CIT, PATIALA vs. M/S MOHINDRA STEELS

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ITA/760/2008HC Punjab & HaryanaPHHC01080784200811 May 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The Revenue's counsel submitted that in view of CBDT circulars No. 21/2015 and No. 279/Misc/M-142/2007-ITJ (Part), the appeal was not being pressed as the tax effect was less than ₹20 lacs. The Revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The Court granted this liberty. It was clarified that the withdrawal of the appeal by the Revenue would not be taken as an affirmation of the Tribunal's order on merits, and the legal issues raised were left open to be adjudicated in an appropriate case. Therefore, the specific findings on the questions of law were not adjudicated upon by the High Court.

What were the facts?

The Commissioner of Income-Tax, Patiala (Revenue) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 31.03.2008 passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench-B. The appeal pertains to assessment year 1995-96 and challenges the ITAT's deletion of penalty. The dispute arose from an order passed by the CIT(A) which enhanced certain additions made by the Assessing Officer (AO). The ITAT had deleted the penalty, leading to the present appeal by the Revenue.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was justified in deleting the penalty by holding that since the enhancement was made by the CIT(A), penalty had also to be levied by him alone? 2. Whether the ITAT was justified in deleting the penalty by holding that the AO had not recorded any satisfaction, without appreciating that the order of the CIT(A) making enhancement and recording satisfaction under Section 271(1)(c) had merged with the order of the AO when the latter passed an order giving effect to the CIT(A)'s order? 3. Whether the ITAT's order was perverse in holding that no penalty was leviable because there was a difference of opinion between two authorities, ignoring that the superior authority only enhanced the concealment/suppression and also upheld the suppression and addition made by the AO? 4. Whether, even after the insertion of sub-section (1B) to Section 271 by the Finance Act, 2008, effective retrospectively from 01.04.1989, the ITAT was justified in holding that no penalty was leviable due to lack of satisfaction recorded by the AO before initiation of penalty proceedings under Section 271(1)? The Revenue argued that the satisfaction recorded by the CIT(A) merged with the AO's order, and that the ITAT's finding was perverse. The assessee's arguments are not explicitly recorded, but their position is implied by the ITAT's deletion of penalty.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(c),Section 271(1),Section 271

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.05.2016 The Commissioner of Income-Tax, Patiala .......Appellant Versus M/s Mohindra Steels ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Zora Singh Klar, Advocate for the appellant. Mr. Divya Suri, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 31.3.2008 passed by the Income Tax Appellate Tribunal, Chandigarh Bench-B, Chandigarh, in ITA No. 815/Chd./2007, for the assessment year 1995-96, raising the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, the ITAT was justified in deleting the penalty by holding that since the enhancement was made by the CIT (A), penalty had also to be levied by him alone? (ii) Whether on the facts and in the circumstance of the case, the ITAT was justified in deleting the penalty by holding that the Ld. Assessing Officer had not recorded any satisfaction without appreciating that the order of the CIT(A) making enhancement and recording satisfaction u/s 271(1)(c) had got merged with the order of the A.O. REEMA SAINI 2016.05.27 11:40 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- when the latter passed an order giving effect to the said order of the CIT (A)? (iii) Whether on the facts and in the circumstance of the case, the ITAT's order was perverse in holding that no penalty was leviable because there was a difference of opinion between two authorities ignoring the fact that the superior

authority

only

enhanced

the concealment/suppression and also upheld the suppression and addition made by the A.O.? (iv) Whether on the facts and in the circumstance of the case, and even after the insertion of sub section (1B) to Section 271 by the Finance Act, 2008 effective retrospectively from 01.04.1989 the ITAT was justified in giving the said finding on the point of recording of satisfaction before initiation of penalty u/s 271(1)? Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 11.05.2016 JUDGE reema REEMA SAINI 2016.05.27 11:40 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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