CIT-II, CHANDIGARH vs. M/S CALIFORNIA DESIGN &CONSTRUCTION INC. IND. LTD.

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ITA/554/2009HC Punjab & HaryanaPHHC01084674200904 April 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in view of its common order passed in related appeals (ITA Nos. 400 and 555 of 2009) which allowed the appeals and remanded the matters to the ITAT for fresh decision, set aside the impugned order of the ITAT quashing the penalty under Section 271(1)(c). The High Court allowed the present appeal and remanded the matter back to the ITAT to decide it on merits in accordance with law. The specific reasoning of the ITAT for deleting the penalty and the arguments presented by the assessee were not elaborated upon in this High Court judgment, as the matter was being sent back for a fresh adjudication by the Tribunal.

What were the facts?

The appeal was filed by the Revenue (Commissioner of Income Tax-I) under Section 260A of the Income Tax Act, 1961, against an order dated 27.11.2008 passed by the Income Tax Appellate Tribunal (ITAT). The ITAT's order related to assessment year 2002-03 and had deleted a penalty imposed under Section 271(1)(c) of the Act. The assessee is M/s California Design & Construction INC India Ltd. The Revenue's appeal challenged the ITAT's deletion of the penalty, particularly in light of the assessee allegedly not furnishing its return of income. The High Court noted that similar appeals (ITA Nos. 400 and 555 of 2009) involving the same parties had been allowed and remanded to the ITAT for fresh decision.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT is justified in law in deleting the penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961, especially since the assessee had deliberately not furnished its return of income? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue contended that the ITAT was not justified in deleting the penalty under Section 271(1)(c) of the Act, highlighting that the assessee had deliberately failed to furnish its return of income. The Revenue sought to challenge the ITAT's decision on this ground.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 4.4.2011 The Commissioner of Income Tax-I ....Appellant. Versus M/s California Design & Construction INC India Ltd. ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Senior Standing Counsel, for the appellant. Mr. M.R. Sharma, Advocate for the respondent. AJAY KUMAR MITTAL, J.

1.

Delay in refiling the appeal is condoned.

2.

This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 27.11.2008 passed by the Income Tax Appellate Tribunal, Chandigarh Bench “A”, Chandigarh (hereinafter referred to as “the Tribunal”) in ITA No. 436/Chandi/2008, relating to the assessment year 2002-03, raising the following substantial question of law:- “Whether on the facts and in the circumstances of the case the Hon'ble ITAT is justified in law in deleting the penalty imposed u/s 271(1)(c) of the Income-tax Act, 1961, especially since the assessee -2- had deliberately not furnished its return of income?”

3.

In view of the common order passed in ITA Nos. 400 and 555 of 2009 (The Commissioner of Income Tax-I Vs. M/s California Design & Construction INC India Ltd.) whereby the appeals have been allowed and the matter has been remanded to the Tribunal to decide the same afresh in accordance with law, the order impugned in this appeal quashing the penalty under Section 271(1)(c) of the Act, is also set aside and the present appeal is allowed. The matter is remanded to the Tribunal to decide the same on merits in accordance with law. (AJAY KUMAR MITTAL) JUDGE April 4, 2011 (ADARSH KUMAR GOEL) gbs JUDGE

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