Kamalyam Shankarnarayan v. ITO, Ward-8(4), Pune
[Citation -2016-LL-0923-18]

Citation 2016-LL-0923-18
Appellant Name Kamalyam Shankarnarayan
Respondent Name ITO, Ward-8(4), Pune
Court ITAT-Pune
Relevant Act Income-tax
Date of Order 23/09/2016
Assessment Year 2012-13
Judgment View Judgment
Keyword Tags opportunity of being heard • statutory liability • payment of tax • plant
Bot Summary: The assessee filed his return of income on 29-09- 2012 declaring total income of Rs.48,65,420 - and further disclosing liability towards self assessment tax at Rs.10,58,320 - for the impugned assessment year. Before CIT(A) the assessee submitted that the amount of penalty cannot exceed the amount of tax in arrear, i.e. Rs.9,30,341 -. The assessee's contention that there was sufficient cause for not discharging the liability of self assessment tax is not accepted. The assessee's third contention with regard to amendment of section 139, it is hold that the assessee does not find any support from amendment introduced through Finance Act, 2013 by inserting clause in explanation to section 139(9) as it has been not amended retrospectively. The section 220(1) states that when an assessee is in default or is deemed to be in default in making a payment of tax, he shall, in addition to the amount of the arrears and the amount of interest payable under sub-section of section 220, be liable, by way of penalty, to pay such amount as the Assessing Officer may direct, and in the case of a continuing default, such further amount or amounts as the Assessing Officer may, from time to time, direct, so that the total amount of penalty does not exceed the amount of tax in arrears. Without considering the facts and circumstances of the case and the law obtaining and the financial difficulty faced by the assessee the AO has erred in levying the penalty u s.221(1) of the Act and the Ld.CIT(A)-9, Pune has erred in not deleting the entire penalty. The penalty of Rs.9,30,341 - u s.221(1) of the Income Tax Act imposed on the assessee is bad in law.


IN INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE, BEFORE SHRI R.K. PANDA, AM . ITA No.1037 PN 2016 Assessment Year : 2012-13 Shri Kamalyam hankarnarayan, . AP. CTS No.6297, Flat No.03, Appellant Opp. Mayur Classic, Pimpri, Pune 411018 PAN : ABZPS0783L v s ITO, Ward-8(4), Pune . Respondent Appellant by : None Respondent by : Smt. Sumitra Banerji Date of Hearing :21.09.2016 Date of Pronouncement:23.09.2016 ORDER PER R.K.PANDA, AM : This appeal filed by assessee is directed against order dated 15-02-2016 of CIT(A)-9, Pune relating to Assessment Year 2012-13. 2. This appeal was first fixed for hearing on 23-08-2016. notice was duly served on assessee. Since none appeared on that date, case was adjourned to 21-09-2016, by issue of fresh notice through RPAD. notice was duly served and acknowledgement is placed on record. However, when name of assessee was called none appeared on behalf of assessee nor any adjournment application seeking adjournment of case is filed. Therefore, this appeal is being decided on basis of material available on record and after hearing Ld. Departmental Representative. 2 ITA No.1037 PN 2016 3. Facts of case, in brief, are that assessee is proprietor of M s. Crossword Industries engaged in business of plant erection and fabrication. assessee filed his return of income on 29-09- 2012 declaring total income of Rs.48,65,420 - and further disclosing liability towards self assessment tax at Rs.10,58,320 - for impugned assessment year. AO issued notice u s.221(1) rw.s. 140A(3) of I.T. Act on 26-12-2012. After allowing assessee opportunity of being heard AO passed order u s.221(1) levying penalty of Rs.10,58,320 - vide order dated 13-03-2013. 4. Before CIT(A) assessee submitted that amount of penalty cannot exceed amount of tax in arrear, i.e. Rs.9,30,341 -. It was submitted that assessee was in severe financial difficulty for making payment of self assessment tax and there was no intention of avoiding liability for payment of tax. It was accordingly submitted that there was reasonable cause for which assessee could not discharge his liability. Therefore, penalty should be deleted. amendment made by Finance Act, 2013 to provisions of section 139(9) was also brought to notice of CIT(A). 5. However, Ld.CIT(A) was not fully satisfied with explanation given by assessee. He however directed AO to restrict penalty equivalent to amount of tax in arrear, i.e. Rs.9,30,341 - by observing as under : I have considered carefully facts of case and above contentions made through its submissions. As regard second contention of appellant that there was reasonable cause for not discharging statutory liability, I have consider facts of case. I have gone through bank statements of assessee for relevant period and found that though assessee had been raising funds through bank limit for running its business but argument that it was always facing shortage of fund and did not have fund even to discharge his liability against self assessment tax of Rs. 10 lakhs approximately is not only unacceptable but unbelievable. It 3 ITA No.1037 PN 2016 is seen that assessee had lot of fund inflow during relevant period out of which it could have discharged tax liability under question at time of filing return or at time of show cause notice issued by A.O. Moreover, payment of taxes on specified dates are statutory liability and there was no reason to not complied with same. Therefore, assessee's contention that there was sufficient cause for not discharging liability of self assessment tax is not accepted. assessee's third contention with regard to amendment of section 139, it is hold that assessee does not find any support from amendment introduced through Finance Act, 2013 by inserting clause (aa) in explanation to section 139(9) as it has been not amended retrospectively. In first contention of appellant it has contended that penalty cannot exceed amount of tax. section 220(1) states that when assessee is in default or is deemed to be in default in making payment of tax, he shall, in addition to amount of arrears and amount of interest payable under sub-section (2) of section 220, be liable, by way of penalty, to pay such amount as Assessing Officer may direct, and in case of continuing default, such further amount or amounts as Assessing Officer may, from time to time, direct, so, however, that total amount of penalty does not exceed amount of tax in arrears. Definition of 'income tax' under section 2(43) provides that "tax" in relation to assessment year commencing on 1st day of April, 1965, and any subsequent assessment year means income-tax chargeable under provisions of this Act. In this regard appellant relied on certain case laws as mentioned in its reply. Considering legal position laid down through various case laws as relied on by appellant contention seems to justified. Therefore, A.O. is directed to restrict amount of penalty equivalent to amount of tax in arrear i.e. Rs.9,30,341 -. Thus, appeal on this ground is partly allowed. 6. Aggrieved with such order of CIT(A) assessee is in appeal before Tribunal with following grounds : following grounds are taken without prejudice to each other. On facts and circumstances of case and in law. 1. Without considering facts and circumstances of case Ld.AO has erred in levying penalty u s.221(1) of Act and CIT(A)-9, Pune has erred in retaining penalty to extent of Rs.9,30,341 -. 2. Without considering facts and circumstances of case and law obtaining and financial difficulty faced by assessee AO has erred in levying penalty u s.221(1) of Act and Ld.CIT(A)-9, Pune has erred in not deleting entire penalty. 3. penalty of Rs.9,30,341 - u s.221(1) of Income Tax Act imposed on assessee is bad in law. 4. appellant craves leave to add, amend or alter any of grounds of appeal. 4 ITA No.1037 PN 2016 7. I have considered arguments of Ld. Departmental Representative and perused orders of AO and CIT(A). It is admitted fact that assessee while filing return of income has not paid self assessment tax due. AO, therefore, levied penalty of Rs.10,58,320 - u s.221(1) of I.T. Act. I find in appeal Ld.CIT(A) restricted penalty to Rs.9,30,341 - being equivalent amount of tax in arrear, i.e. Rs.9,30,341 -. detailed reasoning given by Ld.CIT(A) has already been reproduced in preceding paragraph. I find order of CIT(A) in instant case is in accordance with law since assessee has failed to pay admitted self assessment tax. In absence of any contrary material brought to my notice against order of CIT(A) same being in order cannot be disturbed. I, therefore, uphold order of CIT(A) and grounds raised by assessee are dismissed. 8. In result, appeal filed by assessee is dismissed. Order pronounced in open court on 23-09-2016. Sd - (R.K. PANDA) ACCOUNTANT MEMBER Pune; Dated : 23rd September, 2016.Copy of Order forwarded to : 1. Appellant 2. Respondent 3. CIT(A)-9, Pune 4. CIT-9, Pune 5. , SMC Bench DR, ITAT, SMC Bench Pune; 6. 2 Guard file. BY ORDER, True Cop True Copy Sr. Private Secretary , ITAT, Pune Kamalyam Shankarnarayan v. ITO, Ward-8(4), Pune
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