THE COMM. OF INCOME TAX vs. M/S NAVDEEP THEATRE

ITC/99/1999HC Punjab & HaryanaPHHC01038521199912 March 2013Author: MR. JUSTICE HEMANT GUPTA,MS. JUSTICE RITU BAHRI2 pages
AI SummaryDismissed

What were the facts?

This case involves a petition filed by the Commissioner of Income Tax, Amritsar (the Revenue) under Section 256(2) of the Income Tax Act, 1961, challenging an order of the Income Tax Appellate Tribunal, Amritsar Bench. The Tribunal had declined to state a case to the High Court under Section 256(1) of the Act. The dispute pertains to a penalty of Rs. 1,51,912/- imposed by the Assistant Commissioner of Income-Tax on M/s Navdeep Theatre (P) Ltd. (the assessee). The Tribunal's decision was based on a prior judgment of the High Court in CIT vs. Prithpal Singh and Co. (1990) 183 ITR 69, despite the Revenue's contention that a Special Leave Petition against that order was pending before the Supreme Court. The assessee's counsel confirmed that the Supreme Court had subsequently dismissed the SLP, affirming the High Court's judgment.

What did the High Court hold?

The High Court held that no substantial question of law arises from the Tribunal's order. The penalty under Section 271(1)(c) of the Act cannot be imposed because, even after any additions made, the Income Tax Return filed by the assessee was that of a loss. The Court noted that the Tribunal's decision was in line with the High Court's judgment in CIT vs. Prithpal Singh and Co. (1990) 183 ITR 69, which was subsequently affirmed by the Supreme Court in CIT vs. Prithpal Singh and Co (2001) 249 ITR 670. Therefore, the penalty was rightly cancelled by the Tribunal. The operative direction was to dismiss the petition filed by the Revenue.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the provisions of the Explanation to Section 271(1)(c) will not be attracted to the present case? 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the word 'income' occurring in clauses (c) and (iii) of Section 271 refers to a positive income only and not to a loss? 3. Whether, on the facts and circumstances of the case, the Appellate Tribunal is right in cancelling the penalty of Rs.1,51,912/- imposed by the Assistant Commissioner of Income-Tax by holding that no penalty could be levied against the assessee? Assessee's Contentions: The assessee relied on the High Court's judgment in CIT vs. Prithpal Singh and Co. (1990) 183 ITR 69, which was later affirmed by the Supreme Court in CIT vs. Prithpal Singh and Co (2001) 249 ITR 670. The assessee argued that no penalty could be levied as the return filed was of a loss, even after additions made by the Assessing Officer. Revenue's Contentions: The Revenue argued before the Tribunal that a Special Leave Petition against the High Court's judgment in CIT vs. Prithpal Singh and Co. was pending before the Supreme Court. The Revenue sought to have the matter referred to the High Court to decide substantial questions of law.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 256(1),Section 256(2)

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Date of decision: 12.03.2013 The Commissioner of Income Tax, Amritsar ...Petitioner versus M/s Navdeep Theatre (P) Ltd. Amritsar ..Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present:- Mr. Rajesh Katoch, Advocate for the petitioner. M/s Akshay Bhan and Alok Mittal, Advocates, for the respondent. HEMANT GUPTA, J. (ORAL) The present petition under Section 256(2) of the Income Tax Act, 1961 (for short 'the Act') arises out of an order of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for short 'the Tribunal') dated 25.08.1998 claiming the following substantial questions of law:- “1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding: (a) that the provisions of the Explanation to Section 271 (1)(c) will not be attracted to the present case? (b) that the word 'income' occurring in clauses (c) and (iii) of Section 271 refers to a positive income only and not to a loss?

2.

Whether, on the facts and circumstances of the case, the Appellate Tribunal is right in cancelling the pena

The order continues below.

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