CIT KARNAL vs. SHAHABAD COOP.SUGAR MILLS LTD. SHAHBAD

ITA/335/2009HC Punjab & HaryanaPHHC01084432200917 December 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What were the facts?

The Revenue, the Commissioner of Income Tax, has filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated October 31, 2008, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh. The appeal pertains to the assessment year 1994-95. The core of the dispute revolves around the deletion of a penalty imposed under Section 271(1)(c) of the Act by the Commissioner of Income Tax (Appeals) and subsequently confirmed by the ITAT. The penalty was levied due to the assessee, The Shahbad Co-op. Sugar Mills Ltd., allegedly furnishing inaccurate particulars of income by making an incorrect claim for deduction under Section 80P(2)(a)(iii). The amount in dispute is not explicitly stated. The procedural history involves the initial imposition of penalty, its deletion by the CIT(A), and confirmation by the ITAT.

What did the High Court hold?

The High Court held that the appeal filed by the Revenue against the ITAT's order was dismissed. The Court noted that an appeal by the Revenue on identical questions, specifically I.T.A. No.19 of 2007, The Commissioner of Income Tax, Karnal v. The Shahbad Coop. Sugar Mills Limited, had already been dismissed. Therefore, following the precedent set by the dismissal of the earlier identical appeal, the present appeal was also dismissed. The reasoning for the dismissal is based on judicial discipline and the principle of consistency, as the same issue concerning the deletion of penalty under Section 271(1)(c) for the assessment year 1994-95, involving a deduction under Section 80P(2)(a)(iii), had been decided against the Revenue in a prior appeal. The operative direction is the dismissal of the appeal. No issue was expressly left undecided.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the ITAT was legally correct in confirming the order of the CIT(A) which deleted the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, despite the assessee furnishing inaccurate particulars of income by making a wrong claim for deduction under Section 80P(2)(a)(iii), even when judicial pronouncements against such a deduction were available at the time of assessment proceedings? 2. Whether, on the facts and in the circumstances of the case, the ITAT was legally correct in confirming the order of the CIT(A) which deleted the penalty under Section 271(1)(c) of the Income Tax Act, 1961, in light of the Supreme Court's decision in Union of India and others Vs. Dharmendra Textiles Processors and others, dated September 29, 2008, reported in [2008] 306 ITR 277 (SC)? Contentions of the Revenue: The Revenue argued that the assessee had furnished inaccurate particulars of income by making a wrong claim for deduction under Section 80P(2)(a)(iii), and judicial pronouncements were available against this claim at the time of assessment. The Revenue also relied on the Supreme Court's decision in Dharmendra Textiles Processors and others to support its contention for imposing the penalty. Contentions of the Assessee: The judgment does not record specific contentions made by the assessee. However, the fact that the CIT(A) deleted the penalty and the ITAT confirmed this deletion implies that the assessee's position was accepted by these authorities.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 271(1)(c),Section 80P(2)(a)(iii)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 17.12.2010 The Commissioner of Income Tax. -----Appellant. Vs. The Shahbad Co-op. Sugar Mills Ltd. -----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 appellant. Mr. S.K. Mukhi, Advocate and Ms. Jyoti, Advocate for the respondent. --- ADARSH KUMAR GOEL, J.

The revenue has preferred this appeal under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 31.10.2008 of the Income Tax Appellate Tribunal, Chandigarh in I.T.A. No.781/CHANDI/2008 for the assessment year 1994-95 claiming following substantial questions of law:- “1. Whether on the facts and in the circumstances of the case, the Ld. ITAT was right in law in confirming the order of CIT(A), deleting the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961, ignoring the fact that the assessee had furnished inaccurate particulars of income by making wrong claim of deduction u/s 80P(2)(a)(iii), even as judicial pronouncements were available against the d

The order continues below.

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