PRINCIPAL COMMISSIONER OF INCOME TAX 5 vs. ARVINDBHAI P. PATEL

TAXAP/1265/2018HC GujaratGJHC24059784201823 October 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE UMESH A. TRIVEDI2 pages
AI SummaryDismissed

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax 5, filed an appeal before the High Court of Gujarat at Ahmedabad challenging an order passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, dated April 18, 2018. The appeal concerns the deletion of a penalty levied under Section 158BFA(2) read with Section 158BFA(3) of the Income Tax Act, 1961, for alleged concealment of income. The Assessing Officer had imposed this penalty. The ITAT deleted the penalty primarily because the quantum addition on which the penalty was based had itself been deleted. The High Court noted that similar appeals (Tax Appeals No. 855 of 2017 and 857 of 2017) against the ITAT's decision were dismissed by the High Court on March 7, 2018.

What did the High Court hold?

The High Court dismissed the Revenue's appeal. The primary reason for dismissal was that the High Court itself had previously dismissed similar appeals (Tax Appeals No. 855 of 2017 and 857 of 2017) on March 7, 2018, against the same ITAT decision. Although the judgment frames questions regarding the deletion of penalty and the validity of ignorance of law as a defense, the operative part of the order indicates that the appeal was dismissed based on the precedent of earlier dismissed appeals. The reasoning for the ITAT's deletion of the penalty, as stated in the facts, was that the underlying quantum addition was deleted. The High Court's decision does not delve into the merits of the penalty or the specific arguments related to concealment or ignorance of law, but rather relies on its prior dismissal of identical appeals.

What were the issues?

1. Whether the Appellate Tribunal was correct in law and on facts in deleting the penalty levied under Section 158BFA(2) read with Section 158BFA(3) of the Act on account of concealment of income? 2. Whether ignorance of law can be a valid ground to hold that the assessee has not concealed income and penalty under Section 158BFA(2) read with Section 158BFA(3) of the Act is not leviable? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The Tribunal deleted the penalty mainly on the ground that the quantum addition, which formed the basis for the penalty, was deleted. Revenue's Contention: The Revenue's appeal challenges the correctness of the Tribunal's decision in deleting the penalty. The Revenue relies on the fact that the penalty was levied under Section 158BFA(2) read with Section 158BFA(3) for concealment of income. The Revenue's appeal is based on the questions of law presented.

Which sections of the Income-tax Act were involved?

Section 158BFA(2),Section 158BFA(3)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/1265/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1265 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 5 Versus ARVINDBHAI P. PATEL ========================================================== Appearance: MRS MAUNA M BHATT(174) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE UMESH TRIVEDI Date : 23/10/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)

1.

Revenue has filed this appeal challenging the judgment of Income Tax Appellate Tribunal, Ahmedabad Bench, dated 18.4.2018. Following questions have been presented for our consideration: “[A] Whether the Appellate Tribunal is correct in law and on facts in deleting the penalty levied u/s. 158BFA(2) r.w.s. 158BFA(3) of the Act on account of concealment of income? [B] Whether `ignorance of law’ can be a valid ground to hold that the assessee has not concealed the income and penalty u/s. 158BFA(2)

The order continues below.

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