COMMISSIONER OF INCOME TAX vs. SUMITRABEN J THAKKAR

ITR/117/1995HC GujaratGJHC24022442199526 September 2006Author: HONOURABLE MR. JUSTICE D.H.WAGHELA,HONOURABLE MR. JUSTICE R.S.GARG5 pages
AI SummaryRemanded

What were the facts?

The Commissioner of Income Tax (Revenue) has filed an Income Tax Reference before the High Court of Gujarat at Ahmedabad, arising from an order of the Income Tax Appellate Tribunal (ITAT), Ahmedabad Bench 'C'. The reference pertains to Assessment Year 1982-83 and concerns a penalty levied under Section 271(1)(a) of the Income Tax Act, 1961. The assessee, an individual, filed her return late. The Assessing Officer initiated penalty proceedings, which were confirmed by the CIT(Appeals) who reduced the penalty on the ground that penalty for an overlapping period could not be levied. The ITAT upheld the CIT(Appeals)'s order. The Revenue is aggrieved by the ITAT's decision to delete the penalty on this ground.

What did the High Court hold?

The High Court, respectfully agreeing with its previous judgments in Commissioner of Income Tax Vs. Ambica Cement Products and C.I.T. Vs. Nathiben R. Patel, held that the Tribunal was not justified in deleting the penalty for the overlapping period. The Court reasoned that the lapse is in relation to the return for the current year, and the subsequent default is an independent default. The principle of double jeopardy was deemed inapplicable. However, the Court directed the Tribunal to re-decide the matter after giving adequate opportunity of hearing to the parties. The Tribunal is to record an independent finding as to whether the assessee was prevented by a reasonable cause from filing the return of income by the due date. If such an opinion is recorded, the Tribunal shall pass orders accordingly. The Reference stands disposed of.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in deleting the penalty levied u/s.271(1)(a) on the ground that the penalty for an overlapping period cannot be levied? Assessee's Contention (as understood from the facts and the CIT(Appeals)'s reasoning): The assessee argued that the late filing of the return for the current year was due to circumstances beyond her control, specifically the inability to file the return for the earlier year on time. She contended that imposing a penalty for an overlapping period would amount to double jeopardy. Revenue's Contention: The Revenue argued, citing judgments in Commissioner of Income Tax Vs. Ambica Cement Products and C.I.T. Vs. Nathiben R. Patel, that the lapse is in relation to the return for the current year, not the earlier year. They contended that the principle of double jeopardy is not applicable as the subsequent default is an independent default. The Tribunal was not justified in reducing the penalty on this ground.

Which sections of the Income-tax Act were involved?

Section 271(1)(a),Section 139(1)

AI-generated summary — verify with the full judgment below

ITR/117/1995 1/5 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No. 117 of 1995 For Approval and Signature: HONOURABLE MR.JUSTICE R.S.GARG HONOURABLE MR.JUSTICE D.H.WAGHELA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME TAX - Applicant(s) Versus SUMITRABEN J THAKKAR - Respondent(s) ========================================================= Appearance : MRS. MONA M BHATT for Applicant None for Opponent ========================================================= CORAM : HONOURABLE MR.JUSTICE R.S.GARG and HONOURABLE MR.JUSTICE D.H.WAGHELA Date : 26/09/2006 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE R.S.GARG)

ITR/117/1995 2/5 JUDGMENT

1.

Income Tax Appellate Tribunal, Ahm

The order continues below.

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