THE COMMISSIONER OF INCOME TAX (EXEMPTIONS), CHANDIGARH vs. M/S SWAMI VIVEKANAND EDUCATIONAL SOCIETY HUDA, SECTOR 17 JAGADHRI (PAN: AAAJV0306N)

ITA/34/2018HC Punjab & HaryanaPHHC01119199201814 May 2018Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE DEEPAK SIBAL3 pages
AI SummaryDismissed

What were the facts?

The Revenue, represented by the Commissioner of Income Tax (Exemptions), Chandigarh, filed an appeal against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh. The appeal pertains to assessment year 2005-06 and concerns the deletion of a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961. The assessee, M/s Swami Vivekanand Educational Society, a registered charitable trust, had transferred two properties to its sister charitable trusts, also registered under Section 12A. These transfers were disclosed in the returns. However, departmental authorities treated these as transfers resulting in capital gains and consequently levied a penalty for alleged concealment of income.

What did the High Court hold?

The High Court held that no substantial question of law arose from the ITAT's order. The Tribunal had found that the assessee made a full disclosure of the property transfers to its sister charitable trusts in its returns. Crucially, the Tribunal noted that the Revenue had not produced any material to show that the assets were transferred for any consideration received or receivable by the assessee. Based on these facts, the Tribunal concluded that it was not a case of deliberate concealment of income, making the penalty under Section 271(1)(c) not leviable. The Tribunal's reliance on the Supreme Court decision in CIT vs. Reliance Petroproducts Pvt. Ltd. was deemed appropriate in this context. Therefore, the appeal filed by the Revenue was dismissed.

What were the issues?

1. Whether, on the facts and circumstances and in law, the ITAT was justified in deleting the penalty by accepting the assessee's claim of providing a plausible explanation during assessment proceedings, when departmental authorities up to the ITAT level had confirmed the addition made by the Assessing Officer on account of capital gain under Section 11(1A) of the Act? (Question of law and fact, concerning Section 11(1A) and Section 271(1)(c)). 2. Whether, on the facts and circumstances and in law, the ITAT was justified in deleting the penalty when the CIT(A) had provided detailed findings regarding concealment or furnishing of inaccurate particulars of income? (Question of law and fact, concerning Section 271(1)(c)). 3. Whether, on the facts and circumstances and in law, the ITAT was justified in deleting the penalty by applying the ratio of the Supreme Court decision in CIT vs. Reliance Petro Products Ltd., when the assessee's claim was held unsustainable up to the ITAT level? (Question of law, concerning Section 271(1)(c) and reliance on precedent). Assessee's contention: Not recorded. Revenue's contention: The ITAT was not justified in deleting the penalty, as the addition on account of capital gain was confirmed up to the ITAT level, and the CIT(A) had found concealment. Reliance was placed on the Supreme Court decision in CIT vs. Reliance Petro Products Ltd., implying it was misapplied.

Which sections of the Income-tax Act were involved?

Section 11(1A),Section 12A,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Sr. No. 109 ITA No. 34 of 2018 (O&M)

Date of decision : 14.05.2018 The Commissioner of Income Tax (Exemptions),Chandigarh ..... Appellant

VERSUS M/s Swami Vivekanand Educational Society, HUDA, Jagadhri ..... Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE DEEPAK SIBAL Present: Mr. Denesh Goyal, Advocate, for the appellant.

. . . RAJESH BINDAL, J: Revenue is in appeal against the order dated 21.11.2016, passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh (for short the 'Tribunal') in ITA No. 876/Chd/2014. The appeal pertains to the assessment year 2005-06 and seeks to raise the following substantial questions of law: - “(i) Whether on the facts and circumstances and in law the Hon'ble ITAT was justified in deleting the penalty by accepting assessee's claim that plausible enough explanation had been given during the assessment proceedings whereas the appellant authorities upto the ITAT level had confirmed the additi

The order continues below.

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