High Court Of Bombay
Safari Mercantile (P) Ltd. vs. Income Tax Appellate Tribunal & Ors.
Section 254(2)
Asst. Year 2001-02
F.I. Rebello & J.P. Devadhar, JJ.
Writ Petn. No. 1517 of 2007
31st July, 2007
Counsel Appeared
S. J. Mehta, for the Petitioner : Ashok Kotangale, for the Respondents
JUDGMENT
J. P. Devadhar, J. :
Heard Rule. Rule made returnable forthwith. By consent of the parties, the writ petition is taken up for final hearing. This petition is filed to challenge the order passed by the Tribunal , Bombay, dt. 7th March, 2007, whereby the miscellaneous application filed by the petitioner seeking rectification of mistake in the order passedby the Tribunal on 9th May, 2006, has been dismissed. The assessment year involved herein is the asst. yr. 2001-02. The return of income for the asst. yr. 2001-02 was filed on 31st Oct., 2001, and the assessee paid the self-assessment tax of Rs. 90,00,000. On 30th Dec., 2001, an order was passed by respondent No. 2 under s. 140A of the IT Act, 1961, stating therein that the assessee has not paid the full amount of self-assessment tax and, accordingly, the assessee was treated as assessee deemed to be in default in respect of tax, surcharge and interest remaining unpaid. After issuing notice under s. 221 of the Act, penalty was levied by passing an order on 7th Feb., 2002. On appeal filed by the assessee, the CIT(A), inter alia, accepted the contention of the assessee that the AO did not raise any demand against the assessee and simply issued the penalty notice and, accordingly, held that the assessee cannot be said to be in default. On appeal filed by the Revenue, the Tribunal by its order dt. 9th May, 2006, held that the demand of tax in this case was undisputed and, accordingly, sustained the penalty to the extent of tax remaining unpaid.
The assessee filed a miscellaneous application before the Tribunal seeking rectification of the order dt. 9th May, 2006. By the impugned order dt. 7th March, 2007, the Tribunal dismissed the said miscellaneous application. Hence, this petition. The grievance of the petitioner is that when the CIT(A) has deleted the penalty by recording a finding that the AO did not raise any demand against the assessee, the Tribunal could not have held that no plea was raised by the assessee regarding non-service of the demand notice. Mr. Kotangale, learned counsel for the Revenue, submitted that there are documents to show that the demand notice was in fact served upon the assessee. The only question to be considered in this petition is whether the Tribunal is justified in rejecting the miscellaneous application filed by the assessee on the ground that at the hearing of the appeal the assessee had not raised the plea that demand notice has not been served upon the assessee. On a perusal of the order passed by the CIT(A), it is seen that the penalty levied under s. 221 of the Act was deleted on the ground that the demand notice has not been served upon the assessee. In the appeal filed by the Revenue against the said order of the CIT(A), the main issue was whether the CIT(A) was justified in holding that there was no service of demand notice. Therefore, the finding recorded by the Tribunal that the plea regarding non-service of the demand notice was not raised before the Tribunal cannot be sustained. Accordingly, the writ petition is allowed. The impugned order dt. 7th March, 2007, passed by the Tribunal is set aside and the Tribunal is directed to dispose of the miscellaneous application on the merits.
13. The contentions of both sides are kept open. The writ petition is allowed in the aforesaid terms with no order as to costs.
[Citation : 294 ITR 64]
