PRINCIPAL COMMISSIONER OF INCOME TAX 5 vs. M/S SHYAM CORPORATION

TAXAP/1263/2018HC GujaratGJHC24059764201823 October 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE UMESH A. TRIVEDI2 pages
AI SummaryDismissed

What were the facts?

The Revenue, specifically the Principal Commissioner of Income Tax 5, filed an appeal before the High Court of Gujarat challenging a judgment of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench, dated April 18, 2018. The ITAT had deleted a penalty of Rs. 1,96,72,484/- levied under Section 158BFA(2) read with Section 158BFA(3) of the Income Tax Act, 1961. The penalty was imposed on M/s Shyam Corporation for alleged concealment of income. The Assessing Officer had levied this penalty, and the Commissioner of Income Tax (Appeals) had upheld it, but the ITAT ultimately deleted it. The High Court noted that similar appeals by the Revenue against the Tribunal's decision had already been dismissed.

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The primary reason for the dismissal was that the Tribunal had deleted the penalty mainly on the ground that the quantum addition, which formed the basis for imposing the penalty, had itself been deleted. Furthermore, the Revenue's counsel acknowledged that the High Court had already dismissed similar Tax Appeals (No. 787 of 2017 and 788 of 2017) on March 7, 2018, against the same decision of the Tribunal. Therefore, following its previous decisions and acknowledging the dismissal of related appeals, the High Court found no merit in the present appeal. The specific reasoning behind the Tribunal's deletion of the penalty, particularly concerning the 'ignorance of law' argument, was not elaborated upon by the High Court in this order as the appeal was dismissed on procedural and precedent grounds.

What were the issues?

1. Whether the Appellate Tribunal was correct in law and fact in upholding the decision of the CIT(A) and deleting the penalty of Rs. 1,96,72,484/- 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 the income and penalty under Section 158BFA(2) read with Section 158BFA(3) of the Act is not leviable? Contentions: Assessee: The judgment does not record specific contentions for the assessee. Revenue: The Revenue argued that the penalty was leviable under Section 158BFA(2) read with Section 158BFA(3) of the Act. The judgment notes that the Tribunal deleted the penalty mainly on the ground that the quantum addition on which the penalty was imposed had itself been deleted. The Revenue's counsel candidly pointed out that similar Tax Appeals (No. 787 of 2017 and 788 of 2017) against the Tribunal's decision were dismissed by the High Court on March 7, 2018.

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/1263/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 1263 of 2018 ========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 5 Versus M/S SHYAM CORPORATION ========================================================== 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 fact in upholding the decision of the CIT(A) and deleting the penalty of Rs.1,96,72,484/- 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 assess

The order continues below.

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