C.I.T., KARNAL vs. RAJ RANI

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Date of decision: 28.04.2008 The Commissioner of Income Tax, Karnal ..... Appellant-revenue Versus Smt. Raj Rani c/o M/s Shiv Shankar, Rice Mills, Kaithal ..... Respondent-assessee CORAM: HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE RAKESH KUMAR GARG Present:- Mr. Sanjiv Kaushik, Advocate for the appellant-revenue. RAKESH KUMAR GARG, J. The revenue has filed the present appeal under Section 260-A of the Income-Tax Act, 1961 ( hereinafter referred to as the “I.T. Act” ) against the order dated 05.04.2007 passed by the Income-Tax Appellate Tribunal, Chandigarh, Bench-'B' ( hereinafter called the Tribunal ) in I.T.A. No. 593/Chandi/2006 for the assessment year 2004- 05,raising the following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Ld. ITAT was right in upholding the order of the CIT(A), against imposition of penalty u/s 271(1)(c) of the Income Tax Act, 1961, without deliberating upon, discussing and analysing the reasons, as spelt out and discussed in para 4 of the penalty order and relying on the after thought considered by the Ld. CIT (A), while deleting the penalty imposed under Section 271 (1)(c) of the Income Tax Act.” The return declaring an income at Rs. NIL was filed by the assessee on 31.10.2004, which was processed under Section 143(1) of the I.T. Act. The case was picked up for scrutiny and it was found that the assessee had claimed profit on sale of shares, which was purchased by her on 06.09.2002, for exemption under Section 10(36) of the I.T. Act. The assessee was asked to explain why she claimed profit exempted under Section 10(36) of the IT Act when she had purchased shares before 1st March, 2003. In the reply filed by the assessee, it was stated that she was under the bona fide belief that profit on the sale of these shares was exempt under Section 10(36) of the I.T. Act and nothing in this regard has been concealed by her and this bona fide belief was based on the advice of her counsel. However, the Assessing Officer did not accept the contention of the assessee and held that a wrong claim was made by the assessee by furnishing inaccurate particulars of her income as the profit on sale of shares was not exempt under Section 10(36) of the I.T. Act and separate penalty proceedings were initiated against the assessee. A penalty of Rs.4,12,545/- was imposed upon the assessee, under Section 271(1)(c) of the I.T. Act, by Assistant Commissioner of Income-tax, Circle, Kurukshetra, vide order dated 30.01.2006. Aggrieved against the said order, assessee filed an appeal before the Commissioner of Income Tax ( Appeals ) Karnal, ( hereinafter referred to as 'CIT(A)' ),who vide its order dated 24.05.2006, partly allowed the appeal and deleted the penalty. Not feeling satisfied with the order of CIT(A), the revenue filed an appeal before the Tribunal on the ground that the assessee had wrongly claimed exemption under Section 10 (36) of the I.T. Act as the said provisions were not applicable to the facts of the assessee's case and therefore,she had concealed her income by furnishing inaccurate particulars and therefore, the assessee is liable for imposition of penalty. The Tribunal, vide its order dated 30.03.2007 dismissed the appeal of the revenue- department. Still dissatisfied with the order of Tribunal, the revenue has filed the present appeal.

We have heard learned counsel for the appellant- revenue and perused the record. At the very outset, Shri Sanjiv Kaushik, Advocate for the revenue has very fairly stated that the facts of the instant case are identical to the facts involved in the case of ITA No. 57 of 2008, decided by this Court on 11.04.2008 and the issue in dispute is covered by the said decision of this Court. Learned counsel for the revenue has further stated that while passing the impugned order, the Tribunal had relied upon its decision in the case of ACIT v. Amar Nath in ITA No. 592/Chandi/2006 for the assessment year 2004-05 ( ITA No. 57 of 2008 titled as The Commissioner of Income Tax, Karnal v. Sh. Amar Nath ).

In view of the above conceded position, no question of law is arising for the determination of this Court in this appeal and the same is hereby dismissed. ( RAKESH KUMAR GARG ) JUDGE ( SATISH KUMAR MITTAL ) JUDGE 28.04.2008 dinesh