ITO, WARD-1(3), BHUBANESWAR vs. M/S. AEON MEDICAL PVT. LTD., BHUBANESWAR

1 ITA No. 251/CT K/ 2017 Asse ssment Year : 20 10- 201 1

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK

BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND PAVAN KUMAR GADALE, JUDICIAL MEMBER

ITA No.251/CTK/2017 Assessment Year : 2010-2011

Income Tax Officer Ward Vs. Aeon Medicals Pvt Ltd., 1(3), Aayakar Bhavan, 4th Plot No.121, Bhimpur, Near floor, Rajaswa Vihar, Aerodrum Main Gate, Bhubaneswar. Bhubaneswar. PAN/GIR No. (Appellant) .. ( Respondent)

Assessee by : Shri K.K.Bal, AR Revenue by : Shri D.K.Pradhan, DR

Date of Hearing : 30 /01/ 2018 Date of Pronouncement : 30 /01/ 2018

O R D E R Per Pavan Kumar Gadale, JM This is an appeal filed by the Revenue against the order of the

CIT(A)- 1, Bhubaneswar dated 25.4.2017 for the assessment year 2010-

2011.

“On the facts and in the circumstances of the case, the CIT(A) is not justified in law as well as on facts in deleting the penalty amount of Rs.47,07,450/- imposed by the AO in his order passed on 24.3.2015 u/s.140A(3) of the Income Tax At, 1961.”

income on 13.10.2010 for the assessment year 2010-2011 showing total

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income of Rs.1,40,69,580/-. The Assessing Officer observed that

although the tax payable including surcharge comes to Rs.47,82,251/-,

the assessee had paid only an amount of Rs.7,13,640/- and, thus, an

amount of Rs.47,07,447/- remained payable by the assessee. Therefore,

the Assessing Officer initiated penalty proceedings u/s.140A(3) of the Act

for the default committed by the assessee. After considering the

submissions of the assessee, the Assessing Officer imposed penalty of

Rs.47,07,447/- u/s. 140A(3) of the Act.

ground that although the assessee could not pay the tax due to financial

difficulty, but paid the tax immediately after the funds position improved.

to fulfil the statutory obligation to pay the admitted tax before filing of the

return, the Assessing Officer was justified in levying the penalty

u/s.140A(3) of the Act and the CIT(A) is not justified in deleting the

same.

authorities and materials available on record. The ld D.R.’s contention

that the CIT(A) has erred in deleting the penalty imposed u/s.140A(3) of

the Act without considering the fact that the assessee choses not to pay

the admitted tax irrespective of his business turnover. Whereas ld A.R.

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supported the order of the CIT(A) and submitted that the assessee has

complied the conditions of paying self-assessment tax alongwith interest

and the CIT(A) after considering the submissions and grounds has found

that there is serious financial difficulties faced by the assessee during the

relevant time and is supported by documents in the course of appellate

proceedings and the levy of penalty by the Assessing Officer under

presumption that the assessee has grossly wilfully neglected in not paying

the statutory tax cannot be sustained. The reasons for non-payment of

self-assessment tax was due to acute shortage of funds being faced by

the assessee company. Under the provisions of section 221 read with

section 140A(3) of the Act, it is stipulated that where the assessee has

defaulted for the payment of taxes, then, in addition to the tax arrears,

the assessee shall be subject to levy of penalty in this regard. However,

where the assessee proves to the satisfaction of the Assessing Officer that

the default was for good and sufficient reason, no penalty is leviable

under the said section. In the facts of the present case before us, we find

merit in the plea of the assessee that because of the circumstances

enumerated above, the assessee was not in a position to pay the said

taxes within time. However, the disputed tax of Rs.47,07,450/-, which is

the subject matter of penalty, has been deposited by the assessee. The

CIT(A) found that the assessee company has started its operations and

funds flow position has improved and the assessee also paid the admitted

tax as per the return of income, which could not be disputed and,

accordingly, we concur with the observations of the CIT(A) and incline to

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confirm the order of the CIT(A) and dismiss the ground of appeal of the

revenue.

Order pronounced on 30 /01/2018. Sd/- sd/- (N.S Saini) (Pavan Kumar Gadale) ACCOUNTANT MEMBER JUDICIALMEMBER Cuttack; Dated 30/01/2018 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Income Tax Officer Ward 1(3), Aayakar Bhavan, 4th floor, Rajaswa Vihar, Bhubaneswar 2. The Respondent. Aeon Medicals Pvt Ltd., Plot No.121, Bhimpur, Near Aerodrum Main Gate, Bhubaneswar 3. The CIT(A)-1, Bhubaneswar BY ORDER, 4. Pr.CIT-1, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. SR.PRIVATE SECRETARY //True Copy// ITAT, Cuttack