K.U.M.S.GAJSINGHPUR vs. I.T.O.WARD-2,SRIGANGANAGAR

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ITA/137/2011HC RajasthanRJHC01010570201005 May 20172 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal, setting aside the order passed by the Income Tax Appellate Tribunal dated 3.8.2009. The Court restored the order passed by the Commissioner of Income Tax. The reasoning appears to be based on a prior judgment delivered on the same day in a similar case (DB Income Tax Appeal No.122/2011). The core principle likely followed is that penalty under Section 271(1)(c) cannot be imposed when the assessee's claim is debatable and there is no evidence of concealment of income or furnishing of inaccurate particulars. The ratio decidendi is that a debatable claim, without mens rea for concealment, does not warrant penalty under Section 271(1)(c).

What were the facts?

The assessee, Krishi Upaj Mandi Samiti, Gajsinghpur, is in appeal against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had restored a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The assessee's claim was considered debatable, and there was no finding of false or incorrect accounts. The procedural history involves the Commissioner of Income Tax passing an order, which was then modified by the ITAT. The present appeal challenges the ITAT's decision to restore the penalty.

What were the issues?

1. Whether the Tribunal was justified in restoring the penalty imposed upon the assessee under Section 271(1)(c) when the claim of the assessee was a debatable one and there was no finding that the assessee submitted false or incorrect accounts within the meaning of Section 271(1)(c)? Assessee's contention: The assessee argued that the penalty under Section 271(1)(c) should not have been restored as the claim was debatable and no finding of submitting false or incorrect accounts was made. Revenue's contention: The judgment does not record specific arguments made by the revenue. However, the ITAT's decision to restore the penalty implies the revenue's position was that the penalty was leviable.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 137 / 2011 Krishi Upaj Mandi Samiti, Gajsinghpur ----Appellant Versus I.T.O.Ward-2, Sriganganagar ----Respondent _____________________________________________________ For Appellant(s) : Mr. Rajesh Choudhary For Respondent(s) : Mr. K.K.Bissa _____________________________________________________ HON'BLE MR. JUSTICE GOVIND MATHUR HON'BLE MR. JUSTICE VINIT KUMAR MATHUR

Judgment 05/05/2017 The substantial question of law under adjudication in this appeal is as follows:- “Whether the Tribunal was justified in restoring the penalty imposed upon the assessee under Section 271(1)(c) when the claim of the assessee was a debatable one and there was no finding that assessee submitted false or incorrect accounts within the meaning of Section 271(1)(c)?” The question has already been examined and answered today itself in DB Income Tax Appeal No.122/2011, Krishi Upaj Mandi Samiti (Grain), Sriganganagar v. I.T.O. Ward-2, Sriganganagar.

(2 of 2) [ITA-137/2011]

This appeal is also allowed in terms of the judgment given in DB Income Tax Appeal No.122/2011, Krishi Upaj Mandi Samiti (Grain), Sriganganagar v. I.T.O. Ward-2, Sriganganagar. The order passed by the Income Tax Appellate Tribunal dated 3.8.2009 is set aside. The order passed by the Commissioner of Income Tax stands restored.

(VINIT KUMAR MATHUR)J. (GOVIND MATHUR)J. MathuriaKK/PS

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