C.I.T.AMRITSAR vs. M/S SANITARY IMPRO.& TILES MFG.CO.ASR.

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ITR/17/1990HC Punjab & HaryanaPHHC01021566199017 January 2007Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE M.M. KUMAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal was correct in its decision. The penalty of Rs. 18,223/- was imposed under Section 271(1)(a) of the Income Tax Act, 1961, for delay in filing the return. While the First Appellate Authority upheld the penalty, the Tribunal's decision was based on its appreciation of the material on record, considering the subjective satisfaction of the assessing officer and the possibility of a different view. The Court emphasized that given the assessment year (1972-73) and the penalty amount, it would not substitute its own opinion for that of the Tribunal, especially when a different view was possible. Consequently, the questions referred were answered against the revenue and in favour of the assessee, leading to the deletion of the penalty.

What were the facts?

This case concerns an Income Tax Reference (I.T.R. No.17 of 1990) before the High Court of Punjab and Haryana at Chandigarh, arising from an order of the Income Tax Appellate Tribunal, Amritsar Bench, dated January 31, 1981. The reference pertains to assessment year 1972-73 and involves a penalty of Rs. 18,223/- imposed on the assessee, M/s Sanitary Improvement and Tiles Mfg. Co., Amritsar, by the Income-tax Authorities. The penalty was initially upheld by the First Appellate Authority. The procedural history indicates that the Tribunal's decision is under challenge by the Commissioner of Income-tax (Central), Amritsar.

What were the issues?

The Tribunal was asked to decide two questions of law: 1. Whether the Tribunal was legally correct in upholding the assessee's contention that a different type of default, as per the High Court's opinion in I.T. Ref. No.134 of 1979, justified the penalty imposed. 2. Whether the Tribunal was legally correct in deleting the penalty of Rs. 18,223/-, which was based on a shorter period of default (September 1, 1972, to February 28, 1974) as determined by the Income-tax Officer. The revenue argued that the Tribunal erred in its decision. The assessee contended that the penalty was imposed for a different default than what was ultimately justified, referencing a High Court opinion. The judgment does not explicitly detail the revenue's specific arguments beyond challenging the Tribunal's findings, nor does it name any specific authorities or precedents relied upon by either side.

Which sections of the Income-tax Act were involved?

Section 271(1)(a)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

**** Date of Decision:17.01.2007 The Commissioner of Income-tax (Central), Amritsar .....Petitioner Vs. M/s Sanitary Improvement and Tiles Mfg. Co., Amritsar

.....Respondent CORAM:- HON'BLE MR. JUSTICE M.M.KUMAR HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Mr. Yogesh Putney, Advocate for the revenue. **** Rajesh Bindal, J. The following questions of law have been referred for opinion of this Court arising out of order passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in I.T.A. No.726(ASR)/1977-78 dated 31.1.1981 in respect of assessment year 1972-73:- “1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in upholding the contention of the assessee that by virtue of the opinion of the High Court given in I.T. Ref. No.134 of 1979 there is a different kind of default for which the penalty had been imposed on the assessee by the Income-tax Authorities?

2.

Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the penalty of Rs.18,223/- which was imposed on the basis of the lesser period of default from 1.9.1972 to 28.2.1974 as held by the Income-tax Officer?” The issue raised in the present reference is with regard to levy of penalty of Rs. 18,223/- imposed under Section 271(1)(a) of the Income Tax Act, 1961 (for short, `the Act'). On account of delay in filing of return, a levy of penalty was upheld by the First Appellate Authority, however, before the Tribunal, the penalty was sought to be justified on the reasons -2- and period different than for which it was originally levied. On appreciation of material on record, the Tribunal having taken a view on subjective satisfaction and merely because a different view is possible, this Court would not like to substitute its own opinion on the same especially keeping in view the fact that the assessment year involved is 1972-73 and the amount of penalty being Rs.18,223/-. Accordingly, the questions referred are answered against the revenue and in favour of the assessee. ( RAJESH BINDAL ) JUDGE January 17, 2007

( M.M.KUMAR ) renu JUDGE

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