PRINCIPAL COMMISSIONER OF INCOME TAX 2, VADODARA vs. SYNBIOTICS LIMITED

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TAXAP/997/2018HC GujaratGJHC24038666201807 August 2018Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE A.Y. KOGJE2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issues raised in the appeal were concluded against the Department. The Court noted that the ITAT, in passing the impugned order, had relied upon its own decision concerning the respondent assessee's sister concern, which dealt with the same land. Crucially, it was reported that the ITAT's decision had been confirmed by a Division Bench of the High Court itself in Tax Appeal No. 233/2018 and allied matters. Consequently, the Court found no substantial questions of law arising from the appeal. The appeal was dismissed. The specific reasoning for the deletion of penalty by the ITAT, beyond its reliance on a prior decision, is not detailed in this order. No issue was expressly left undecided.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax 2, Vadodara, has filed a Tax Appeal against an order dated 29.11.2017 passed by the Income Tax Appellate Tribunal (ITAT), Ahmedabad 'C' Bench. The appeal pertains to Assessment Year 2008-2009 and challenges the ITAT's deletion of penalty levied under Section 271(1)(c) of the Income Tax Act. The ITAT had relied on its own decision concerning a sister concern of the assessee, Synbiotics Limited, regarding the same land. This decision of the ITAT was reportedly confirmed by a Division Bench of the Gujarat High Court in Tax Appeal No. 233/2018 and allied matters.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the learned ITAT has erred in law and on facts in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act, without appreciating the facts justifying the imposition of penalty as discussed in the orders of the CIT(A) and the AO, and without considering that the penalty was supported by Explanation 1 to Section 271(1)(c)? (Revenue's contention). 2. Whether, on the facts and in the circumstances of the case, the learned ITAT has erred in law and on facts, in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act by mechanically following another case's decision, and without appreciating the facts discussed in the orders of the CIT(A) and the AO, and whether this decision suffers from perversity? (Revenue's contention). The Revenue argued that the ITAT erred in deleting the penalty by not appreciating the factual basis laid by the Assessing Officer (AO) and Commissioner of Income Tax (Appeals) (CIT(A)) and by mechanically following a previous decision. The Revenue contended that the penalty was justified under Explanation 1 to Section 271(1)(c) and that the ITAT's decision was perverse. The judgment does not record any specific arguments from the assessee's side beyond their appearance.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/997/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 997 of 2018 =========================================================== PRINCIPAL COMMISSIONER OF INCOME TAX 2, VADODARA Versus SYNBIOTICS LIMITED ================================================================ Appearance: MR.VARUN K.PATEL(3802) for the PETITIONER(s) No. 1 MR B S SOPARKAR(6851) for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE Date : 07/08/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE M.R. SHAH)

1.

Feeling aggrieved and dis-satisfied with the order dated 29.11.2017 passed by the learned Income Tax Appellate Tribunal (ITAT), Ahmedabad “C” Bench, Ahmedabad in ITA No.1705/Ahd./2017 for the Assessment Year : 2008- 2009, the Revenue has preferred the present Tax Appeal with the following proposed question/s of law :- “(a) Whether on the facts and in circumstances of the case, the learned ITAT has erred in law and on facts in deleting the penalty levied u/s. 271(1)(c) of the Income Tax Act without appreciating the facts discussed in the orders of the CIT(A) and the AO justifying the imposition of penalty and without considering that the penalty was supported by Explanation 1 to section 271(1)(c)? (b) Whether on the facts and in circumstances of the case, the learned ITAT has erred in law and on facts, in deleting the penalty levied u/s. 271(1)(c) of the Income Tax Act by mechanically following the decision in C/TAXAP/997/2018 ORDER another case, and without appreciating the facts discussed in the orders of the CIT(A) and the AO, and whether this decision suffers from perversity?

2.

We have heard learned Advocate Mr. Varun K. Patel appearing for the appellant – Department and learned Advocate Mr. B.S. Soparkar appearing for the respondent – assessee.

3.

It is required to be noted and it is also in dispute that while passing the impugned order, the learned Tribunal has relied upon its own decision in respect of the sister concern of the respondent – assessee, with respect to the same land. It is reported that the decision of the Tribunal has been confirmed by the Division Bench of this Court in Tax Appeal No.233/2018 and allied matters.

4.

Under the circumstances, the issues raised are concluded against the Department. No substantial questions of law arise in this Appeal. The Appeal deserves to be dismissed and is accordingly, dismissed. (M.R. SHAH, J) (A.Y. KOGJE, J) CAROLINE

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