CIT, CHANDIGARH vs. M./S CHANDIGARH ZEVER MEHAL PVT. LTD.

PDF · subscribers
ITA/70/2010HC Punjab & HaryanaPHHC01093662201015 February 2010Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals filed by the Revenue failed and were dismissed. The Court found that the findings of the Tribunal, which affirmed the deletion of penalties by the CIT(A), were concurrent findings of fact. These findings were based on evidence, specifically that there was no evidence to suggest the assessee's claim of bad debts was not bona fide or that there was an intention to evade tax, as the claimed bad debts were not set off against any income. The Court reasoned that such concurrent findings of fact are not open to interference by the High Court. Consequently, no substantial question of law arose for determination, making the appeals non-admissible. The operative direction was the dismissal of both appeals.

What were the facts?

The Commissioner of Income Tax-I, Chandigarh (Revenue) filed two appeals before the High Court of Punjab and Haryana at Chandigarh. These appeals challenged a composite order dated April 24, 2009, passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A'. The appeals pertained to assessment year 2006-07 and concerned two assessees: M/s. Chandigarh Zever Mehal Pvt. Ltd. and M/s. Prince Zever Mehal Pvt. Ltd. The core of the dispute revolved around the deletion of penalties amounting to Rs. 22,64,168 and Rs. 17,46,606, respectively, by the CIT(A) and affirmed by the Tribunal. The penalties were related to claimed bad debts.

What were the issues?

1. Whether the Tribunal erred in upholding the deletion of penalty under Section 271(1)(c) of the Income Tax Act, 1961, when the assessee claimed bad debts without any benefit derived from such claim and without any intention to evade tax. Assessee's Contention: The judgment does not record any specific arguments made by the assessee before the High Court. However, the reasoning of the Tribunal, as reflected in the judgment, indicates that the deletion of penalty was upheld because there was no evidence that the claim of bad debts was not bona fide, and there was no intention of evading tax as the bad debts were not set off against any income. The penalty is not leviable automatically, and the Assessing Officer must show inaccurate particulars of income or concealment. Revenue's Contention: The Revenue argued that the penalties were wrongly deleted. The judgment does not explicitly detail the Revenue's arguments beyond the fact that they are challenging the Tribunal's order. The High Court's observation suggests the Revenue's appeals were based on a perceived question of law arising from the Tribunal's decision.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

I.T.A. No. 70 of 2010 Date of Decision: February 15, 2010

The Commissioner of Income tax-I Chandigar ----Appellant Versus M/s. Chandigarh Zever Mehal Pvt. Ltd. Shop No. 8-9, Sec. 20-C Chandigarh ---Respondent I.T.A. No. No. 71 of 2010 The Commissioner of Income tax-I Chandigar ----Appellant Versus M/s. Prince Zever Mehal Pvt. Ltd. Booth No. 47, Sec. 19-C Chandigarh ---Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Urvashi Dhugga, Advocate for the appellant.

1.

To be referred to the Reporters or not?

2.

Whether the judgment should be reported in the Digest? **** M.M. KUMAR, J. Revenue has approached this court challenging the composite order dated 24.04.2009 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (for brevity 'the Tribunal') in ITA Nos. 110 & 111/Chd/2009 in respect of the assessment year 2006-07. Therefore, both the appeals bearing I.T.A. Nos. 70 and 71 of 2010 are -2- being disposed of jointly. The findings recorded by the CIT(A) in its order dated 28.11.2008 as affirmed by the Tribunal in the impugned order are categorical that penalty of Rs. 22,64,168 and Rs. 17,46,606 has been rightly deleted because no benefit has been claimed by the assessee-respondent by virtue of claimed bad debts. In para 4 it has been found that there was no evidence on record that the claim of the assessee was not bona fide and there was no intention of evading tax by the assessee because the claimed bad debts has not been set off against any income. Accordingly, it has been held that penalty is not leviable automatically because Assessing Officer is supposed to show inaccurate particulars of income or concealment of two incomes by the assessee. Having heard learned counsel for the appellant, we find that these are concurrent findings of fact, which would not be open to interference of this Court. These findings of fact are necessarily based on evidence and both the appeals do not warrant admission because no question of law much less a substantive question of law would arise for determination of this Court. Accordingly, both the appeals fail and are hereby dismissed. A photocopy of this order be placed on the record of connected appeal. (M.M. KUMAR)

Judge

(JITENDRA CHAUHAN) 15th February, 2010

Judge Atul

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →