C.I.T JDR vs. M/S VADHBAG PAPER & BOARD MILLS PVT.LTD.

PDF · subscribers
ITR/9/1993HC Punjab & HaryanaPHHC01021964199321 November 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal's finding that the assessee had a reasonable cause for late filing of the return and that the case was not made out for levying penalty under Section 271(1)(a) of the Income Tax Act, 1961, could not be considered perverse. The reasoning was that when the assessee was to file the return, it could not have visualized that the deduction claimed under Section 80J of the Act for the previous years would be disallowed. Once the disallowance occurred, the assessee filed the return. Therefore, the Tribunal's conclusion that there was a reasonable cause for the delay was not erroneous. The question referred to the Court was answered against the revenue and in favour of the assessee. The reference was disposed of accordingly.

What were the facts?

The assessee, M/s. Vadhbag Paper and Board Mills Pvt. Limited, Nawanshahr, filed its return for assessment year 1984-85 on 5.11.1986, showing a loss. The Assessing Officer initiated penalty proceedings for late filing under Section 271(1)(a) of the Income Tax Act, 1961. The assessee's explanation was that it had not filed the return earlier because it had claimed a deduction under Section 80-J in previous years, and if this claim were allowed, it would result in a loss. However, this claim was disallowed, leading to the eventual filing of the return. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal but directed the penalty to be re-computed, resulting in a penalty of Rs. 29,255/-. The Income Tax Appellate Tribunal (Tribunal) upheld the assessee's plea that it was not required to file a return of loss and that there was a reasonable cause for the late filing.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has been in error in holding that it was not a fit case for levying the penalty for late filing under Section 271(1)(a) of the Income Tax Act, 1961 in respect of assessment year 1984-85? Assessee's Contention: The assessee argued that it was not required to file a return of loss and therefore had a reasonable cause for the late filing. The Tribunal upheld this plea. Revenue's Contention: The revenue contended that the Tribunal erred in holding that the case was not fit for levying penalty for late filing. The revenue's argument is implicit in the reference of the question to the High Court, seeking to overturn the Tribunal's finding.

Which sections of the Income-tax Act were involved?

Section 271(1)(a),Section 80-J

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR No.9 of 1993 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.9 of 1993 Date of decision:21.11.2006 The Commissioner of Income tax, Jalandhar ....Petitioner versus M/s. Vadhbag Paper and Board Mills Pvt. Limited, Nawanshahr ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Dr. N.L.Sharda, Advocate, for the revenue.

JUDGMENT: Following question has been referred for the opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, 'the Tribunal'), arising out of its order dated 30.8.1990 in ITA No.1210(ASR)/1989, for the assessment year 1984-85:- “Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal has been in error in holding that it was not a fit case for levying the penalty for late filing under section 271(1)(a) of the Income Tax Act, 1961 in respect of assessment year 1984-85?” The assessee filed its return for the assessment year 1984-85 on 5.11.1986 showing loss, adjustable against brought forward losses of earlier years. For the earlier years, the assessee had claimed deduction 80-J of the Income Tax Act, 1961 (for short, 'the Act') which was not allowed and taxable income was determined by adjusting the carry forward losses. The Assessing Officer initiated penalty proceedings against the assessee for delay in filing the return for the year 1984-85 and rejected the explanation that the assessee had not filed return as in the return for the earlier years, the assessee had claimed loss, if claim under section 80-J of the Act was allowed. Since the said claim was disallowed, the assessee filed

ITR No.9 of 1993 2 return. The CIT(A) dismissed the appeal but directed that the penalty be re-computed. Accordingly, penalty of Rs.29,255/- was computed. The Tribunal upheld the plea of the assessee that the assessee was not required to file any return of loss and, thus, there was reasonable cause for late filing the return.

We have heard learned counsel for the revenue and perused the findings recorded. The finding of the Tribunal in paras 9 and 10 of its order that the assessee had reasonable cause for late filing of the return and case for levy of penalty was not made out, cannot be held to be perverse, for the reason that when the assessee was to file the return, he could not visualise that deduction claimed under section 80J of the Act for the previous years will be disallowed. Once it is so, the conclusion of the Tribunal cannot be held to be erroneous. In view of the above, the question referred is answered against the revenue and in favour of the assessee. Reference is disposed of accordingly. (Adarsh Kumar Goel) Judge November 21,2006 (Rajesh Bindal) 'gs' Judge

More judgments on Section 271(1)(a)

All 62 judgments and leading authorities on Section 271(1)(a) →

Recent GST High Court judgments

Search GST case law →