CIT-AMRITSAR vs. ALKA KHURANA

ITA/281/2009HC Punjab & HaryanaPHHC01084372200902 May 20163 pages

AI SummaryWithdrawn

What did the High Court hold?

The appeal was dismissed as not pressed. The Revenue's counsel, citing CBDT circulars No. 21/2015 and No. 279/Misc/M-142/2007-ITJ (Part), stated they did not wish to press the appeal as the tax effect involved 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. No finding was reached on the merits of the substantial questions of law.

What were the facts?

The Revenue (Commissioner of Income Tax-II, Amritsar) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 31.10.2008 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The ITAT's order pertained to assessment year 1998-99 and had set aside a penalty order against the assessee, Smt. Alka Khurana. The appeal raised several substantial questions of law concerning the ITAT's decision to set aside the penalty, particularly in light of findings that penalty proceedings were initiated and the assessee declared concealed income in a revised return only after the detection of a scam by the Department. The Revenue alleged the assessee had obtained 'Accommodation Entries' by becoming a partner in M/s A.G. Exports as part of a 'Bogus Export Entry Scam'.

What were the issues?

The Tribunal was to decide the following substantial questions of law: 1. Whether the ITAT erred in setting aside the penalty order after finding that penalty proceedings were duly initiated and the assessee declared concealed income in a revised return only after the detection of the scam by the Revenue? 2. Whether the ITAT committed perversity by ignoring evidence, including statements and documents, demonstrating the assessee obtained 'Accommodation Entries' by becoming a partner in M/s A.G. Exports? 3. Whether the impugned order is contrary to law, perverse, and illegal by ignoring the 'Bogus Export Entry Scam' unearthed by the Investigation Wing, which indicated the assessee was not a partner and had arranged an accommodation entry? 4. Whether the ITAT erred in setting aside the Penalty Order solely because one statement used against the assessee could not be cross-examined, ignoring other overwhelming evidence? 5. Whether the ITAT erred in setting aside the penalty order when Sh. Vivek Kapoor had stated before the Income Tax Settlement Commission that he provided accommodation entries and paid taxes on disclosed income? The Revenue contended that the ITAT had erred in its findings. The judgment does not record specific arguments from the assessee's side regarding these issues, other than their counsel appearing.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 02.05.2016 Commissioner of Income Tax-II, Amritsar .......Appellant Versus Smt. Alka Khurana ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Denesh Goyal, Sr. Standing counsel for the appellant. Mr. Alok Mittal, 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 31.10.2008 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, in ITA No. 230/ASR/2008, for the assessment year 1998-99, raising the following substantial question of law: (i) Whether the Ld. ITAT has grossly erred in law in setting aside the penalty order after giving findings that the penalty proceeding were duly initiated and the assessee declared the concealed income in revised return only after detection of the Scam by the Department/Revenue? (ii) Whether the Ld. ITAT has committed an ex-facie perversity in law by ignoring the evidence on record, which included the various statements and documents demonstrating that the assessee had indulged in obtaining 'Accommodation Entries' by opting to become a partner in M/s A.G. Exports? (iii) Whether in the facts and in the circumstances of REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- the case, the impugned order is contrary to law, perverse and illegal in as much as, ignoring that the 'Bogus Export Entry Scam' unearthed by the Investigation Wing of the Income Tax Department that the assessee is infact not a partner in M/s A.G. Exports and he has simply arranged an accommodation entry and the overwhelming evidence produced thereof? (iv) Whether the impugned order is wholly erroneous in setting aside the Penalty Order only for the reason that one statement used against the assessee could not be cross examined by the assessee, ignoring the other well established overwhelming evidence? (v) Whether in the facts and circumstances of the case, the Ld. ITAT has erred in setting aside the penalty order when Sh. Vivek Kapoor has already in his case before the Income Tax Settlement Commission stated that he provided accommodation entries to the parties and paid taxes on the income disclosed? 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 REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh -3- 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) 02.05.2016 JUDGE reema REEMA SAINI 2016.05.03 11:16 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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