C.I.T. BIKANER vs. KRISHI UPAJ MANDI SAMITI FandV

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ITA/159/2014HC RajasthanRJHC01026878201419 February 2015Author: GOVIND MATHUR,P.K. LOHRA2 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, was wrongly levied and rightly deleted. The reasoning was that the penalty provision is applicable only in cases of concealment of income or furnishing inaccurate particulars of income. Since the additions to the assessee's income, which formed the basis for the penalty, had already been deleted by the Tribunal, it logically followed that no taxable income existed for the assessee for that assessment year. Therefore, there was no concealment or inaccurate furnishing of particulars that would warrant a penalty. The Tribunal found no substantial question of law warranting interference and dismissed the appeal.

What were the facts?

The Income Tax Appellate Tribunal (ITAT) had previously deleted additions to the income of the respondent, Krishi Upaj Mandi Samiti, for assessment year 2008-09. Following this deletion, the Assessing Officer imposed a penalty under Section 271(1)(c) of the Income Tax Act, 1961, based on the original additions. The Commissioner of Income Tax affirmed this penalty. The ITAT, in the impugned order dated 25.2.2014, again deleted the penalty, reasoning that no penalty could be imposed as no taxable income existed for the assessee.

What were the issues?

1. Whether the Tribunal was justified in deleting the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, when the additions forming the basis of the penalty had themselves been deleted. Assessee's Contention: The assessee argued that since the additions to its income were deleted by the Tribunal, there was no basis for imposing a penalty for concealment of income or furnishing inaccurate particulars, as no taxable income existed. Revenue's Contention: The revenue contended that the penalty was leviable based on the initial additions made by the Assessing Officer, which were later deleted by the Tribunal. The revenue appears to have argued that the penalty proceedings were independent of the deletion of additions.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

1 D.B. INCOME TAX APPEAL NO.159/2014 Commissioner of Income Tax, Bikaner Vs. Krishi Upaj Mandi Samiti (F&V) Dhan Mandi, Sriganganagar DATE OF ORDER :: 19.2.2015 HON'BLE MR. JUSTICE GOVIND MATHUR HON'BLE MR. JUSTICE P.K. LOHRA Mr. K.K. Bissa ] Mr. Hargovind Chanda ], for the appellant ... By accepting an appeal, the additions in income of the respondent-Krishi Upaj Mandi Samiti for the assessment year 2008-09 were deleted by the Income Tax Appellate Tribunal. The Assessing Officer subsequent thereto imposed penalty upon the assessee as per provisions of Section 271(1)(c) of the Income Tax Act, 1961 by taking into consideration the additions made. The penalty imposed was affirmed by the Commissioner of Income Tax. The Income Tax Appellate Tribunal by the order impugned dated 25.2.2014 deleted the penalty imposed by arriving at the conclusion that there is no question of imposing any penalty as per provisions of Section 271(1)(c) of the Income Tax Act, 1961 as no taxable income exists. The penalty as per the provision aforesaid can be imposed in the event of concealment of income or on furnishing inaccurate particulars of income. In the case in hand, as already stated taxable liability of the respondent-assessee has already been deleted, therefore, we do not find any wrong in deleting the penalty

2 too. The appeal, as such, does not involve any substantial question of law that may warrant interference in appellate jurisdiction.

The appeal is dismissed accordingly. [P.K. LOHRA], J. [GOVIND MATHUR], J. a.asopa/-

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