C.I.T., CHANDIGARH-II vs. RAVINDER PAL

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ITA/530/2007HC Punjab & HaryanaPHHC01073238200718 February 2008Author: MR. JUSTICE SATISH KUMAR MITTAL,MR JUSTICE RAKESH KUMAR GARG3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the present appeal filed by the revenue against the ITAT's order deleting the penalty does not survive. This is because the quantum appeal filed by the revenue against the assessee, which determined the basis for the penalty, had already been dismissed by the High Court vide its order dated November 19, 2007. Since the quantum appeal was dismissed, no substantial question of law would arise for determination in the present appeal concerning the penalty. Therefore, the High Court found no merit in the revenue's appeal. The operative direction was to dismiss the appeal.

What were the facts?

The assessee, Sh. Ravinder Pal, is in appeal against an order of the Income Tax Appellate Tribunal (ITAT) dated April 10, 2007, which quashed a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961. The assessment year in question is 1995-96. The Assessing Officer made additions during assessment and initiated penalty proceedings, which were kept in abeyance pending the assessee's appeal before the Commissioner of Income Tax (Appeals). The CIT(A) deleted additions of Rs. 2,00,000/- and Rs. 10,00,000/-. The revenue appealed to the ITAT against the deletion of Rs. 10,00,000/-, and this appeal was dismissed. Subsequently, the revenue filed an appeal before the High Court against the ITAT's order on the quantum appeal. The penalty under Section 271(1)(c) was imposed on April 28, 2005. The assessee's appeal against this penalty was dismissed by the CIT(A) but allowed by the ITAT, leading to the present appeal by the revenue.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in deleting the penalty levied, when the quantum of income assessed, which forms the basis for levy of the penalty, has not attained its finality? (Question of law turning on Section 271(1)(c) of the Income Tax Act, 1961). Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue argued that the penalty order under Section 271(1)(c) was wrongly deleted by the ITAT because the quantum of income, which formed the basis for the penalty, had not attained finality. The revenue relied on the fact that they had filed an appeal before the High Court against the ITAT's order on the quantum appeal.

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

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision: 18.2.2008 The Commissioner of Income tax, ......Appellant Chandigarh-II Versus Sh. Ravinder Pal, H.No.260, Sector 33-A, Chandigarh ......Respondent CORAM:- HON'BLE MR.JUSTICE SATISH KUMAR MITTAL HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. S.K. Garg Narwana, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J .

1.

The present appeal has been filed by the revenue under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') against the order dated 10.4.2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench-A in ITA No.194/Chandi/2006 raising the following substantial question of law: “Whether on the facts and in the circumstances of the case, the ITAT was right in deleting the penalty levied, when the quantum of income assessed, which forms the basis for levy of the penalty, has not attained its finality?”

2.

The assessment of the assessee for the assessment year 1995-96 was completed on 27.3.1998 and additions were made by the Assessing Officer. While completing the assessment, penalty proceedings under Section 271(1)(c) of the Act, 1961 were initiated. On the request of the assessee, these penalty proceedings were kept in abeyance as the assessee had filed an appeal before the Commissioner of Income Tax (Appeals), Chandigarh. The appeal was decided by the Commissioner of Income Tax (Appeals), Chandigarh, vide his order dated 2.3.2001 and additions of Rs.2,00,000/- on account of unexplained investment in the construction of M/s RPS Hotel and of Rs.10,00,000/- on account of unexplained cash found at the residence of the assessee during search were deleted. However, the other additions made by the Assessing Officer were confirmed.

3.

The revenue filed an appeal before the ITAT, Chandigarh only on one issue i.e. the relief allowed by the CIT(A) in respect of the addition of Rs.10,00,000/- on account of unexplained cash. The Tribunal vide its order dated 6.10.2004 dismissed the appeal of the revenue and confirmed the order of the CIT(A).

4.

The Department further filed an appeal under Section 260-A of the Act against the order of the ITAT in quantum appeal before this Court.

5.

The Assistant Commissioner of Income Tax, Circle-6(1), Chandigarh vide his order dated 28.4.2005 imposed penalty under Section 271(1)(c) of the Act upon the assessee. The appeal filed by the assessee against the order of penalty was dismissed by the Commissioner of Income Tax (Appeals), Chandigarh vide his order dated 3.2.2006. However, the Tribunal vide its order dated 10.4.2007 allowed the appeal filed by the assessee and quashed the penalty order. Hence, this appeal by the revenue against the said order of ITAT.

6.

We have heard Mr. S.K. Garg Narwana, Advocate learned counsel for the revenue and perused the record.

7.

At the very outset, Mr. Garg has brought to our knowledge that the present appeal filed by the revenue does not survive as the quantum appeal filed by the revenue against the asssessee has already been dismissed by this Court vide order dated 19.11.2007. 8. In view of this, the present appeal fails as no substantial question of law would arise for determination of this Court. Dismissed. (RAKESH KUMAR GARG) JUDGE February 18, 2008 (SATISH KUMAR MITTAL) ps

JUDGE

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