C I T vs. M/S AMAR SINGH KULWANT SINGH

ITA/416/2008HC Punjab & HaryanaPHHC01080406200823 December 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryRemanded

What were the facts?

The Revenue (Commissioner of Income Tax) filed appeals against the Income Tax Appellate Tribunal's (ITAT) order concerning assessment year 1991-92. The ITAT had deleted a penalty of Rs. 73,218 imposed under Section 271(1)(c) of the Income Tax Act, 1961. The Assessing Officer (AO) had made additions to the assessee's declared income, which were sustained by higher authorities. While passing the assessment order, the AO noted that the assessee had furnished inaccurate particulars and directed the initiation of penalty proceedings. The penalty was subsequently levied. The Commissioner of Income Tax (Appeals) [CIT(A)] had set aside the penalty solely on the ground that the AO failed to record specific satisfaction for its levy.

What did the High Court hold?

The High Court held that the ITAT's order deleting the penalty could not be sustained. The Court reasoned that the recording of satisfaction for initiating penalty proceedings is a matter of substance. When additions were made to the income and a direction for initiation of penalty was issued in the assessment order, it could not be held that no satisfaction had been recorded. The Court referred to its previous decisions in CIT v. Pearey Lal & sons (EP) Ltd. and CIT v. Nakodar Co-operative Sugar Mills Pvt. Ltd., which held that the AO's satisfaction was evident from the assessment order itself when additions were made and penalty proceedings were directed. The questions of law were answered in favour of the revenue. The appeals were allowed, and the matter was remanded to the CIT(A) for a fresh decision on the issue in accordance with the law. The operative direction was to remand the case to the CIT(A).

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the penalty of Rs.73,218/- imposed under section 271(1)(c) of the Income Tax Act, 1961? (Question of law) 2. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in holding that no satisfaction for initiation of penalty proceedings was recorded by the AO in the assessment order when the finding regarding the furnishing of inaccurate particulars of income had been elaborately given in the assessment order in a detailed manner? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that the ITAT was wrong in deleting the penalty. They contended that the AO had recorded satisfaction for initiating penalty proceedings, as evidenced by the detailed findings regarding inaccurate particulars in the assessment order. The revenue relied on the High Court's decisions in CIT v. Pearey Lal & sons (EP) Ltd. [2009] 308 ITR 438 and CIT v. Nakodar Co-operative Sugar Mills Pvt. Ltd. (order dated 25.9.2010 in I.T.A. No.441 of 2007).

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.416 of 2008 & connected case being I.T.A. No.565 of 2008 Date of decision: 23.12.2010 The Commissioner of Income Tax. -----Appellant. Vs. M/s Amar Singh Kulwant Singh. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Vivek Sethi, Standing Counsel for the appellant. Mr. G.R. Sethi, Advocate for the respondent in I.T.A. No.565 of 2008. --- ADARSH KUMAR GOEL, J.

1.

This order will dispose of I.T.A. Nos.416 and 565 of 2008 as according to the appellant, both the appeals involve common questions.

2.

I.T.A. No.416 of 2008 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, Amritsar in I.T.A. No.138(ASR)/2007 for the assessment year 1991-92 claiming following substantial questions of law:- “1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the penalty

I.T.A. No.416 of 2008 of Rs.73,218/- imposed under section 271(1)(c) of the Income Tax Act, 1961?

2.

Whether, on the facts and in the circumstanc

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 271(1)(c)

All 24,918 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →