) ignored those
evidences supporting the financial difficulty faced by the assessee.
9. On the contrary, the Ld. DR submitted that in the immediately
preceding assessment year also the Assessing Officer levied the
penalty for non-payment of self-assessment tax and thus the assessee
is a habitual defaulter in making self-assessment tax payment without
justified reasons.
10. We have heard the rival submissions and perused the relevant
material on record. In the case, the assessee has paid the admitted
self-assessment tax liability on various dates as under:
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On 23.03.2012 (As per Form 26AS) 75,00,000/-
On 05.03.2012 (--- do ----) 75,00,000/-
On 16.02.2012 (--- do ----) 75,00,000/-
On 29.09.2011 (--- do ----) 1,25,00,000/-
On 23.09.2011 (--- do ----) 1,00,00,000/-
On 25.02.2014 (--- do ----) 20,00,000/-
On 28.02.2014 (--- do ----) 20,00,0001-
On 04.03.2014 (--- do ----) 19,48,906/-
On 28.03.2014 (--- do ----). 1,33,36,377/- 6,42,85,283/-
11. The Tribunal in order dated 14.3.2014 has noted that the
assesee has remitted all the pending self assessment tax and
accordingly the order of the Ld. CIT(A) was set aside. But we find that
the assessee misrepresented the facts before the Tribunal. It is evident
from above chart that on 14/03/2014, i.e. the date of order of the
Tribunal, the self-assessment tax liability of Rs. 1,33,36,377/-was
pending and entire self-assessment tax liability has been paid finally
on 28/03/2014.
12. The assessee filed appeal before the Ld. CIT(A) on 07/05/2012
and which is within the prescribed period of 30 days of filing of the
appeal after receipt of the order of the Assessing Officer. On perusal of
the order of Tribunal(supra) , we find that the Tribunal directed to
treat the date of remittance of self-assessment tax paid by the
assessee as the date of removal of the defect in filing the appeal and
condone the delay if satisfied and adjudicate the appeal on merits.
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13. But in second round of proceeding , the Ld. CIT(A) treated the
date of payment of the self-assessment tax as the date of filing appeal
before the Ld. CIT(A) and thus according to him, the appeal was filed
after a delay of the substantial period . The Ld. CIT(A) accordingly
examined the issue of condonation of the delay and found that the
assessee failed to produce daily cash balances details of assessee and
its group concern. In view of the Ld. CIT(A) , the assessee failed to
support its claim of serious financial crunch as the main reason of
non-payment of' admitted tax liability and delay in filing appeal.
14. In our opinion , the Ld. CIT(A) failed to notice that the appeal
was filed originally within the prescribed period of 30 days from the
receipt of the order of Assessing Officer. Once the defect of remittance
of self-assessment tax stands removed , the Ld. CIT(A) was required to
adjudicate the appeal on merits as directed by the Tribunal (supra). In
our view, the action of the Ld. CIT(A) is not in accordance with the
direction of the Tribunal(supra). In view of the above facts and in the
interest of justice, we set aside the order of the Ld. CIT(A) and restore
the appeal to the Ld. CIT(A) for adjudicating on merit in accordance
with law. The grounds raised by the assessee are allowed for statistical
purposes.
15. In the result, the appeal of the assessee allowed for statistical
purposes.
This decision was pronounced in the Open Court on 20th May,
2019.
Sd/- sd/-
(BHAVNESH SAINI) (O.P. KANT)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 20/05/2019
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Veena
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
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