CIT LUDHIANA vs. AVON CYCLES P.LTD.LUDHIANA

ITR/34/1998HC Punjab & HaryanaPHHC01038005199807 November 2013Author: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA2 pages
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What were the facts?

This case involves an Income Tax Reference filed by the Commissioner of Income Tax (Central), Ludhiana (appellant/revenue) against Avon Cycles Ltd., Ludhiana (respondent/assessee). The reference pertains to a substantial question of law decided by the Income Tax Appellate Tribunal (ITAT). The core of the dispute revolves around whether interest under Section 215 of the Income Tax Act, 1961, was chargeable in the assessee's case. The parties have agreed that a similar question of law has already been adjudicated by the High Court in a previous case, providing a basis for resolving the current reference.

What did the High Court hold?

The High Court, in this reference, decided the substantial question of law based on the agreement of the parties. The Court held that the question of law is answered in terms of the judgment in ITA No.15 of 2012 (Commissioner of Income Tax-II, Chandigarh v. M/s SAB Industries, Chandigarh), decided on 22.10.2013. The ratio decidendi is that where a similar substantial question of law has been decided by the High Court in favour of the assessee, and the parties in the present reference agree to follow that precedent, the present reference will be disposed of accordingly. The operative direction is to answer the question of law in line with the cited judgment, implying the ITAT's decision that no interest under Section 215 is chargeable is upheld.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal (ITAT) was right in holding that no interest under Section 215 of the Income Tax Act, 1961, is chargeable in this case? Assessee's Contention: The judgment does not record specific arguments made by the assessee. However, the agreement to follow a previous judgment implies the assessee's stance aligns with the favorable outcome in that precedent. Revenue's Contention: The revenue, through its counsel, agreed that a similar question of law had already been answered in favour of the assessee in a prior High Court decision (ITA No.15 of 2012). This agreement suggests the revenue did not press its argument against the ITAT's finding on the chargeability of interest under Section 215.

Which sections of the Income-tax Act were involved?

Section 215

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Order: 07.11.2013 The Commissioner of Income Tax(Central), Ludhiana ...Appellant Versus Avon Cycles Ltd., G.T.Road, Ludhiana. ..Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Ms. Savita Saxena, Advocate for the appellant.

Mr. Ashok Bhan, Advocate and Mr. Alok Mittal, Advocate for the respondent. RAJIVE BHALLA, J (Oral)

The Income Tax Appellate Tribunal has referred the following substantial question of law:- “Whether on the facts and in the circumstances of the case I.T.A.T. was right in holding that no interest u/s 215 is chargeable in this case?”

Counsel for the parties agree that a similar question has already been answered in favour of the assessee in ITA No.15 of 2012 (O&M) (Commissioner of Income Tax-II, Chandigarh v. M/s SAB Industries, Chandigarh), decided on 22.10.2013.

In view of agreement between counsel for the parties, the question of law is answered in terms of judgment in I

The order continues below.

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