CIT, FARIDABAD vs. ROSHNI DEVI NEW DELHI

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ITA/341/2010HC Punjab & HaryanaPHHC01093265201005 August 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issues involved in the present appeals were identical to those considered in its recent order dated 15.7.2010 in ITA No. 16 of 2010 (Commissioner of Income Tax, Faridabad v. Fateh Singh (HUF)). In that prior decision, the High Court had decided the matter against the revenue. Consequently, following its own precedent, the High Court dismissed the revenue's appeals. The specific reasoning from the prior judgment, which would have addressed the three substantial questions of law regarding the deletion of penalty under Section 271(1)(c) due to deletion of additions, the nature of penalty for civil obligations, and the impact of the Supreme Court's decision in Ghanshyam (HUF), is not detailed in this judgment. The operative direction was the dismissal of the appeals.

What were the facts?

The Revenue (Commissioner of Income Tax, Faridabad) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 15.4.2009 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'C'. The ITAT's order was in relation to ITA No. 80/(Del)/08 for the assessment year 1999-2000. The appeal challenges the deletion of a penalty of Rs. 9,45,701/- levied by the Assessing Officer under Section 271(1)(c) of the Act. The penalty was initially levied on an amount of Rs. 31,83,202/- representing interest on enhanced compensation. The assessee is Smt. Roshni Dev. The High Court noted that similar issues were considered in a recent order dated 15.7.2010 in ITA No. 16 of 2010, which was decided against the revenue.

What were the issues?

The High Court was asked to decide three substantial questions of law: 1. Whether the ITAT's finding that no basis remained for levying penalty after additions were deleted by the CIT(A) was perverse, given that the Assessing Officer/Addl. CIT had confirmed the penalty on interest on enhanced compensation of Rs. 31,83,202/-. 2. Whether the ITAT was correct in deleting the penalty under Section 271(1)(c) even though contravention of a civil statute attracts penalty irrespective of guilty intention, and in contradiction to the Supreme Court's judgment in Union of India vs. Dharmendra Textiles Processors. 3. Whether the ITAT was correct in deleting the penalty under Section 271(1)(c) in light of the Supreme Court's judgment in CIT vs. Ghanshyam (HUF), which held that the year of receipt of enhanced compensation is the year of taxability. The revenue contended that the penalty was leviable as the Assessing Officer had confirmed the amount. The revenue also argued that penalty is leviable for breach of civil obligation irrespective of intention, citing Union of India vs. Dharmendra Textiles Processors. Furthermore, the revenue relied on the Supreme Court's decision in CIT vs. Ghanshyam (HUF) regarding the year of taxability of enhanced compensation. The assessee's arguments are not recorded in the provided text.

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: 5.8.2010 Commissioner of Income Tax, Faridabad ....Appellant. Versus Smt. Roshni Dev ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvash Dhugga, Advocate for the appellant. ADARSH KUMAR GOEL, J.

1.

This order will dispose of ITA Nos. 341 and 342 of 2010 as common questions of law are involved.

2.

ITA No. 341 of 2010 has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against order dated 15.4.2009 passed by the Income Tax Appellate Tribunal, Delhi Bench 'C' New Delhi in ITA No. 80/(Del)/08 for the assessment year 1999-2000 proposing to raise the following substantial questions of law:- “I. Whether, on the facts and in the circumstances of the case, the findings recorded by the Ld.

-2- CIT (A) as confirmed by the Ld. ITAT that additions made in the assessment order on the basis of which penalty for concealment was levied are deleted, there remains no basis at all to levy penalty, are perverse and contrary to the evidence available on record as the penalty was levied by the Assessing Officer on the amount stands finally confirmed as it was confirmed from the Authorized Representative by the Assessing Officer/Addl. CIT Range Head that no further appeal has been filed by the assessee against the decision of Assessing Officer regarding the interest on enhanced compensation at Rs.31,83,202/- [See Annexure - “x”, page 1 to 3]? II. Whether, on the facts and in the circumstances of the case, the Ld. ITAT was right in law in confirming the order of the Ld. CIT (A) in deleting the penalty of Rs.9,45,701/- levied by the Assessing Officer u/s 271 (1)(c) of the Income Tax Act, 1961 even though the penalty is leviable on contravention of the provisions of a civil statute like Income Tax Act and it is settled law that breach of a civil obligation attracts levy of penalty whether the contravention was made by the defaulter with -3- any guilty intention or not and in contradiction to the judgment of the Hon'ble Supreme Court (2008) 306 ITR 277 (SC)? III. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in confirming the order of the Ld. CIT (A) in deleting the penalty of Rs.9,45,701/- levied by the Assessing Officer u/s 271 (1)(c) of the Income Tax Act, 1961 in view of judgment of Apex Court as the entire controversy on the year of taxability of enhanced compensation and interest thereon has now come to rest with the judgment of the Hon'ble Supreme Court in received is the year of taxability?”

3.

We have heard learned counsel for the revenue.

4.

It is not disputed that we have considered the issue in our recent order dated 15.7.2010 in ITA No. 16 of 2010 [The Commissioner of Income Tax, Faridabad v. Fateh Singh (HUF)] and decided the matter against the revenue.

5.

Accordingly, the appeals are dismissed.

-4-

6.

A photo copy of this order be placed on the file of the connected case. (ADARSH KUMAR GOEL) JUDGE August 05, 2010 (AJAY KUMAR MITTAL) gbs JUDGE

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