C.I.T. AMRITSAR vs. M/S HARPAL SINGH

ITR/145/1995HC Punjab & HaryanaPHHC01032201199527 October 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages

AI SummaryAllowed

What did the High Court hold?

The High Court answered the question of law against the revenue and in favour of the assessee. The Court noted that an identical question had been examined in a previous case, ITA No.102 of 1999 (The Commissioner of Income Tax, Jalandhar v. M/s. Avet Chemicals (P) Limited, Jalandhar), decided on 11.9.2006. In that case, following the judgment of the Hon'ble Supreme Court in Assistant Director of Inspection (Investigation) v. Kum. A.B.Shanthi, (2002) 255 ITR 258, the question was answered in favour of the assessee. Therefore, applying the same reasoning and precedent, the present reference is also answered against the revenue. The penalty of Rs. 1,50,000/- stands cancelled. The operative direction is that the appeal is decided in favour of the assessee.

What were the facts?

The assessee, M/s. Harpal Singh Jaswant Singh, Malout, is a commission agent. The Assessing Officer noted that the assessee made repayments of Rs. 20,000/- and above otherwise than through account payee cheques or account payee bank drafts, contravening Section 269-T of the Income Tax Act, 1961. A penalty of Rs. 1,50,000/- was imposed by the Deputy CIT, Bhatinda Range. The Commissioner of Income Tax (Appeals) deleted the penalty, holding that Section 269-T was not applicable as the repayments were not considered deposits. The Income Tax Appellate Tribunal upheld this view. The Commissioner of Income Tax, Jalandhar, has filed this reference before the High Court challenging the Tribunal's order for the assessment year 1991-92.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal is justified in cancelling the penalty of Rs. 1,50,000/- levied under section 271-E of the Income Tax Act, 1961? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the CIT(A) and the Tribunal had held that the provisions of Section 269-T were not applicable as the repayments could not be held to be deposits. Revenue's Contention: The revenue, through the Commissioner of Income Tax, Jalandhar, is challenging the cancellation of the penalty. The revenue likely argued that the assessee's actions constituted a violation of Section 269-T, warranting the penalty under Section 271-E. The revenue's appeal is based on the Assessing Officer's finding of contravention of Section 269-T.

Which sections of the Income-tax Act were involved?

Section 271-E, Section 269-T

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

ITR No.145 of 1995 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.145 of 1995 Date of decision:27.10.2006 The Commissioner of Income tax, Jalandhar ....Petitioner versus M/s. Harpal Singh Jaswant Singh, Malout ....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 questions of law have been referred for the opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated 18.1.1994 in ITA No.405(ASR)/93 for the assessment year 1991-92:- “Whether, on the facts and in the circumstances of the case, the Tribunal is justified in cancelling the penalty of Rs.1,50,000/- levied under section 271-E of the Income Tax Act, 1961?”

The assessee is a commission agent. The Assessing Officer found that the assessee made repayments of Rs.20,000/- and above otherwise than through account payee cheques or account payee bank drafts, thereby violating the provisions of section 269-T of the Income Tax Act, 1961 (for short, 'the Act'). Accordingly, reference was made to the

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free account Sign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

Latest GST High Court judgments

Search GST case law →