COMMISSIONER OF INCOME TAX, KARNAL vs. VIRENDER KUMAR JAIN

ITA/800/2010HC Punjab & HaryanaPHHC01093773201013 January 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryDismissed

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT), New Delhi, dated February 18, 2010. The ITAT had deleted a penalty imposed under Section 271(1)(c) of the Act. The penalty was levied on the amount of deduction claimed by the assessee, Sh. Virender Kumar Jain, under Section 80IB on export incentives. The assessment year in question is 2002-03. The appeal was filed proposing to raise substantial questions of law.

What did the High Court hold?

The High Court held that the appeal was covered against the Revenue by its own earlier order dated July 28, 2010, in ITA No. 225 of 2010, CIT v. M/s Raj Overseas. Consequently, the appeal filed by the Revenue was dismissed. The reasoning behind the dismissal was that the present case was on all fours with the cited precedent, which had already decided the issue in favor of the assessee. Therefore, the ITAT's decision to delete the penalty under Section 271(1)(c) was upheld implicitly by dismissing the Revenue's appeal. No specific findings were recorded on the merits of the substantial questions of law as framed by the Revenue, as the appeal was disposed of on the basis of the binding precedent. No issue was expressly left undecided.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was correct in deleting the penalty 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) was available at the time of filing the return, suggesting the assessee filed 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 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, given the Supreme Court's ruling in Dharmendra Textile Processors and others (306 ITR 277), where an unsubstantiated explanation should be deemed concealment under Explanation 1(b) to Section 271(1)(c). The Revenue argued that the assessee had filed inaccurate particulars of income by claiming deduction under Section 80IB on export incentives, relying on the Supreme Court decisions in Sterling Foods and Liberty India. The Revenue also contended that the assessee's explanation was unsubstantiated, leading to deemed concealment as per Dharmendra Textile Processors. The judgment records no specific arguments made by the assessee.

Which sections of the Income-tax Act were involved?

Section 260-A,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. I.T.A. No.800 of 2010 (O&M) Date of decision: 13.1.2011 The Commissioner of Income Tax. -----Appellant. Vs. Sh. Virender Kumar Jain. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr.Standing counsel for the Revenue. --- ADARSH KUMAR GOEL, J.

1.

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, New Delhi dated 18.2.2010 in I.T.A. No.4151/DEL/2009 proposing to raise following substantial questions of law:- “i) Whether on the facts, and in the circumstances of the case, the Ld. Income Tax Appellate Tribunal was right in law in deleting the penalty imposed u/s 271(1)(c) on the amount of deduction claimed u/s 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 20

The order continues below.

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