C.I.T. JALANDHAR vs. M/S RAM CHAND SOHAN LAL

ITR/50/1994HC Punjab & HaryanaPHHC01024708199426 October 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Tribunal was legally justified in upholding the cancellation of the penalty. The Court referred to its earlier decision in Income-Tax Officer v. Kaysons India (2000) 246 ITR 489. In that case, it was observed that a default or failure to file the return along with the audit report on or before the specified date is not covered by Section 271B. The Court noted that the revenue had not contended that the assessee failed to get accounts audited or obtain the audit report before the specified date. Furthermore, no return was filed under Section 139(1) or in response to a notice under Section 142(1). The assessee had filed a return under Section 139(4) after the due date, but this return was duly accompanied by the audit report obtained in accordance with Section 44AB. Therefore, the default for which the penalty was levied was not covered by Section 271B, and the ITAT was justified in holding that no penalty was leviable. The question of law was answered against the revenue and in favour of the assessee.

What were the facts?

This case involves an Income Tax Reference (ITR) filed by the Commissioner of Income-tax, Jalandhar (the revenue) against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The assessment year in question is 1986-87. The dispute centers on a penalty of Rs. 26,204/- imposed under Section 271B of the Income-tax Act, 1961, which was upheld by the ITAT. The High Court of Punjab and Haryana at Chandigarh was asked to decide a specific question of law referred by the ITAT.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal has been legally justified in upholding cancellation of penalty amounting to Rs.26,204/- imposed under section 271B of the Income-tax Act, 1961, in respect of assessment year 1986-87? The revenue's contention is implied by the filing of the reference, seeking to overturn the ITAT's decision. The assessee's position, as upheld by the ITAT, is that the penalty under Section 271B was not leviable. The High Court relied on its previous judgment in Income-Tax Officer v. Kaysons India (2000) 246 ITR 489 to decide the issue.

Which sections of the Income-tax Act were involved?

Section 271B,Section 44AB,Section 139,Section 142

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.50 of 1994 Date of decision: 26.10.2006 The Commissioner of Income-tax, Jalandhar. -----Applicant Vs. M/s Ram Chand Sohan Lal, Jalalabad. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Dr. N.L. Sharda, Advocate for the revenue. -----

ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated 26.02.1993 in I.T.A. No.796(ASR)/1992 in respect of assessment year 1986-87:- “Whether, on the facts and in the circumstances of the case, the Tribunal has been legally justified in upholding cancellation of penalty amounting to Rs.26,204/- imposed under section 271B of the Income- tax Act, 1961, in respect of assessment year 1986-87” We find that the issue stands covered against the revenue by the judgment of this Court in Income-Tax Officer v. Kaysons India (2000) 246 ITR

489.

After considering the relevant provisions, this Court observed at page 492:- “It is, therefore, evident that the default or failure to file the return along with the audit report

The order continues below.

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