C.I.T TRK vs. M/S BHARAT TUBEWELL STORE

ITR/69/1990HC Punjab & HaryanaPHHC01021624199024 October 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court acknowledged merit in the Revenue's contention that the Tribunal's view was vitiated by the incorrect placement of the onus of proof on the Revenue, which contradicted the law laid down by the Full Bench in Vishwakarma Industries' case. The Full Bench had established that the burden of proving concealment of income for penalty imposition was not on the Revenue. However, considering the amount involved and the nature of the issue referred, the Court deemed it inappropriate to remand the case back for a fresh finding on merits by shifting the onus of proof to the Assessee. Therefore, the Court returned the reference unanswered. No issue was expressly left undecided, but the reference itself was not answered on merits.

What were the facts?

The Commissioner of Income-tax, Haryana Rohtak (Revenue) has referred two questions of law for the opinion of the High Court of Punjab and Haryana, arising from an order of the Income Tax Appellate Tribunal (Tribunal) dated 20.11.1982. The appeal before the Tribunal was I.T.A. No.1179 of 1971-72, concerning assessment year 1968-69. The dispute pertains to the cancellation of a penalty of Rs. 20,000/- levied on M/s Bharat Tubewell Store, Sirsa (Assessee) under Section 271(1)(c) of the Income Tax Act, 1961. The Revenue contends that the Tribunal erred in cancelling the penalty by incorrectly placing the burden of proof on the Revenue.

What were the issues?

1. Whether the Tribunal was right in cancelling the penalty of Rs. 20,000/- levied on the assessee under Section 271(1)(c) of the Income Tax Act, 1961? (Question of law) 2. Whether the Tribunal had erred in following the decision in the case of Karnail Singh even though that decision had been over-ruled by the Full Bench in the case of Vishwakarma Industries? (Question of law) Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Tribunal erred in cancelling the penalty by wrongly placing the burden of proof on the Revenue. The Tribunal followed the decision in Addl. CIT Vs. Karnail Singh (1974) 94 ITR 505, which was subsequently overruled by the Full Bench in Vishwakarma Industries vs. The Commissioner of Income Tax, Amritsar 135 ITR 652 (FB). The Full Bench decision held that the burden to prove concealment of income for imposing penalty was not on the Revenue.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

**** I.T.R. No.69 of 1990 Date of Decision:24.10.2006 The Commissioner of Income-tax, Haryana Rohtak .....Petitioner Vs.

M/s Bharat Tubewell Store, Sirsa .....Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present:- Shri Yogesh Putney, Advocate for the petitioner- Revenue. **** ADARSH KUMAR GOEL, 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, Chandigarh Bench, Chandigarh in I.T.A. No.1179 of 1971-72 dated 20.11.1982 for the assessment year 1968-69:- “1. Whether the Tribunal was right in cancelling the penalty of Rs.20,000/- levied on the assessee u/s 271(1)(c)?

2.

Whether the Tribunal had erred in following the decision in the case of Karnail Singh even though that decision had been over-ruled by the Full Bench in the case of Vishwakarma Industries?” I.T.R. No.

The order continues below.

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