M/S Prarthana Const P Ltd, Ahmedabad v. The Dycit Sr-1, Ahmedabad

ITA 2235/AHD/2002 | 1997-1998
Pronouncement Date: 22-02-2010 | Result: Allowed

Appeal Details

RSA Number 223520514 RSA 2002
Assessee PAN SEEIN1998A
Bench Ahmedabad
Appeal Number ITA 2235/AHD/2002
Duration Of Justice 7 year(s) 7 month(s) 26 day(s)
Appellant M/S Prarthana Const P Ltd, Ahmedabad
Respondent The Dycit Sr-1, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 22-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 27-06-2007
Date Of Final Hearing 17-02-2010
Next Hearing Date 17-02-2010
Assessment Year 1997-1998
Appeal Filed On 26-06-2002
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE S/SHRI T.K. SHARMA JM AND D.C.AGRAWAL AM PRARTHANA CONSTRUCTION (P) LTD. 10 PRITAMNAGAR ELLISBRIDGE AHMEDABAD. V/S . JT. CIT (SR) 1 AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI MEHUL K. PATEL AR RESPONDENT BY:- SMT. NEETA SHAH SR.DR O R D E R PER D.C.AGRAWAL ACCOUNTANT MEMBER . THESE ARE APPEALS FILED BY THE ASSESSEE FOR ASST. YEAR 1996-97 & 1997-98 AGAINST CONFIRMATION OF LEVY OF PENALTY UND ER SECTION 140A(3) R.W.S. 221 AND ALSO AGAINST DISMISSING THE APPEALS BY LD. CIT(A) ON THE GROUND THAT TAXES AS PER RETURNS HAVE NOT BEEN PAID . ITA NO.2234/AHD/2002 ASST. YEAR 1996-97 : 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A COM PANY CARRYING ON BUSINESS OF DEVELOPMENT OF RESIDENTIAL AND COMMERCI AL PREMISES DURING THE YEAR UNDER CONSIDERATION. RETURN OF INCOME WAS FILED ON 7.4.1997 ON AN INCOME OF RS.1 20 19 826/- AND THE ASSESSMENT WA S ALSO MADE AT THE SAME INCOME UNDER SECTION 143(1) ON 12.2.1998. THE AO NOTICED THAT TAXES AS PER RETURN OF INCOME WERE NOT PAID. HE TRE ATED THIS NON-PAYMENT ITA NOS.2234 TO 2236/AHD/2002 ASST. YEARS : 1996-97 & 1997-98 2 AS DEFAULT UNDER SECTION 140A(3) AND ACCORDINGLY IN ITIATED PENALTY PROCEEDINGS UNDER THAT SECTION READ WITH SECTION 22 1(1). A NOTICE FOR EXPLANATION OF THE ASSESSEE WAS ISSUED ON 19.6.1998 AND FURTHER NOTICE WAS ALSO ISSUED ON 4.8.1999. IT SEEMS THAT ASSESSEE DID NOT FURNISH ANY EXPLANATION IN RESPONSE TO THESE NOTICES. THE AO AC CORDINGLY PROCEEDED TO LEVY THE PENALTY UNDER THAT SECTION. HE NOTICED THAT AS PER BALANCE SHEET THERE WAS A CASH AND BANK BALANCE OF RS.38 31 716/- AS ON 31.3.1996. EVEN THEN ASSESSEE DID NOT MAKE THE PAYMENT OF TAXE S. HE WORKED OUT THE MAXIMUM PENALTY LEVIABLE AT RS.58 87 484/- BUT HE L EVIED THE PENALTY AT RS.30 LACS. 3. THE MATTER CAME UP BEFORE LD. CIT(A) WHO DISMISS ED THE APPEAL BY OBSERVING AS UNDER :- BEFORE ME. SHRI PRERAK C.A. AND AUTHORISED REPRES ENTATIVE OF THE APPELLANT COMPANY HAS FILED WRITTEN SUBMISSIONS AND THE DETAILS. HE HAS CONTENDED THAT THE TAX U/S.140A REMAINED UNPAID ON THE DATE OF FILING OF RETURN DUE TO FINANCIAL CRISIS HE CONTENDED THAT IN THE IMMEDIATELY PRECEDING YEAR THERE WAS HUGE LOSS OF ABOVE RS 1 CR ORE. HE CONTENDED THAT THE APPELLANT COMPANY HAS PAID A SUM OF RS.21 08 959/- TOWARDS I40A TAX BEFORE PASSING OF THE PENALTY ORDER. HE AL SO CONTENDED THAT THE AO HAS LEVIED PENALTY ON THE ORIGINALLY OUTSTANDING AMOUNT. HE REQUESTED THAT THE PENALTY THEREFORE. PRIMARILY DE SERVES TO BE REDUCED TO THAT EXTENT. HE HAS ALSO FILED BEFORE ME THE XEROX COPIES OF SELF- ASSESSMENT TAX CHALLANS. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE SUB MISSIONS OF THE LEARNED COUNSEL CAREFULLY. IT IS CRYSTAL CLEAR AS PER SECTI ON I40A(1) THE ASSESSEE WAS LIABLE TO PAY TAX U/S I40A OF RS 58 897 484/- B EFORE FILING THE RETURN OF INCOME. IT IS SEEN FROM THE ORDER THAT THE APPEL LANT COMPANY HAVING BANK BALANCE OF RS.38 31 716/- AS ON 31.3.1996 FOR UTILIZATION TOWARDS PAYMENT OF TAX BUT IT HAS NOT DONE SO. THEREFORE A PPELLANTS BASIC ARGUMENT OF FINANCIAL HARDSHIP LACKS IN MERIT. THER EFORE ON THE FACTS AND CIRCUMSTANCES OF THE CASE I SEE NO JUSTIFICATION F OR INTERFERING WITH THE PENALTY IMPOSED BY THE A.O. THE PENALTY OF RS.30 00 000/- IS THEREFORE CONFIRMED. 3 4. BEFORE US LD. AR FOR THE ASSESSEE SUBMITTED THA T IT IS INCORRECT TO SAY THE FINANCIAL POSITION WAS SO AS ON 31.3.1996.T HE RETURN OF INCOME WAS IN FACT FILED ON 7.4.1997 AND AT THAT TIME ASSE SSEE DID NOT HAVE ADEQUATE FUNDS AVAILABLE. THE POSITION OF FUNDS IN DIFFERENT BANKS AND CASH IN HAND WAS AS UNDER :- CASH ON HAND RS.40 140/ - BANK OF BARODA C/A NO.8662 RS.32 646/- BHAGYODAYA CO-OP. BANK C/A NO.1345 RS. 15 504/- VIJAYA BANK-MUMBAI BR.C/A NO.804 RS.1 47 009/- TOTAL BALANCE RS.2 35 299/- IN VIEW OF THIS ASSESSEE HAD A REASONABLE CAUSE IN NOT BEING ABLE TO MAKE THE PAYMENT OF TAXES ALONG WITH FILING OF RETURN. T HE LD. AR THEN SUBMITTED THAT LEVY OF PENALTY TO THE EXTENT CONFIR MED BY LD. CIT(A) IS HARSH AND IS NOT COMPATIBLE WITH THE FINANCIAL COND ITION OF ASSESSEE WHICH HAS GONE FROM BAD TO WORSE. HE REFERRED TO THE COPY OF BANK ACCOUNT SUBMITTED IN THE PAPER BOOK SHOWING THAT ASSESSEE D ID NOT HAVE ADEQUATE BALANCE. HE SUBMITTED THAT PENALTY LEVIABLE FOR DEF AULT UNDER SECTION 140A(3) IS PRIMARILY OF COMPENSATING THE REVENUE FO R WITHHOLDING GOVERNMENT DUES. THEREFORE PENALTY FOR DEFAULT SHO ULD NOT BE MORE THAN THE INTEREST CHARGEABLE UNDER THE INCOME-TAX ACT FO R DELAYED PAYMENT OF TAXES. IN THIS REGARD HE REFERRED TO SECTIONS 215 216 & 217 WHEREIN INTEREST CHARGEABLE IS ONLY 15% PER ANNUM. HE FURTH ER SUBMITTED THAT PERIOD OF DEFAULT SHOULD BE LIMITED TO THE DATE OF RAISING REGULAR DEMAND BECAUSE THEREAFTER SELF-ASSESSMENT TAX MERGED INTO THE REGULAR DEMAND AND FOR NON-PAYMENT OF SUCH REGULAR DEMAND SEPARATE INTEREST AND PENALTY IS PROVIDED. THERE CANNOT BE LEVY OF DOUBLE PENALTY FOR THE SAME DEFAULT ONE FOR DEFAULT IN MAKING PAYMENT OF SELF ASSESSMEN T TAX AND OTHER FOR NON-PAYMENT REGULAR DEMAND OF BOTH COMPRISED OF SAM E TAXES. 4 5. AGAINST THIS LD. DR SUBMITTED THAT ASSESSEE HAS NOT FURNISHED ANY EXPLANATION BEFORE THE AO THEREFORE PENALTY HAS T O BE LEVIED. SECONDLY ACCORDING TO THE LD. DR NO LIMIT IS PRESCRIBED FOR MINIMUM OR MAXIMUM PENALTY LEVIABLE FOR DEFAULT UNDER SECTION 140A(3) THEREFORE THE PENALTY LEVIED BY THE AO IS REASONABLE. IN FACT ASSESSEE IS A REGULAR DEFAULTER IN NOT MAKING THE PAYMENT OF TAXES. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THE DEFAULT OF AS SESSEE IS APPARENTLY ESTABLISHED. RETURN OF INCOME WAS FILED ON 7.4.1997 ON AN INCOME OF RS.1 20 19 826/- ON WHICH TAX LIABILITY COMES TO RS .58 87 484/-. NO SELF ASSESSMENT WAS PAID AND NO EXPLANATION FOR NON-PAYM ENT OF TAXES IS FURNISHED. SO ONCE THE ASSESSEE IS DEEMED TO BE IN DEFAULT PENALTY IS CLEARLY LEVIABLE. HOWEVER WE UPHOLD THE ALTERNATIV E CONTENTION OF THE LD. AR THAT PENALTY LEVIED SHOULD BE RATIONAL AND REASO NABLE. QUANTUM OF PENALTY SO LEVIED IS NOT SUPPORTED BY ANY REASON OR ANY CRITERIA AND AD HOC AMOUNT OF RS.30 LACS WAS FIXED AND LEVIED. THIS IN OUR VIEW IS NOT ON REASONABLE AND SOUND APPROACH. THE DEFAULT COMMITTE D BY A TAX PAYER SHOULD BE MET WITH A REASONABLE DETERRENCE. ONCE TH E RETURN OF INCOME WAS FILED ON 7.4.1997 THEN TO LOOK AT THE BANK BALA NCE AS ON 31.3.1996 WILL NOT BE PROPER SO AS TO SAY THAT ASSESSEE HAD N O INTENTION TO MAKE THE PAYMENT EVEN IF HE HAD THE MONEY. ON THE OTHER HAND ASSESSEE HAS ALSO NOT MADE OUT ANY CASE WITH SUPPORTING MATERIAL AS T O WHY HE FAILED TO MAKE THE PAYMENT OF TAXES WHILE FILING THE RETURN O F INCOME. NONETHELESS WE ARE OF THE VIEW THAT PENALTY LEVIABLE FOR DEFAUL T UNDER SECTION 140A(3) SHOULD COMMENSURATE WITH THE LOSS REVENUE SUFFERED ON ACCOUNT OF WITHHOLDING THE SELF-ASSESSMENT TAX. 5 7. EVEN THOUGH SECTION 140A(3) AND SECTION 221 OF I NCOME-TAX ACT DO NOT PROVIDE ANY BASIS FOR LEVYING THE PENALTY EX CEPT POINTING OUT THAT PENALTY SO LEVIED SHOULD NOT EXCEED MAXIMUM AMOUNT OF TAX DUE BUT THIS PROPOSITION IS NOT ALWAYS WORKABLE AS IT DOES NOT T AKE INTO ACCOUNT THE PERIOD FOR WHICH DEFAULT CONTINUED. IF THE PERIOD O F DEFAULT IS VERY SMALL SAY ASSESSEE HAS PAID THE TAX AFTER DEFAULT OF 2/3 MONTHS AFTER FILING THE RETURN THEN IT WILL NOT BE REASONABLE TO LEVY THE P ENALTY AT THE MAXIMUM OF THE TAX IN DEFAULT. A DISTINCTION SHOULD BE MADE BETWEEN AN ASSESSEE WHOSE PERIOD OF DEFAULT U/S 140A(3) IS MORE AS COMP ARED TO THE ASSESSEE WHOSE PERIOD OF DEFAULT IS LESS. LEVY OF PENALTY IN SUCH CASES SHOULD BE RATIONAL AND LOGICAL AND COMMENSURATE WITH THE EXTE NT OF DEFAULT. IT IS FOR THE AO TO DEVISE A LOGICAL OR RATIONAL BASIS FOR CA LCULATING PENALTY UNDER SECTION 140A(3) OR SECTION 221(1). HOWEVER WE SHOU LD ALSO TAKE INTO ACCOUNT CHARGING OF INTEREST UNDER SECTIONS 234A 2 34B 234C ETC. FOR DEFAULT IN MAKING PAYMENT OF TAXES. AS FAR AS POSSI BLE MULTIPLE JEOPARDY TO THE ASSESSEE BY CHARGING INTEREST AND LEVYING TH E PENALTY UNDER DIFFERENT SECTIONS OF THE ACT FOR THE SAME DEFAULT SHOULD BE REASONABLY RECONCILED. 8. IN THE PRESENT CASE ASSESSEE WAS UNABLE TO SHOW THAT HE HAS BEEN CHARGED WITH INTEREST UNDER SECTION 234A 234B 234 C OR THE SAME HAS BEEN PAID. KEEPING THAT FACTOR IN MIND WE FIX A RE ASONABLE AMOUNT OF PENALTY WORKED OUT IN SUCCEEDING PARAGRAPH AND LEVI ABLE FOR THE PERIOD FOR WHICH DEFAULT PERSISTED. 9. IN ANY OTHER PROVISIONS OF THE ACT SUCH AS SECTI ON 215 216 OR SECTION 217 COMPENSATION FOR WITHHOLDING THE LEGITI MATE TAXES IS 15% PER ANNUM. IN VIEW OF THIS WE HOLD THAT COMPENSATION F OR WITHHOLDING SELF- ASSESSMENT TAX SHOULD NOT EXCEED THAT PARA METER. A CCORDINGLY WE DIRECT 6 THE AO TO CALCULATE PENALTY @ 15% PER ANNUM FOR EAC H COMPLETE OR PART OF THE MONTH TREATING IT AS FULL MONTH OF DEFAULT TILL THE DATE OF REGULAR ASSESSMENT WHICH IN THE PRESENT CASE IS 26.2.1999. THE AO WILL GIVE CREDIT TO THE TAXES PAID DURING THIS PERIOD AND RED UCE/CALCULATE LEVY OF PENALTY ACCORDINGLY FOR THE BALANCE OF TAXES DUE. 10. AS A RESULT APPEAL OF THE ASSESSEE IS RESTORED TO THE FILE OF AO TO CARRYOUT NECESSARY CALCULATION FOR QUANTUM OF PENAL TY. APPEAL OF THE ASSESSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. ITA NO.2235/AHD/2002 ASST. YEAR 1997-98 : 11. IN THIS YEAR ALSO THERE IS A DEFAULT IN PAYING SELF ASSESSMENT TAX. RETURN OF INCOME DECLARING TOTAL INCOME OF RS.26 91 739 WAS FILED ON 24.2.1998 THOUGH INCOME WAS REVISED ON AN INCOME OF RS.26 37 117/- ON 23.4.1998. THE RETURN WAS ACCEPTED UNDER SECTION 14 3(1)(A) ON 6.10.1998. NO SELF ASSESSMENT TAXES WERE PAID. IN RESPONSE TO SHOW CAUSE NOTICE ASSESSEE SUBMITTED FOLLOWING REPLY :- AS YOU ARE AWARE THE SELF ASSESSMENT TAX U/S 140A FOR ASST. YEAR 1996- 97 IS ALSO NOT FULLY PAID. AFTER FILING THE RETURN OF INCOME FOR ASST. YEAR 1997-98 ON 23.4.98 WE HAVE MADE THE FOLLOWING TAX P AYMENTS:- MONTH & YEAR AMOUNT RS. JUNE 1998 1 00 000 JULY 1998 4 00 000 SEPT. 1998 5 51 083 OCT. 1998 3 25 000 DEC.1998 1 00 000 SINCE THERE IS A HUGE TAX DEMAND FOR ASST. YEAR 199 6-97 THESE PAYMENTS WERE ADJUSTED AGAINST THE DEMAND FOR ASST. YEAR 199 6-97. AS YOU KNOW SIR THE CURRENT MARKET POSITION IS VERY BAD AND T HE ECONOMY IS FACING ITS 7 WORST EVER RECESSION. THIS SITUATION IS NOT ONLY RE STRICTED TO OUR COMPANY TO OUR COMPANY OR THE CITY OF AHMEDABAD BUT IT IS A WORLDWIDE PHENOMENON. FAILURE TO PAY THE SELF ASSESSMENT TAX U/S 140A IS NOT WILLFUL BUT CIRCUMSTANTIAL. UNDER THE CIRCUMSTANCE S IF WE ARE TREATED AS ASSESSEE IN DEFAULT IT WOULD MEAN THAT WE MAY BE C HARGED WITH PENALTIES AND INTEREST WHICH WE MAY NEVER BE ABLE TO PAY. AF TER ALL THE INTENTION OF INTEREST AND PENALTY SECTIONS WOULD BE NOT TO TERMI NATE ASSESSEES BUT TO PUNISH THEM FOR WILLFUL DEFAULTS. THE AO WAS HOWEVER NOT SATISFIED AND LEVIED PENAL TY OF RS.11 70 697/- UNDER SECTION 140A(3) R.W.S. 221(1). THE LD. CIT(A) CONFIRMED THE SAME FOR THE SAME REASONS AS HE HAS GIVEN IN ASST. YEAR 1996-97. 12. BEFORE US LD. AR REPEATED THE SAME ARGUMENTS A S WERE TAKEN IN THE APPEAL FOR ASST. YEAR 1996-97. HE SUBMITTED THAT AO HAS TAKEN INTO ACCOUNT THE TAX PAID BY THE ASSESSEE AFTER FILING O F RETURN OF INCOME WHOSE DETAILS ARE GIVEN IN THE LETTER DATED 25.2.1998 QUO TED BY THE LD. AO IN THE IMPUGNED PENALTY ORDER. 13. ON THE OTHER HAND LD. DR TOOK UP THE SAME ARGU MENTS AS WERE TAKEN BY HER IN ASST. YEAR 1996-97. THE ARGUMENT OF LD. DR WAS THAT COPIES OF THE CHALLANS ARE NOT AVAILABLE THEREFORE IT CANNOT BE SAID THAT TAXES WERE PAID FOR ASST. YEAR 1997-98. 14. IN REJOINDER THE LD. AR SUBMITTED THAT HE HAD I N FACT PAID THE TAXES FOR ASST. YEAR 1997-98 BUT THE AO HAS ADJUSTED THE PAYMENT OF TAXES AGAINST THE DEMAND PENDING FOR ASST. YEAR 1996-97. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. FOR THE REASONS DISCUSSED BY US IN ASST. YEAR 1996-97 WE CONFIRM THE EXISTENCE OF DEFAULT IN MAKING PAYMENT OF TAXES U/S 140A(3) 8 AS FACTS AND CIRCUMSTANCES OF THE CASE REMAINED THE SAME EXCEPT THE FACT THAT ASSESSEE HAS MADE THE PAYMENT OF TAXES OF RS.1 4 76 083/- FROM JULY 1998 TO DECEMBER 1998 WHOSE DETAILS ARE GIVEN ABO VE. THEREFORE THERE IS NO MATERIAL TO HOLD A DIFFERENT VIEW THAN TAKEN IN ASST. YEAR 1996-97. ACCORDINGLY WE ACCEPT THE CONTENTION OF ASSESSEE T HAT CREDIT FOR TAXES PAID SHOULD BE GIVEN WHILE CALCULATING QUANTUM OF P ENALTY WHEN IN FACT ASSESSEE HAS PAID TAXES FOR ASST. YEAR 1997-98 EVEN THOUGH DEPARTMENT MIGHT HAVE ADJUSTED THE SAME AGAINST DEMAND FOR ASS T. YEAR 1996-97. KEEPING IN VIEW THIS POSITION WE DIRECT THAT QUANT UM OF PENALTY LEVIABLE FOR DEFAULT UNDER SECTION 140A(3) SHOULD BE CALCULA TED FROM THE DATE OF FILING OF RETURN TILL THE PAYMENT OF TAXES OR TILL THE DATE OF REGULAR ASSESSMENT WHICH IS EARLIER. THE PENALTY SHOULD BE CALCULATED @ 15% P.A. FOR EACH COMPLETE MONTH OF DEFAULT OR PART OF THE M ONTH TREATING IT AS FULL MONTH OF DEFAULT. THE CREDIT OF TAXES PAID SHOULD B E GIVEN BEFORE CALCULATING PENALTY. WE ACCORDINGLY RESTORE THIS IS SUE TO THE FILE OF AO FOR CARRYING OUT CALCULATION AS PER OUR DIRECTION ABOVE . 16. AS A RESULT APPEAL FILED BY THE ASSESSEE IS PAR TLY ALLOWED BUT FOR STATISTICAL PURPOSES. ITA NO.2236/AHD/2002 ASST. YEAR 1997-98: 17. THIS APPEAL HAS BEEN FILED AGAINST THE ORDER OF LD. CIT(A) WHO HAS DISMISSED THE APPEAL OF ASSESSEE FOR WANT OF PAYMEN T OF TAXES AS PER RETURN OF INCOME FILED BY THE ASSESSEE ON 24.2.1998 . THE LD. CIT(A) HAS DISMISSED THE APPEAL BY OBSERVING AS UNDER :- THIS APPEAL IS DIRECTED AGAINST THE ASSESSMENT ORD ER PASSED U/S 143(3) OF THE IT ACT 1961 DATED 22.03.2000 BY JT. CIT SR -1 AHMEDABAD IN RESPONSE TO NOTICE OF HEARING SHRI PRERAK PATEL CA APPEARED FOR THE APPELLANT AND WAS HEARD. 9 2. BEFORE ME SHRI PRERAK PATEL AUTHORISED REPRESE NTATIVE OF THE APPELLATE COMPANY ATTENDED. WHEN INQUIRED HE HAS IN FORMED THAT THE APPELLANT COMPANY HAS NOT PAID TAXES U/S 140A OF TH E IT ACT 1961. PAYMENT OF SELF ASSESSMENT TAX IS A PRE-REQUISITE F OR FILING APPEAL IN THE CIRCUMSTANCES THE APPEAL IS NOT MAINTAINABLE. 3. IN THE RESULT THE APPEAL IS DISMISSED. 18. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT ASSE SSEE HAS PAID SELF- ASSESSMENT TAX AFTER FILING THE RETURN WHICH IS AS UNDER :- MONTH & YEAR AMOUNT RS. JUNE 1998 1 00 000 JULY 1998 4 00 000 SEPT. 1998 5 51 083 OCT. 1998 3 25 000 DEC.1998 1 00 000 ONCE THE ASSESSEE HAS PAID TAXES THIS APPEAL FILED BY THE ASSESSEE ON 24.4.2000 SHOULD HAVE BEEN ADMITTED AND DECIDED ON MERIT. HE REFERRED TO SECTION 249 WHICH PROVIDES FOR NON-ADMISSION OF APPEAL BY LD. CIT(A) IF TAXES ARE NOT PAID AS PER RETURN OF INCOME BY TH E DATE WHEN APPEAL IS FILED. HE SUBMITTED THAT IT IS INCORRECT TO SAY THA T APPEAL BECOMES NON- ADMISSIBLE IF SELF-ASSESSMENT TAXES ARE NOT PAID AL ONG WITH THE RETURN OF INCOME. 19. THE LD. DR ON THE OTHER HAND RELIED ON THE ORD ER OF LD. CIT(A). 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. IN THIS REGARD WE REFER TO SECTION 249(4 ) WHICH IS AS UNDER :- 10 SEC. 249(4) (4) NO APPEAL UNDER THIS CHAPTER SHALL BE ADMITTED UNLESS AT THE TIME OF FILING OF THE APPEAL -- (A) WHERE A RETURN HAS BEEN FILED BY THE ASSESSEE THE ASSESSEE HAS PAID THE TAX DUE ON THE INCOME RETURNED BY HIM ; OR (B) WHERE NO RETURN HAS BEEN FILED BY THE ASSESSEE THE ASSESSEE HAS PAID AN AMOUNT EQUAL TO THE AMOUNT OF ADVANCE TAX WHICH WAS PAYABLE BY HIM; PROVIDED THAT IN A CASE FALLING UNDER CLAUSE (B) A ND ON AN APPLICATION MADE BY THE APPELLANT IN THIS BEHALF THE DEPUTY CO MMISSIONER (APPEALS) OR AS THE CASE MAY BE THE COMMISSIONER (APPEALS) MAY FOR ANY GOOD AND SUFFICIENT REASON TO BE RECORDED IN WRITING EX EMPT HIM FROM THE OPERATION OF THE PROVISIONS OF THAT CLAUSE. 21. THIS SECTION CLEARLY LAYS DOWN THAT ADMISSION O F APPEAL BY LD. CIT(A)WILL BE DENIED ONLY WHEN TAXES AS PER THE RET URN ARE NOT PAID AT THE TIME OF FILING OF APPEAL AND NOT AT THE TIME OF FIL ING OF RETURN. THUS IT IS INCORRECT ON THE PART OF LD. CIT(A) TO REFUSE TO AD MIT THE APPEAL WITHOUT CONSIDERING THE FACTS THAT ASSESSEE HAS PAID TAXES AS PER RETURN OF INCOME UPTO DECEMBER 1998 WHEREAS THE APPEAL IS FILED ON 24.2.2000. WE HAVE HELD WHILE DISPOSING OF APPEAL FOR THE SAME YEAR AG AINST LEVY OF PENALTY UNDER SECTION 140A(3) R.W.S. 221 THAT TAXES PAID BY THE ASSESSEE IN 1998 ARE FOR ASST. YEAR 1996-97 THOUGH THEY MIGHT HAVE B EEN ADJUSTED BY THE DEPARTMENT AGAINST THE DEMAND FOR ASST. YEAR 1996-9 7. NO CONTRARY MATERIAL HAS BEEN SHOWN BY THE REVENUE AGAINST THE ASSERTION OF THE FACT THAT TAXES AS ABOVE WERE PAID BY THE ASSESSEE FOR ASST. YEAR 1997-98. 22. IN VIEW OF ABOVE WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THE APPEAL TO HIS FILE FOR DECIDING IT ON MERIT. 11 23. ACCORDINGLY APPEAL FILED BY THE ASSESSEE IS TR EATED AS ALLOWED BUT FOR STATISTICAL PURPOSES. 24. IN THE RESULT ALL THE THREE APPEALS OF THE ASS ESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. SD/- SD/- (T.K. SHARMA) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD DATED : 22/2/2010 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD ORDER PRONOUNCED IN OPEN COURT ON 22/2/2010