DISTINCTIVE REALTY P.LTD,MUMBAI vs. ITO WD 1(1)(4), MUMBAI

This is an appeal filed by the assessee. The relevant assessment year is 2011-12. The appeal is directed against the order of the Commissioner (Appeals) – 1, Mumbai and arises out of order u/s 221(1) of the Income Tax Act 1961, (The ‘Act’).

There has been a delay of 43 days in filing the appeal by the assessee-company. The learned counsel of the assessee submits the relevant facts leading to the above delay and requests for its condonation. As the cause for delay in filing the appeal is genuine, we follow the decision in the case of Collector, Land Acquisitin vs. Mst. Katiji & Ors. (167 ITR 471); N. Balakrishnan vs. M. Ramamurthy [(1998) 7 (SC) 123] and condone the delay in filing the appeal.

The grounds of appeal filed by the assessee read as under:-

Briefly stated, the facts are that the assessee-company filed its return of income for the A.Y. 2011-12 on 30.09.2011. The Assessing Officer (AO) noticed that the assessee had not paid the self- assessment tax of Rs. 1,23,60,920/- before filing the return of income as required u/s 140A of the Act. The AO issued a notice u/s 221 r.w.s 140A(3) of the Act on 21.12.2011 which was duly served on the assessee on 23.12.2011 requesting to show-cause as to why a penalty u/s 221(1) should not be levied. He also issued a reminder on 17.01.2012 which was served on the assessee on 17.01.2012. As there was no compliance by the assessee, the AO decided the issue on merit and imposed a penalty of Rs. 24,72,184/- u/s 221(1) of the Act.

The assessee preferred an appeal against the order of the AO before the learned CIT(A). We find that the learned CIT(A) observed that throughout the submissions made by the assessee, financial hardship and liquidity crunch had been repeatedly claimed without bringing any evidence to support the same. Also there was non- compliance by the assessee to the show-cause notice issued by the AO. As the whole system of tax collection and administration is so designed that it is incumbent upon the assessee to pay self- assessment tax along with the filing of return of income and the assessee had delayed the payment of the same even after the issue of notice u/s 221 of the Act, the learned CIT(A) upheld the penalty imposed by the AO.

Before us, the learned counsel of the assessee submits that the during the F.Y. 2010-11 relevant to the A.Y. 2011-12, owing to financial hardship and liquidity crunch, the assessee was not able to make payment of the self-assessment tax determined at the time of filing its return of income u/s 139(1) of the Act. He referred to the balance sheet of the assessee company as at 31.03.2011 (P. 76 of the P/B) and schedule ‘’D’’ (P. 79 of the P/B). It is further stated by him that the self-assessment tax of Rs. 10,00,000/- was paid on 23.02.2012 and Rs. 1,20,28,785/- on 30.03.2012.

We have heard the rival submissions and perused the relevant material on record. It is found that there was no compliance by the assessee to the notice u/s 221 r.w.s 140A(3) served on the assessee on 23.12.2011 and also to the reminder thereof served on 17.01.2012. The same has been mentioned by the learned CIT(A) at para 3.4 of her appellate order dated 23.11.2011.The learned counsel of the assessee could not clarify the reasons for non-compliance before the AO during the course of appellate proceedings before us. In the interest of justice, taking into account the conspectus of facts, we set aside the order of the learned CIT(A) and restore the matter to the file of the AO to make a fresh order as per the provisions of the Act after giving reasonable opportunity of being heard to the assessee. The assessee is also directed to appear before the AO and file the relevant details.

In the result, the appeal is allowed for statistical purpose.