COMMISSIONER OF INCOME TAX (EXEMPTIONS) vs. VIDYA BHARTI TRUST

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TAXAP/477/2018HC GujaratGJHC24026525201809 May 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no question of law arises from the ITAT's order. The ITAT, along with the Commissioner of Income Tax (Appeals), had deleted the penalty of Rs. 24,47,738/- under Section 271(1)(c) of the Income Tax Act, 1961. The basis for this deletion was the finding that the assessee's computation of arrears was bona fide and that the issue involved was debatable. The High Court found no legal infirmity in this decision, thus dismissing the Revenue's appeal. The operative direction was to dismiss the Tax Appeal.

What were the facts?

The Revenue is in appeal against the order of the Income Tax Appellate Tribunal (ITAT) dated November 24, 2017. The appeal concerns a penalty of Rs. 24,47,738 levied under Section 271(1)(c) of the Income Tax Act, 1961. This penalty was imposed due to the disallowance of 15% accumulation and the disallowance of a claim for an earmarked fund, identified as a corpus fund. The Assessing Officer had levied this penalty. However, both the Commissioner of Income Tax (Appeals) and the ITAT deleted the penalty. Their reasoning was that the assessee's computation of arrears was bona fide and the issue was debatable.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was justified in deleting the penalty levied of Rs. 24,47,738/- under Section 271(1)(c) of the Act, 1961, on disallowance of 15% accumulation and disallowance of claim of earmarked fund being corpus fund? Assessee's Contentions: Not recorded in the judgment. Revenue's Contentions: The Revenue contended that the ITAT was not justified in deleting the penalty of Rs. 24,47,738/- imposed under Section 271(1)(c) of the Income Tax Act, 1961. The penalty arose from the disallowance of 15% accumulation and the disallowance of a claim for an earmarked fund, which was considered a corpus fund. The Revenue implicitly argues that the conditions for levying penalty were met.

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/477/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 477 of 2018 ========================================================== COMMISSIONER OF INCOME TAX (EXEMPTIONS) Versus VIDYA BHARTI TRUST ========================================================== 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 B.N. KARIA Date : 09/05/2018

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

1.

Revenue   is   in   appeal   against   the   judgment   of   the Income   Tax   Appellate   Tribunal   dated   24.11.2017   raising following question for our consideration: “Whether   on   the   facts   and   in   the circumstances of the case and in law, the Appellate Tribunal was justified in deleting the   penalty   levied   of   Rs.   24,47,738/­   u/s 271(1)(c) of the Act, 1961 on disallowance of   15%   accumulation   and   disallowance   of claim of earmarked fund being corpus fund ?”

2.

Issue   thus   pertains   to   imposition   of   penalty under section 271(1)(c) of the Income Tax Act, 1961. The documents on record would show that the Assessing Officer having levied such penalty, the Commissioner of Income Tax (Appeals) and the Tribunal both deleted C/TAXAP/477/2018 ORDER such penalty on the ground that there was computation of   arrear   on   the   part   of   the   assessee   which   was bona­fide and the issue was debatable.

3.

No   question   of   law   arises.     Tax   Appeal   is dismissed. (AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH

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