DEPUTY COMMISSIONER OF INCOME TAX vs. KRISHNA TEXTILES

TAXAP/783/2006HC GujaratGJHC24037769200620 November 2014Author: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER3 pages
AI SummaryDismissed

Facts

The appeals were filed by the Revenue, the Deputy Commissioner of Income Tax, against an order dated 18.10.2005 passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad Bench. The ITAT's order pertained to ITA Nos. 766/Ahd/1998, 767/Ahd/1998, and 812/Ahd/1998, concerning the assessee, Krishna Textiles. The High Court admitted these appeals on 15.11.2006 and framed a substantial question of law. The dispute involves a penalty imposed by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeals). The revenue effect in these appeals was stated to be less than Rs. 1 lakh.

Held

The High Court dismissed the appeals filed by the Revenue. The Court noted that the amount involved and the revenue effect were small, less than Rs. 1 lakh. Citing CBDT Instruction No. 1979 dated 27th March, 2000 and 02 of 2005, the Court held that the Revenue ought not to have filed appeals where the total revenue effect is less than Rs. 1 lakh. Consequently, the appeals were not entertained and were dismissed on the ground of the smallness of the amount. The questions of law were answered in favour of the assessee and against the revenue. Liberty was granted to the Revenue to revive the appeals in case of difficulty. No specific finding was given on the substantial question of law framed.

Key Issues

1. Whether, on the facts and in the circumstances of the case, and in law, the Income Tax Appellate Tribunal is right in deleting penalty imposed by the Assessing Officer and upheld by the Commissioner of Income Tax (Appeals) – II, Surat, without considering the provisions of Explanation -1 to Section 271(1) of the Income Tax Act? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the ITAT was wrong in deleting the penalty without considering Explanation 1 to Section 271(1) of the Income Tax Act. The Revenue relied on the fact that the penalty was initially imposed by the Assessing Officer and then upheld by the Commissioner of Income Tax (Appeals).

Sections Cited

Section 271(1)

AI-generated summary — verify with the full judgment below

O/TAXAP/782/2006 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 782 of 2006 TO TAX APPEAL NO. 784 of 2006

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER

================================================================ 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 ? ================================================================ DEPUTY COMMISSIONER OF INCOME TAX....Appellant(s) Versus KRISHNA TEXTILES....Opponent(s) ================================================================ Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================

The order continues below.

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