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

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ITA/123/2011HC RajasthanRJHC01043745200905 May 20172 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal, setting aside the order of the Income Tax Appellate Tribunal dated 3.8.2009. The Court restored the order passed by the Commissioner of Income Tax. The reasoning for this decision is that the substantial question of law was examined and answered in a connected appeal, DB Income Tax Appeal No.122/2011, Krishi Upaj Mandi Samiti (Grain), Sriganganagar v. I.T.O. Ward-2, Sriganganagar. The principle derived is that if a claim is debatable and there is no finding of false or incorrect accounts, a penalty under Section 271(1)(c) may not be sustainable. The operative direction is the setting aside of the ITAT's order and restoration of the CIT's order.

What were the facts?

The assessee, Krishi Upaj Mandi Samiti, Raisinghnagar, is in appeal before the High Court against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had restored a penalty imposed upon the assessee under Section 271(1)(c) of the Income Tax Act. The appeal concerns the assessment year(s) not explicitly stated in the provided text. The procedural history indicates that the Commissioner of Income Tax had previously passed an order, which was then modified by the ITAT. The High Court's decision is based on a judgment delivered on the same day in a related appeal, DB Income Tax Appeal No.122/2011.

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 argues that the penalty under Section 271(1)(c) should not have been restored because the claim made was debatable, and there was no finding by the authorities that the assessee had submitted false or incorrect accounts. The implication is that a debatable claim does not warrant a penalty under this section. Revenue's contention: The judgment does not explicitly record the revenue's contentions. However, the ITAT's decision to restore the penalty suggests the revenue likely argued for the imposition of the penalty, possibly based on the findings that led to its initial imposition.

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. 123 / 2011 Krishi Upaj Mandi Samiti, Raisinghnagar ----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-123/2011]

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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