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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM
This appeal is filed by G.M. Fabrics Private Limited (Assessee/ Appellant) against the order passed by the Commissioner of Income tax (Appeals)-16, Mumbai [The LD CIT (A)] on 31 January 2020. By this order penalty levied under Section 221(1) of the Income-tax Act, 1961 (The Act) by the order dated 14th May, 2018 passed by the Dy. Commissioner of
Assessee has raised following grounds of appeal:-
“1. BECAUSE, the ld. CIT (A) has erred in law and on facts while upholding the penalty of Rs. 1, 84, 60,000/- u/s 221(1) of the Act on alleged default in payment of self-assessment tax.
2. BECAUSE, the ld. CIT(A) has erred in law and on facts in failing to appreciate that the appellant was not an 'assessee in default' u/s 140A so as to be liable for impugned penalty.
3. BECAUSE, the ld. CIT(A) has erred in law in failing to consider that even an "assessee in default u/s 140A was not liable to penalty u/s 221 after the amendment w.e.f. 01.04.1989.
BECAUSE, the ld. CIT(A) has erred in law in failing to consider that the issue stood covered in appellant's favour by order of jurisdictional ITAT.
5. BECAUSE, the ld. CIT(A) has erred in law in failing to adjudicate the erroneous calculation of interest u/s 234B amounting to Rs. 71,28,911/-.”
Brief fact of the case shows that assessee is a private limited company engaged in the business of manufacturing of textiles. It filed its return of income on 17th October, 2016, declaring income of ₹24,79,36,350/-. Total tax Liability was computed at Rs 85805812/-, MAT credit was claimed at Rs 49558162/- , total advance tax paid was shown at Rs 37051371 and refund due was claimed at Rs 803721/-.
Assessee did not remove the defect and therefore, the return was declared as invalid on 8 July 2017.
The assessee after consultation found that the credit of MAT claimed was not correctly computed and therefore revise return was to be filed.
On 19/01/2018, assessee filed return under Section 139(4) of the Act at the same total income, however, claimed MAT credit of ₹1,18,34,786/- and balance tax liability was worked out at ₹7,39,71,026/-. Thus, the additional tax liability of ₹3,69,29,000/- was paid on 5th July, 2017 of ₹2,70,00,000/- and on 15th December, 2017, ₹99,20,000/-.
However, on 23rd March, 2018, the learned Assessing Officer 08. issued notice under Section 221 read with section 140A of the Act, asking the assessee as to why the penalty should not be levied for default of non-payment of taxes on due date.
On 24.04.2018, assessee submitted that there is no default as the self-assessment tax as determined in the return of income under Section 139(4) of the Act has been paid.
The learned Assessing Officer rejected the contention of the assessee and on 14 May 2018 passed an order under Section 221(1) of the Act. The learned Assessing Officer held that
Assessee aggrieved with that order preferred an appeal before the learned CIT (A), who confirmed the same by order dated 31 January 2020 and therefore, assessee is in appeal before us.
The learned Departmental Representative supported the orders of the lower authorities. He submitted that originally the assessee has filed return of income claiming wrong minimum alternative tax credit, wherein it was found by the Department that such credit is erroneous, and certain columns were not filled, the notice was given to it as defective return. Assessee did not comply with the same. Subsequently assessee filed different return u/s 139 (4) of the act. It did not pay tax due in the original return. Several notices were issued to the assessee pointing out the defect in return. It was not cured, therefore penalty was levied. He specifically referred to the order of the learned AO where several judicial precedents are considered. Accordingly, he submitted that there is no infirmity in the orders of the lower authorities.
We have carefully considered the rival contention and perused the orders of the lower authorities. The facts show that assessee filed original return of income on 17/10/2016. As per that return admittedly assessee claimed incorrect mat credit. In the return, assessee did not completely fill up particular schedules. Therefore, on 13/2/2017 at the time of processing the return filed by the assessee was found to be defective/incomplete. Assessee was given first reminder on 6/3/2017 to cure the defect and subsequent reminder on 4/4/2017. However, both this reminders to rectify the defect were not responded to by the assessee. Subsequently on 8/7/ 2017, this income tax return was invalidated by filing portal.
“Return of income filed on 17/10/2016 the tax liability was shown at ₹ 36,247,650/– which was incorrect. Thereupon return was revised on 19/1/2018 without any change in the total income however total tax and interest calculated at ₹ 73,971,026/–.”
We first find that assertion of the learned assessing officer that the return was revised on 19/1/2018 is a revised return is devoid of any merit. This is so because in the acknowledgement of return filed in 19/1/2018
Accordingly we find that the penalty levied by the learned assessing officer as per order dated 14/05/2018 u/s 221 (1) of the income tax act of ₹ 1,84,60,000/– is not
No arguments were advanced on Ground no 5 , hence dismissed.
Appeal is partly allowed.
Order pronounced in the open court on 07.07.2022.