CIT, FARIDABAD vs. NATHI RAM DAGAR

In the High Court of Punjab and Haryana, Chandigarh.

Date of Decision: 29.01.2009 Commissioner of Income Tax, Faridabad

....Appellant. Versus Nathi Ram Dagar ....Respondent.

Coram:- Hon'ble Mr.Justice J.S. Khehar Hon'ble Mr. Justice Nawab Singh Present: Mr. Yogesh Putney, Advocate for the appellant. Mr. Avneesh Jhingan, Advocate for the respondent.

... J.S. Khehar, J. (Oral). The Revenue has filed the instant appeal against the determination rendered by the Income Tax Appellate Tribunal vide its order dated 30.11.2007, pressing the following issues: -- “(i) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in law in confirming the order of the Ld. CIT (A) in deleting the penalty of Rs.5,58,175/- on the ground that the Assessing Officer has nowhere recorded his satisfaction for the concealment of particulars or furnishing of inaccurate particulars of income in respect of the impugned additions, when the Assessing Officer had recorded directions for initiation of penalty proceedings u/s 271(1)(c) in the assessment order, in view of sub-section (1B) of Section 271 inserted by the Finance Act 2008 with retrospective effect from 1.4.1989 ? (ii) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in holding that in case of any debatable issue, penalty provisions are not attracted disregarding the fact that the assessee concealed particulars of income, thus reducing the taxable income?” So far as the first issue is concerned, it is conceded by the learned counsel for the respondent – assessee, that the question of satisfaction raised in the first issue stands decided in favour of the Revenue in Commissioner of Income Tax Vs. M/s. Pearey Lal and Sons (EP) Ltd. (ITA No.221 of 2006, decided on 25.9.2008). Learned counsel for the parties are agreed, that the second issue pressed at the hands of the learned counsel for the appellant remained undecided on account of the fact, that the Income Tax Appellate Tribunal had determined the issue of satisfaction in favour of the respondent – assessee. Thus viewed, learned counsel for the parties are agreed, that the controversy in the instant appeal limited to the second issue, noticed hereinabove, be remanded back to the Income Tax Appellate Tribunal for fresh determination, in accordance with law. In view of the above, the impugned order dated 30.11.2007 rendered by the Income Tax Appellate Tribunal, is hereby set aside. Parties are relegated to appear before the Income Tax Appellate Tribunal on 2.3.2009. The instant appeal stands disposed of in the aforesaid terms. ( J.S. Khehar ) Judge ( Nawab Singh ) Judge. 29.01.2009 sk.