COMMISSIONER OF INCOME TAX vs. PUNJAB STATE CO.COP SUPPLIES & MKT. FED. LTD.

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.281 of 2010 Date of decision: 2.8.2010 Commissioner of Income Tax-II -----Appellant. Vs. The Punjab State Coop. Supplies & Marketing Federation Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Ms. Urvashi Dhugga, Standing counsel for the Revenue. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the Revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Chandigarh dated 17.9.2009 in I.T.A. No.685/Chandi/2009 proposing to raise following substantial questions of law:- “Whether on the facts and circumstances of the case and in law, the order of the ITAT in deleting the penalty imposed u/s 271(1)(c) is correct whereas the assessee has failed to show the income on a/c of interest from income tax refund, in its profit & loss account.”

I.T.A. No.281 of 2010 2. The Assessee is a public sector undertaking registered under the provisions of the Punjab Cooperative Societies Act, 1961. It received income by way of interest on income tax refunds which was not credited to the ‘profit and loss account’ and instead was credited to the provisions for income tax. During assessment, addition was made to the income on that account and penalty was also imposed. On appeal, the CIT(A) set aside the penalty holding that the assessee had disclosed all the details in the balance sheet itself and thus, there was bonafide mistake, on account of which, penalty was not liable to be imposed. The relevant observations are as under:- “I have carefully considered the rival submissions. I find that the assessee disclosed these facts in the balance sheet. In fact, the Assessing Officer took the figures from the balance sheet itself. It is a Government undertaking. There is no personal interest involved. I am in agreement with the contention of the assessee that it was a bonafide mistake and the same could not be taken while arriving at the income. There is no contumacious conduct on the part of the assessee, which is evident from the fact that the assessee did not receive the refund. This was in fact adjusted against the arrears. It is a settled law that any addition made does not automatically attract penalty. On these facts, I am of the opinion that no penalty is imposable.” The above observations were approved by the Tribunal. 2

I.T.A. No.281 of 2010 3. We have heard learned counsel for the appellant. 4. In view of finding of fact concurrently recorded by the CIT(A) as well as the Tribunal that mistake of the assessee was a bonafide one and there was no concealment, levy of penalty was not permissible. 5. No substantial question of law arises.

The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 02, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 3