THE COMMISSIONER OF INCOME TAX vs. M/S JAI LAXMI RICE MILLS AMBALA CITY

ITA/84/2005HC Punjab & HaryanaPHHC01069070200511 December 2006Author: MR.JUSTICE J.S. KHEHAR,MR. JUSTICE S.D.ANAND4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial questions of law arose for its consideration and dismissed the appeal. The Court reasoned that the CIT(Appeals), by order dated December 5, 1996, had set aside the assessment orders for both assessment years 1991-92 and 1992-93 with a direction for de novo assessment after affording adequate opportunity to the appellant. The Court found that once the assessment orders were set aside, the order passed by the Revenue under Section 271-D of the Act would not survive. The Court viewed the Section 271-D order as practically submerging in light of the CIT(Appeals)'s order setting aside the original assessment and remanding the case for de novo assessment. The Court also noted the assessee's submission that fresh assessment orders had been passed without reference to the Section 271-D penalty. Therefore, the ITAT's deletion of the penalty was upheld.

What were the facts?

The Revenue, Commissioner of Income Tax (CIT), Panchkula, filed an appeal against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had deleted the penalty imposed under Section 271-D of the Income Tax Act, 1961. The Revenue contended that the penalty proceedings under Section 271-D were separate from the original assessment and were not covered by the order of the Commissioner of Income Tax (Appeals) dated December 5, 1996. The penalty order under Section 271-D was passed on September 23, 1996. The assessee is M/s Jai Laxmi Rice Mills, Ambala City, and the assessment years involved are 1991-92 and 1992-93. The CIT(Appeals) had set aside the assessment orders for these years and directed a de novo assessment.

What were the issues?

1. Whether the penalty proceedings initiated under Section 271-D of the Income Tax Act, 1961, are separate from the original assessment proceedings and survive even if the original assessment orders are set aside by the CIT(Appeals). Assessee's Contention: The assessee argued that the ITAT correctly deleted the penalty because the CIT(Appeals) had set aside the original assessment orders for both assessment years. Consequently, any proceedings stemming from the original assessment, including the penalty under Section 271-D, would not survive. The assessee also noted that fresh assessment orders were passed after the CIT(Appeals)'s direction, and these did not refer to the Section 271-D penalty. Revenue's Contention: The Revenue contended that the penalty under Section 271-D was a separate proceeding and was not covered by the CIT(Appeals)'s order dated December 5, 1996. They argued that the ITAT erred in deleting the penalty by holding that penalty proceedings initiated during the original assessment could not survive once the original assessment was set aside by the CIT(Appeals). The Revenue highlighted that the penalty order was passed on September 23, 1996, prior to the CIT(Appeals)'s order.

Which sections of the Income-tax Act were involved?

Section 271-D,Section 144,Section 250(6)

AI-generated summary — verify with the full judgment below

I.T.A. No.84 of 2005 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CASE NO:I.T.A. No.84 of 2005 DATE OF DECISION:December 11, 2006 THE COMMISSIONER OF INCOME TAX, PANCHKULA. ......APPELLANT through Mr. Yogesh Putney, Advocate VERSUS M/S JAI LAXMI RICE MILLS, AMBALA CITY. ......RESPONDENT through Mr. Rakesh Garg, Advocate CORAM: HON'BLE MR. JUSTICE VIJENDER JAIN, CHIEF JUTICE HON'BLE MR. JUSTICE J.S.NARANG.

1.

Whether Reporters of Local Newspapers may be allowed to see the judgment?

2.

To be referred to the Reporters or not?

3.

Whether the judgment should be reported in the Digest? VIJENDER JAIN, CHIEF JUSTICE (ORAL) Aggrieved by the order passed by the Income Tax Appellate Tribunal ( for short “ the ITAT”), Revenue has preferred this appeal in this Court. The only point which has been raised before us by the appellant is that the penalty amount under Section 271-D of the Income Tax Act (for short “the Act”) were a separate proceedings and were not covered by the order passed by Commissioner of Income Tax (Appeals) on 05.12.1996. It is also contended by learned counsel for the revenue that the order under Section 271-D of the Act was passed on 23.09.1996, wher

The order continues below.

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