HI-TECH ESTATES AND PROMOTERS PRIVATE LIMITED,BHUBANESWAR vs. DCIT CIRCLE 1(2), BHUBANESWAR

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ITA 176/CTK/2024Status: DisposedITAT Cuttack01 August 2024AY 2015-164 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal accepted the assessee's explanation of reasonable cause for the delay in payment, considering the extreme financial hardship and the fact that the entire tax liability was cleared. Consequently, the penalty levied was cancelled.

What were the facts?

The assessee paid its tax liability of Rs. 1,15,15,340/- for AY 2015-16 after the stipulated time due to severe financial difficulties arising from the arrest of its directors and subsequent legal obligations. The entire tax liability, including interest, was eventually paid.

What were the issues?

Whether the penalty under Section 221(1) read with Section 140A(3) is leviable when the assessee demonstrates a reasonable cause for delayed payment of self-assessment tax.

Which sections of the Income-tax Act were involved?

Section 221(1),Section 140A(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,

Before: MANISH AGARWAL

For Appellant: Shri Abhishek Ojha, CA
For Respondent: Shri Sanjay Kumar, CIT, Shri Sanjay Kumar, CIT DR
Hearing: 01/08Pronounced: 01/0

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE BEFORE SHRI GEORGE MATHAN, JUDICIAL JUDICIAL MEMBER AND MANISH AGARWAL MANISH AGARWAL, ACCOUNTANT MEMBER , ACCOUNTANT MEMBER Assessment Year : 2015-16 Hi-tech tech Estates Estates and and Vs. DCIT, Circle DCIT, Circle-1(2) Promoters Promoters Pvt Pvt Ltd., Ltd., Plot Plot Bhubaneswar Bhubaneswar No.A/103, No.A/103, Saheed Saheed Nagar, Nagar, Bhubaneswar. Bhubaneswar. PAN/GIR No PAN/GIR No.AAACH 9591 G (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri Abhishek Ojha, CA Abhishek Ojha, CA Revenue by : Shri Sanjay Kumar, CIT Shri Sanjay Kumar, CIT DR Date of Hearing : 01/08 8/2024 Date of Pronouncement : 01/0 /08/2024 O R D E R Per Bench

This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the order of the ld CIT(A), NFAC, Delhi dated CIT(A), NFAC, Delhi dated 19.2.2024 against the confirmation of levy of 19.2.2024 against the confirmation of levy of penalty of Rs.1,15,15,340/ penalty of Rs.1,15,15,340/- u/s.221(1) r.w.s 140A(3) of the Income Tax u/s.221(1) r.w.s 140A(3) of the Income Tax Act, 1961 in Appeal No. in Appeal No.CIT(A), Bhubaneswar-1/10075/2018 1/10075/2018-19 for the assessment year assessment year 2015-16.

2.

Shri Abhishe Abhishek Ojha, ld AR appeared for the assessee and Shri the assessee and Shri Sanjay Kumar, ld CIT Kumar, ld CIT DR appeared for the revenue.

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3.

It was submitted by ld AR that the impugned assessment year is 2015-16 and the tax liability for the impugned assessment year was Rs.1,15,17,758/-. It was the submission that the assessee had paid Rs.20,00,000/- out of the said liability, admittedly within six months from the end of the year levying penalty u/s.221(1) r.w.s 140A(3) of the Act. Ld AR drew our attention to page 14 of the paper book, which were the details of the tax paid as under:

Details of tax paid Sl.No. Amount Challan No. BSR code Dt. Of deposit 1. 13,00,000 50194 0271852 2.10.2021 2. 15,00,000 50187 0271852 2.10.2021 3. 10,00,000 52788 0271852 6.10.2021 4. 10,00,000 52724 0271852 6.10.2021 5. 12,00,000 50373 0271852 18.10.2021 6. 12,00,000 50383 0271852 18.10.2021 7. 8,15,340 50387 0271852 18.10.2021 8. 15,00,000 51816 0271852 30.9.2016 9. 10,00,000 10465 0510075 29.2.2016 10. 5,00,000 10487 0510075 25.2.2016 11. 5,00,000 23719 0261632 20.2.2016 Total: 1,15,15,340

4.

It was the submission that the Directors of the assessee company had been arrested by the Economic Offence Wing (EOW) on account of certain complaints by the customers of the assessee. The arrest took place on 25.12.2012. It was the submission that the matter is still pending. The Directors of the assessee company got bail on the orders of the Hon’ble Supreme Court on 27.1.2014 after providing a bail bond of Rs.63 crores,

P a g e 2 | 4 which was also to be honoured by the payment of amount by the assessee to the Hon’ble Supreme Court. It was the submission that this amount was against the claim of the customers of the assessee company. It was the submission that the assessee company and its Director have gone through very hard times and it was on this account, payment of self assessment tax could not be made within the stipulated time. It was the prayer that the penalty levied u/s.221(1) r.w.s. 140A(3) of the Act may be deleted.

5.

In reply, ld CIT DR vehemently supported the penalty order and the order of the ld CIT(A). It was the submission that though it is true that the assessee has paid the tax liability, still the deterrent must be put into place so that this type of case should not be done in future and the assessee should be made an example for others.

6.

We have considered the rival submissions. The facts in the present case clearly shows that right from the assessment year 2012-13, the assessee has been in acute difficulty insofar as its Directors are in jail having been compelled to raise huge amount for the return/refund of the customers claim and it is also noticed that the assessee has also paid up the entire tax liability of Rs.1,15,15,340/- including interest levied u/s.234A, 234B and 234C, which has been paid during the pendency of the appeal before the ld CIT(A). A perusal of the chart of the payment of the tax liability also shows that the assessee has been following up and attempted to close his tax liability. The action of the assessee, in fact, support his P a g e 3 | 4 claim of being due diligent. This being so, as it is noticed that the assessee has completely paid the tax liability and as the assessee has shown valid reasons for its inability to pay tax liability within the stipulated time, we accept the reasonable cause as stated by the assessee and cancel the penalty levied u/s.221(1) r.w.s. 140A(3) of the Act as levied by the AO and confirmed by the ld CIT(A).

7.

In the result, appeal of the assessee stands allowed.

Order dictated and pronounced in the open court on 01/08/2024.

Sd/- sd/- (Manish Agarwal) (George Mathan) ACCOUNTANT MEMBER JUDICIAL MEMBER Cuttack; Dated 01/08/2024 B.K.Parida, SPS (OS) Copy of the Order forwarded to : 1. The Appellant : Hi-tech Estates and Promoters Pvt Ltd., Plot No.A/103, Saheed Nagar, Bhubaneswar 2. The Respondent: DCIT, Circle-1(2) Bhubaneswar 3. The CIT(A)- NFAC, Delhi 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, 6. Guard file. //True Copy// By order

Sr.Pvt.secretary ITAT, CUTTACK

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