C I T vs. MUNIM

PDF · subscribers
ITA/50/2008HC Punjab & HaryanaPHHC01080498200805 January 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL11 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals filed by the revenue. The Court noted that the revenue's counsel fairly stated that the assessee's plea regarding the year in which the income was to be taxed was debatable. In similar circumstances, the setting aside of penalty had already been upheld by the same Court in a previous judgment dated 15.7.2010 in ITA No. 16 of 2010 (The Commissioner of Income Tax, Faridabad v. Fateh Singh (HUF)). Therefore, even if question (a) claimed by the revenue were to be answered in its favour, questions (b) and (c) would have to be answered against the revenue. Consequently, the appeals were dismissed. The specific findings on each of the revenue's claimed substantial questions of law were not explicitly detailed, but the dismissal was based on the principle that penalty should not be levied when the assessee's claim is debatable and upheld in similar prior cases.

What were the facts?

The revenue (Commissioner of Income Tax, Faridabad) appealed against an order dated 18.4.2007 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 04(Del)2006, for assessment year 1997-98. The assessee, Shri Munim, had received compensation for land acquisition, and enhanced compensation was taxed as capital gain. A penalty was also levied. The CIT(A) deleted the penalty, holding that the assessee had not concealed income but had taken a bonafide plea regarding the finality of enhanced compensation disbursement. The Tribunal upheld the CIT(A)'s view, also noting the Assessing Officer's failure to record satisfaction for penalty levy. The High Court consolidated multiple appeals involving common questions of law.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in confirming the order of the Ld. CIT(A) who deleted the penalties levied by Assessing Officer u/s 271(1)(c) in contravention of the order of the Hon'ble Madras High Court in the case of M. Sajjanraj Nahar Vs. CIT (283 ITR 230), when the Assessing Officer had recorded initiation of penalty proceedings u/s 271(1)(c) in the assessment order? (Question of law) 2. Whether the Hon'ble ITAT erred in deciding that providing contumacious intent is an essential ingredient in levy of penalty in contravention of the provisions of a Civil Statute like Income Tax Act, in spite of there being so many judgments that breach of a Civil obligation attracts levy of penalty whether the contravention was made by the defaulter with any guilty intention or not? (Question of law) 3. Whether the order of the Hon'ble ITAT is in contravention of the many judicial pronouncements including Thirupathy Kumar Khemka Vs. Commissioner of Income Tax 210 CTR 287 (Mad)? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Assessing Officer had properly recorded satisfaction for penalty levy, citing Commissioner of Income Tax v. Pearay Lal and Sons, [2009] 308 ITR 438. However, the revenue conceded that the assessee's plea regarding the year of taxation was debatable, and setting aside of penalty in similar circumstances was upheld by this Court in Commissioner of Income Tax, Faridabad v. Fateh Singh (HUF) vide judgment dated 15.7.2010 in ITA No. 16 of 2010.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

-1- Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Munim ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. Mr. S.K. Mukhi, Advocate with Ms. Jyoti, Advocate for the respondent, in ITA Nos. 50, 222 and 249 of 2008. 1. This order will dispose of ITA Nos. 50, 222, 249, 311 to 313, 334, 336 and 379 of 2008 as it has been stated by learned counsel for the revenue that common questions of law are involved in the appeals.

2.

ITA No.50 of 2008 has been preferred by the revenue under Section 260A of the Income Tax Act, 1941 against order dated 18.4.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench “G”, Delhi (in short “the Tribunal”) in ITA No. 04(Del)2006, for the assessment year 1997-98, claiming following substantial questions of law:- “a. Whether, on the facts and in the circumstances of the -2- case, the Hon'ble ITAT was right in law in confirming the order of the Ld. CIT(A) who deleted the penalties levied by Assessing Officer u/s 271(1)(c) in contravention of the order of the Hon'ble Madras had recorded initiation of penalty proceedings u/s 271(1)(c) in the assessment order? b. That the Hon'ble ITAT erred in deciding that providing contumacious intent is an essential ingredient in levy of penalty in contravention of the provisions of a Civil Statute like Income Tax Act in spite of there being so many judgments that breach of a Civil obligation attracts levy of penalty whether the contravention was made by the defaulter with any guilty intention or not? c. That the order of the Hon'ble ITAT is in contravention Income Tax 210 CTR 287 (Mad)?”

3.

The assessee received compensation under the provisions of Land Acquisition Act, 1894 in view of acquisition of his land for public purpose. Enhanced compensation was subjected to tax as capital gain and in addition penalty was also levied. The CIT(A) set aside the levy of penalty holding that the assessee had not concealed the particulars of income but had only taken a bonafide plea that the disbursement of -3- enhanced compensation had not become final. The Tribunal upheld the view of the CIT(A). The Tribunal also observed that the Assessing Officer had failed to record satisfaction for levy of penalty as required under the law.

4.

We have heard learned counsel for the parties.

5.

Learned counsel for the revenue submits that satisfaction was properly recorded and in this regard the contention of the revenue is supported by the view taken by this Court in Commissioner of Income Tax v. Pearay Lal and Sons, [2009] 308 ITR 438. However, she fairly states that the plea of the assessee being debatable as to the year in which the income was to be taxed, the setting aside of penalty was upheld in similar circumstances by this Court vide judgment dated 15.7.2010 in ITA No. 16 of 2010 [The Commissioner of Income Tax, Faridabad v. Fateh Singh (HUF)].

6.

In view of the fact that setting aside of penalty has already been upheld in similar cases, referred to above, even if question (a) claimed by the revenue is to be answered in its favour, questions (b) and (c) have to be answered against the revenue and the appeals have to be dismissed.

7.

Accordingly, the appeals are dismissed. (ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -4- ITA No. 222 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Munim ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. Mr. S.K. Mukhi, Advocate with Ms. Jyoti, Advocate for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -5- ITA No. 249 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Munim ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. Mr. S.K. Mukhi, Advocate with Ms. Jyoti, Advocate for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -6- ITA No. 311 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Trilok Singh ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. None for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -7- ITA No. 312 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Trilok Singh ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. None for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -8- ITA No. 313 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Trilok Singh ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. None for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -9- ITA No. 334 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Satyavir Singh (HUF) ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. None for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -10- ITA No. 336 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Satyavir Singh (HUF) ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. None for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE -11- ITA No. 379 of 2008 Date of Decision: 5.1.2011 Commissioner of Income Tax, Faridabad ....Appellant. Versus Shri Satyavir Singh (HUF) ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. None for the respondent.

(ADARSH KUMAR GOEL) JUDGE January 5, 2011 gbs JUDGE

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →