C I T vs. M/S HARYANA STATE COOP. SUPPLY AND MKT. FED. LTD.

PDF · subscribers
ITA/428/2008HC Punjab & HaryanaPHHC01080419200828 November 2008Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE L.N. MITTAL3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal's finding that the assessee could not be held to be deliberately attempting to evade tax, and that the assessee had not concealed anything, was not perverse. The court found no substantial question of law arising for consideration. Therefore, the appeal filed by the Revenue was dismissed. The operative direction was the dismissal of the appeal, upholding the ITAT's decision to set aside the penalty. No issue was expressly left undecided.

What were the facts?

The Revenue, Commissioner of Income-tax, Panchkula, has appealed against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, for Assessment Year 1999-2000. The assessee, M/s Haryana State Co-op Supply & Marketing Federation Ltd., Panchkula, filed a return of NIL income. The Assessing Officer (AO) rejected the assessee's claim for exemption, holding that the produce marketed was not grown by its members. The AO also initiated penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961. The Commissioner of Income-tax (Appeals) upheld the penalty. The ITAT, however, set aside the penalty, noting that the assessee had challenged a retrospective amendment and there was a stay, and that there was no concealment or deliberate attempt to evade tax, but rather a bona fide plea of non-levy of tax.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in holding that the Assessing Officer has not recorded reasons or satisfaction before initiating penalty proceedings u/s 271(1)(c)? 2. Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was erred in holding that the penalty u/s 271 (1) (c) of the I. T. Act 1961 is not leviable? Assessee's Contentions: The assessee contended that it had raised a bona fide plea regarding the non-levy of tax and that there was no concealment. The assessee also benefited from a stay order, implying no deliberate attempt to evade tax. Revenue's Contentions: The Revenue argued that the High Court had not granted a stay on the assessment itself, but only on the recovery of arrears, and therefore, the assessee was wrong in claiming exemption.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 260-A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Case No. : I. T. A. No. 428 of 2008 (O&M) Date of Decision : November 28, 2008. The Commissioner of Income-tax, Panchkula .... Appellant Vs.

M/s Haryana State Co-op Supply & Marketing Federation Ltd., Panchkula .... Respondent CORAM : HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE L. N. MITTAL * * * Present : Mr. Yogesh Putney, Senior Standing Counsel for the Revenue. Mr. Rajesh Garg, Advocate for the Assessee. * * * ADARSH KUMAR GOEL, J. (Oral) : C. M. No. 12076-C-II of 2008 : Application is allowed and delay in filing the appeal is condoned. Heard on merits. Main Appeal :

1.

The Revenue has preferred this appeal under Section 260-A of the Income Tax Act, 1961 (for short, the Act) against the order dated 12.03.2007 of the Income Tax Appellate Tribunal, Chandigarh Bench (B), Chandigarh passed in ITA No.342/Chandi/2006 for the Assessment Year 1999-2000, proposing to raise following substantial questions of law :- “a) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT has erred in holding that the Assessing Officer has not recorded reasons or satisfaction before initiating penalty proceedings u/s 271(1)(c) ? b) Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was erred in holding that the penalty u/s 271 (1) (c) of the I. T. Act 1961 is not leviable ?”

2.

The Assessee is a Co-operative Society and as an agent of Government, procures agricultural commodities from the grain markets in Haryana. The Assessee filed return of NIL income. The Assessing Officer rejected the claim for exemption and made the assessment accordingly. The Assessing Officer held that the produce marketed by the Assessee was not grown by its members and thus, the Assessee was not entitled to exemption. The Assessing Officer also initiated penalty. The CIT (A) upheld the penalty. The Tribunal, however, set aside the same holding that the Assessee had challenged the retrospective amendment and there was stay. There was no concealment. The Assessee had raised bona fide plea of non- leviability of the tax.

3.

We have heard learned counsel for the parties and perused the record.

4.

Learned counsel for the Revenue submits that High Court had not granted stay, but had stayed only the recovery of arrears and thus, the assessee wrongly claimed exemption.

5.

The Tribunal, after appreciating the evidence, recorded a finding that the assessee could not be held to be deliberately attempting to evade the tax. The assessee had not concealed anything.

6.

We are unable to hold that finding recorded by the Tribunal is perverse.

7.

No substantial question of law arises for consideration.

8.

The appeal is accordingly dismissed.

(ADARSH KUMAR GOEL) JUDGE November 28, 2008

( L. N. MITTAL ) monika JUDGE

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →