C.I.T. BIKANER vs. KRISHI UPAJ MANDI SAMITI, KESRISINGHPUR

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ITA/165/2014HC RajasthanRJHC01026929201418 February 2015Author: GOVIND MATHUR,P.K. LOHRA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal was correct in deleting the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The reasoning was that the penalty can only be imposed in cases of concealment of income or furnishing of inaccurate particulars of income. Since the taxable income of the respondent-assessee had already been deleted by the Tribunal, there was no basis for imposing a penalty. The Court found no error in the Tribunal's decision to delete the penalty, as the penalty proceedings were predicated on additions that were subsequently nullified. Consequently, the appeal did not involve any substantial question of law warranting interference. The operative direction was the dismissal of the appeal.

What were the facts?

The Commissioner of Income Tax (CIT), Bikaner, is the appellant, and Krishi Upaj Mandi Samiti, Kesrisinghpur, is the respondent-assessee. The assessment year in question is 2008-09. The Income Tax Appellate Tribunal (ITAT) had previously deleted additions to the assessee's income. 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 CIT affirmed this penalty. The ITAT, by its order dated 25.2.2014, deleted the penalty, holding that no penalty could be imposed as there was no taxable income.

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 to the assessee's income, which formed the basis of the penalty, had themselves been deleted. The Revenue's contention is that the penalty was levied based on the additions made by the Assessing Officer, and the subsequent deletion of these additions by the Tribunal does not negate the initial concealment or furnishing of inaccurate particulars. The Revenue argues that the penalty proceedings are independent of the assessment proceedings. The judgment does not record specific arguments from the assessee regarding this issue, but it is implied that the assessee would have argued that no penalty can be sustained if the underlying additions are deleted.

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 JUDICATURE FOR RAJASTHAN AT JODHPUR JUDGMENT D.B. INCOME TAX APPEAL NO.165/2014 DATE OF JUDGMENT :: 18.2.2015 PRESENT HON'BLE MR. JUSTICE GOVIND MATHUR HON'BLE MR. JUSTICE P.K. LOHRA Mr. KK Bissa, 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

2 taxable liability of the respondent-assessee has already been deleted, therefore, we do not find any wrong in deleting the penalty 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. Sanjay

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