C.I.T. PATIALA vs. M/S SANT RAM MANGAL RAM

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ITR/595/1995HC Punjab & HaryanaPHHC01032600199527 August 2007Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE M.M. KUMAR2 pages
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What did the High Court hold?

The High Court held that the question of law referred by the ITAT had to be answered against the revenue. This decision was made in view of a separate detailed order of the even date concerning I.T.R. No. 133 of 1992, where the question referred had been answered against the revenue. Therefore, the High Court answered the present question against the revenue and in favour of the assessee, M/s Sant Ram Mangat Ram, Chandigarh. The operative direction was to answer the question in favour of the assessee, implying the deletion of the penalty by the ITAT was upheld.

What were the facts?

The Commissioner of Income-tax, Patiala (the revenue) filed a reference application under Section 256(1) of the Income-tax Act, 1961, to the High Court of Punjab and Haryana at Chandigarh. The reference arose from an order dated January 4, 1995, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench, in I.T.A. No. 149/Chandi/1990. The assessment year in question is 1981-82. The dispute concerns a penalty of Rs. 82,470 imposed under Section 271(1)(a) of the Act. The revenue is challenging the ITAT's deletion of this penalty.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, especially when the quantum assessment on the basis of which the penalty u/s 271(1)(a) was imposed has not attained finality, the ITAT was right in deleting the penalty of Rs. 82,470/- imposed u/s 271(1)(a)? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The revenue contends that the ITAT was not right in deleting the penalty of Rs. 82,470/- imposed under Section 271(1)(a) because the quantum assessment, which formed the basis for the penalty, had not attained finality. The revenue sought to have this question of law answered in its favour.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 271(1)(a)

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.R. No. 595 of 1995 DATE OF DECISION: 27.8.2007 The Commissioner of Income-tax, Patiala …Applicant Versus M/s Sant Ram Mangat Ram, Chandigarh …Respondent CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present: Mr. S.K. Garg Narwana, Advocate, for the applicant-revenue.

JUDGMENT M.M. KUMAR, J. At the instance of the revenue the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (for brevity, ‘the Tribunal’), has referred the following question of law for determination of this Court by exercising jurisdiction under Section 256(1) of the Income-tax Act, 1961 (for brevity, ‘the Act’), which is stated to have emerged from order dated 4.1.1995, passed in I.T.A. No. 149/Chandi/1990, in respect of assessment year 1981-82:- “Whether, on the facts and in the circumstances of the case, specially when the quantum assessment on he basis of which the penalty u/s 271(1)(a) was imposed has not attained finality, the ITAT, was right in deleting the penalty of Rs. 82,470/- imposed u/s 271(1)(a)?”

I.T.R. No. 595 of 1995 When the instant reference came up for hearing on 15.2.2005, a Division Bench of this Court ordered the same to be heard alongwith I.T.R. No. 133 of 1992. In view of the fact that the question referred in I.T.R. No. 133 of 1992 has been answered against the revenue, vide separate detailed order of the even date, therefore, the aforementioned question has to be answered against the revenue in this case also. In view of above, the question is answered against the revenue and in favour of the assessee. (M.M. KUMAR) JUDGE (AJAY KUMAR MITTAL) August 27, 2007 JUDGE Pkapoor 2

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