PR. COMMOISSIONER OF INCOME TAX vs. M/S MANOHAR INFRASTRUCTURE & CONSTRUCTION PVT. LTD.

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ITA/314/2017HC Punjab & HaryanaPHHC01117519201707 September 2018Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE ARUN MONGA2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as withdrawn. The revenue, through its counsel, stated that it had instructions to withdraw the appeal due to the tax effect involved (₹24,05,192) and in view of CBDT Circular No.03/2018 dated 11.07.2018. The revenue sought liberty to file an application for revival of the appeal if something survived. The Court granted this liberty. The Court clarified that the withdrawal of the appeal by the revenue would not be considered an affirmation of the Tribunal's order on merits. Furthermore, the Court explicitly stated that the legal issue claimed by the revenue was left open to be adjudicated in an appropriate case.

What were the facts?

The Principal Commissioner of Income Tax (Central), Gurgaon (the revenue) filed an appeal before the High Court of Punjab and Haryana at Chandigarh. The appeal was against an order passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, for the assessment year 2011-12. The ITAT's order was in ITA No.729/CHD/2016. The dispute pertains to the deletion of penalty imposed under Section 271AAA of the Income Tax Act, 1961. The tax effect involved in the appeal was ₹24,05,192. The revenue sought to withdraw the appeal based on CBDT Circular No.03/2018.

What were the issues?

1. Whether on the facts and circumstances of the case, the ITAT erred in law by deleting the penalty imposed under Section 271AAA of the Income Tax Act, 1961, despite the Assessing Officer's finding that the assessee failed to satisfy the conditions laid therein? (Question of law) 2. Whether the findings recorded by the ITAT were based on a misreading and misrepresentation of facts and evidence on record? (Question of mixed law and fact) 3. Whether the ITAT committed a grave error in arriving at its conclusion by adopting an erroneous criterion and importing facts and circumstances contrary to the record? (Question of mixed law and fact) Contentions: Assessee: Not recorded in the judgment. Revenue: The revenue argued that the ITAT erred in deleting the penalty under Section 271AAA, as the assessee had not satisfied the conditions stipulated in the section, as determined by the Assessing Officer. The revenue also contended that the ITAT's findings were based on misreading of facts and evidence and by importing extraneous considerations.

Which sections of the Income-tax Act were involved?

Section 271AAA

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision.07.09.2018 Pr. Commissioner of Income Tax (Central), Gurgaon ...Appellant Vs M/s Manohar Infrastructure ...Respondents CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE AMIT RAWAL Present: Mr. Rajesh Sethi, Senior Standing Counsel Ms. Varinder Kaur Waraich, Advocate & Mr. Tushar Gera, Advocate for the appellant. Mr. Akshay Bhan, Senior Advocate with Mr. Amandeep Singh Talwar, Advocate for the respondent. -.- RAJESH BINDAL J. The revenue is in appeal against the order passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh in ITA No.729/CHD/2016 dated 09.11.2016 for the assessment year 2011-12, raising the following substantial questions of law. “1. Whether on the facts and circumstances of the case in law, the ITAT has erred in deleting the penalty imposed u/s 271AAA of the Income Tax Act, 1961 despite the factual decision of the Assessing Officer that the assessee has failed to substantiate the provisions of section 271AAA by not satisfying the conditions laid therein?

2.

Whether the findings have been recorded by ITAT on misreading and misrepresentation of facts and evidence emanating on record? PANKAJ KUMAR 2018.09.12 10:24 I attest to the accuracy and integrity of this document -2-

3.

Whether the ITAT did not commit grave error in arriving at such conclusion after adopting erroneous criteria and by importing such facts and circumstances which are contrary to record?” Learned counsel for the appellant-revenue states that since the tax effect involved is ` 24,05,192/-, he has instructions to withdraw the present appeal in view of Circular No.03/2018 dated 11.07.2018 issued by the Central Board of Direct Taxes, New Delhi. However, he has prayed that liberty to be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as withdrawn with liberty as prayed for. It is, however, clarified that withdrawal of the appeal by the revenue shall not be taken to be affirmation of order of the Tribunal on merits. Further, the legal issue as claimed by the revenue is being left open to be adjudicated in an appropriate case. (RAJESH BINDAL) JUDGE (AMIT RAWAL) JUDGE September 07, 2018 Pankaj* Whether speaking/reasoned Yes/No Whether reportable Yes/No PANKAJ KUMAR 2018.09.12 10:24 I attest to the accuracy and integrity of this document

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