COMMISSIONER OF INCOME TAX KARNAL vs. M/S ACCENT FOR LIVING G.T. ROAD PANIPAT

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ITA/164/2011HC Punjab & HaryanaPHHC01095481201106 July 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the matter was covered against the Revenue by its own previous order dated July 28, 2010, in the case of The Commissioner of Income Tax vs. M/s Raj Overseas (ITA No. 225 of 2010). Consequently, the appeal filed by the Revenue was dismissed. The reasoning behind this dismissal is that the High Court had already taken a view on a similar issue, which was binding on this bench. Therefore, the specific arguments regarding the applicability of Supreme Court judgments like Sterling Foods, Liberty India, and Dharmendra Textile Processors, and the interpretation of Section 271(1)(c) and its explanations, were not independently adjudicated in this judgment. The operative direction was the dismissal of the appeal. No issue was expressly left undecided, as the appeal was disposed of on the basis of precedent.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The ITAT's order, dated July 9, 2010, pertained to ITA No. 4154/DEL/2009 for the assessment year 2004-05. The appeal challenged the ITAT's decision to delete a penalty imposed under Section 271(1)(c) of the Act. The penalty was levied on the amount of deduction claimed by the assessee, M/s Accent for Living, under Section 80IB on export incentives. The procedural history leading to this appeal involves the initial assessment, the imposition of penalty by the Assessing Officer, and the subsequent deletion of this penalty by the ITAT, which the Revenue is now challenging before the High Court.

What were the issues?

The Tribunal had to decide the following questions of law: 1. Whether the ITAT was correct in law in deleting the penalty imposed under Section 271(1)(c) on the deduction claimed under Section 80IB on export incentives, considering the Supreme Court's decision in Sterling Foods Vs. CIT (237 ITR 579) which disallowed such deductions, and whether the assessee was filing inaccurate particulars of income. 2. Whether the ITAT's decision to delete the penalty under Section 271(1)(c) is justified in light of the Supreme Court's decision in Liberty India Vs. CIT (317 ITR 218), which re-affirmed the non-allowability of Section 80IB deduction on export incentives. 3. Whether the ITAT's decision to quash the penalty order under Section 271(1)(c) on the ground of no deliberate concealment is justified, especially in view of the Supreme Court's decision in Dharmendra Textile Processors and others (306 ITR 277), where an unsubstantiated explanation could be deemed concealment under Explanation-1(B) of Section 271(1)(c). Contentions: Assessee: The judgment does not record specific contentions made by the assessee. Revenue: The Revenue argued that the assessee had filed inaccurate particulars of income by claiming deduction under Section 80IB on export incentives, which was disallowed by the Supreme Court in Sterling Foods and Liberty India. They contended that the assessee's explanation was unsubstantiated and should be treated as deemed concealment under Explanation-1(B) of Section 271(1)(c), citing Dharmendra Textile Processors.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(c),Section 80IB

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 6.7.2011 The Commissioner of Income Tax -----Appellant. Vs. M/s Accent for Living -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr. Standing counsel for the Revenue. --- ADARSH KUMAR GOEL, ACJ This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Delhi Bench “A”, New Delhi dated 9.7.2010 in I.T.A. No.4154/DEL/2009 for the assessment year 2004-05 proposing following questions of law:- “i) Whether on the facts, and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in deleting the penalty imposed u/s 271(1)(c) on the amount of deduction claimed under Section 80IB on export incentives given the fact that the decision of the Hon'ble Supreme Court in Sterling Foods Vs. CIT dated 15.4.1999 (237 ITR 579) disallowing claim of deduction under Chapter VIA of the Act on export incentives was already available to the assessee at the time of filing of return of income for Asstt. Year 2001-02, and therefore, the assessee was evidently filing inaccurate particulars of income in claiming deduction u/s 80IB on export incentives?” ii) “Whether the decision of the Ld. Income Tax Appellate Tribunal to delete the penalty u/s 271(1)(c) of the Act is justified in the light of the decision of the Hon'ble Supreme Court in Liberty India Vs. CIT (317) ITR 218), whereby the non-allowability of 8-0IB deduction on export incentives has been re-affirmed?” iii) “Whether the decision of the Ld. Income Tax Appellate Tribunal quashing the penalty order u/s 271 (1)(c) on the ground that there is no deliberate concealment is justified in the light of the decision of the Hon'ble Apex Court in Dharmendra Textile Processors and others, 306 ITR 277 (SC), whereas the assessee had offered an explanation which could not be substantiated in the light of te Apex Court judgement referred in question No.(1) and ought to have been taken as deemed concealment within Explanation-1(B) of Section 271 (1)(c) of the Income- tax Act, 1961?” Learned counsel for the appellant fairly states that the matter is covered against the revenue by order of this Court dated 28.7.2010 in The Commissioner of Income Taxc v. M/s Raj Overseas ITA No.225 of 2010. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) ACTING CHIEF JUSTICE July 06, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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