C I T vs. M/S RUBBER UDYOG VIKAS P LTD.

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ITA/635/2007HC Punjab & HaryanaPHHC01073353200706 November 2008Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE L.N. MITTAL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the issue raised in this appeal was covered by its earlier judgment in ITA No. 221 of 2006 (Commissioner of Income Tax v. M/s Pearey Lal & Sons (EP) Ltd.) decided on 25.9.2008. Following the precedent set in that case, the High Court allowed the revenue's appeal. The matter was then remanded to the Tribunal for a fresh decision on the issue of penalty, to be decided in accordance with the law. The specific reasoning from the cited precedent was not detailed in this judgment, but the operative direction was to reconsider the penalty issue.

What were the facts?

The Commissioner of Income Tax, Faridabad (the revenue) filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 15.11.2006 passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The ITAT had upheld the order of the Commissioner of Income Tax (Appeals) in deleting a penalty levied by the Assessing Officer under Section 271(1)(c) of the Act. The assessment year in question is 1994-95. The Assessing Officer had recorded his satisfaction for initiating penalty proceedings in the assessment order.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT erred in upholding the order of the learned CIT(A) in deleting the penalty levied by the Assessing Officer under Section 271(1)(c) when the Assessing Officer had recorded his satisfaction for initiation of penalty proceedings under Section 271(1)(c) in the assessment order, in contravention of the order of the Hon'ble Madras High Court in the case of M. Sajjanraj Nahar Vs. CIT (283 ITR 230)? Assessee's Contention: Not recorded in the judgment. Revenue's Contention: The revenue contended that the ITAT erred in upholding the deletion of the penalty under Section 271(1)(c) by the CIT(A), arguing that the Assessing Officer had recorded his satisfaction for initiating penalty proceedings in the assessment order, and that this action was in contravention of the Madras High Court's decision in M. Sajjanraj Nahar Vs. CIT.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.635 of 2007 Date of decision: 6.11.2008 The Commissioner of Income Tax, Faridabad. -----Appellant. Vs. M/s Rubber Udyog Vikas Pvt. Ltd. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. Mr. Rajiv Sharma, Advocate for the respondent. -----

ORDER:

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against order dated 15.11.2006 passed by the Income Tax Appellate Tribunal, Delhi Bench “I”, New Delhi in I.T.A. No.762/DEL/2005 for the assessment year 1994-95, proposing to raise following substantial question of law:- “Whether, on the facts and in the circumstances of the case the Hon’ble ITAT in upholding the order of Ld. CIT(A) in deleting the penalty levied by Assessing Officer u/s 271 (1)(c) when the Assessing Officer had recorded his satisfaction for initiation of penalty proceedings u/s 271(1) (c) in the assessment order in contravention of the order of ITA. No.635 of 2007 the Hon’ble Madras High Court in the case of M. Sajjanraj Nahar Vs. CIT (283 ITR 230).”

Learned counsel for the revenue points out that the said issue has been gone into by this Court in I.T.A. No.221 of 2006 (Commissioner of Income Tax v. M/s Pearey Lal & Sons (EP) Ltd.) decided on 25.9.2008. We have heard learned counsel for the parties.

We find that the issue is covered by the earlier judgment of this Court in M/s Pearey Lal & Sons (supra).

Accordingly, we allow this appeal in the same terms and remand the matter to the Tribunal, on the issue of penalty, for fresh decision in accordance with law. ( ADARSH KUMAR GOEL ) JUDGE November 06, 2008 ( L. N. MITTAL ) ashwani JUDGE 2

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