CIT JALANDHAR vs. M/S KOHINOOR RUBBER MILLS JALA

ITR/88/1999HC Punjab & HaryanaPHHC01038779199919 September 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 right in cancelling the penalty levied under Section 271B. The Court relied on its previous judgment in Income-Tax Officer v. Kaysons India (2000) 246 (ITR) 489. The reasoning was that Section 271B applies to the default or failure to file the return along with the audit report on or before the specified date. In this case, the assessee had filed a return under Section 139(4) on December 31, 1990, which was accompanied by the audit report obtained in accordance with Section 44AB. The return under Section 139(1) could have been filed up to November 30, 1990. Since no return was filed under Section 139(1) or in response to a notice under Section 142(1), there was no default in furnishing an audit report along with a non-existent return. The Court found that the default for which the penalty was levied was not covered by Section 271B, and therefore, the Commissioner (Appeals) and the Tribunal were 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 M/s Kohinoor Rubber Mills, Jalandhar City (the assessee). The assessment year in question is 1990-91. The matter arises from an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, dated July 20, 1998, in I.T.A. No.381(ASR)/1992. The ITAT had cancelled a penalty levied under Section 271B of the Income-tax Act, 1961. The High Court of Punjab and Haryana 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 was right in law in cancelling the penalty levied u/s. 271B of the Income-tax Act, 1961? Assessee's contention: The judgment does not record specific arguments made by the assessee before the High Court. However, the reasoning of the High Court implies that the assessee's position, as accepted by the Tribunal, was that the penalty under Section 271B was not leviable. Revenue's contention: The revenue contended that the penalty under Section 271B was rightly levied. The High Court's reference to the ITAT's order suggests the revenue's appeal was against the cancellation of this penalty.

Which sections of the Income-tax Act were involved?

Section 271B,Section 44AB,Section 139(1),Section 139(4),Section 142(1)

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.88 of 1999 Date of decision: 19.09.2006 The Commissioner of Income-tax, Jalandhar. -----Applicant Vs. M/s Kohinoor Rubber Mills, Jalandhar City. -----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 20.07.1998 in I.T.A. No.381(ASR)1992 in respect of assessment year 1990-91:- “Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in cancelling the penalty levied u/s. 271B of the Income-tax Act, 1961?” 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 on or before the specified date is not hit by the provisions of section 271B. It is not

The order continues below.

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