CIT, FARIDABAD vs. N.K. SINGLA

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ITA/478/2010HC Punjab & HaryanaPHHC01093415201001 November 2010Bench: MR JUSTICE RAKESH KUMAR JAIN,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The learned counsel for the Revenue fairly stated that the matter was covered against the Revenue by a previous order of the same High Court dated 15.7.2010 in I.T.A. No.16 of 2010, CIT v. Fateh Singh (HUF). Therefore, the High Court did not delve into the merits of the substantial questions of law raised. The operative direction was to dismiss the appeal. No issues were expressly left undecided, as the appeal was disposed of based on a prior binding precedent.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 28.8.2009 passed by the Income Tax Appellate Tribunal (ITAT), New Delhi. The ITAT's order was in I.T.A. No.713/Del/09 for the assessment year 1998-99. The appeal challenged the ITAT's decision to uphold the deletion of a penalty of Rs.16,00,000/-. This penalty had been levied by the Assessing Officer under Section 271(1)(c) of the Act. The penalty was in relation to additions that had been confirmed by the Commissioner of Income Tax (Appeals) and the ITAT itself. The High Court was considering the substantial questions of law proposed by the Revenue.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the order of the CIT(A) in deleting the penalty of Rs.16,00,000/- levied by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, even though the penalty was levied in respect of additions which were confirmed by the CIT(A) as well as the ITAT itself? 2. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in upholding the order of the CIT(A) in deleting the penalty of Rs.16,00,000/- levied by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, on the ground that the assessee had a bona fide belief as to the taxability of enhanced compensation and interest thereon, disregarding the fact that breach of a civil obligation attracts levy of penalty whether the contravention was made by the defaulter with any guilty intention or not, as willful concealment is not an essential ingredient for attracting civil liability as in the matter of prosecution under Section 276C, as held by the Supreme Court in Union of India & others vs. Dharmendra Textile Processors & others reported in 306 ITR 277 (SC)? The Revenue argued that the penalty was leviable even if the additions were confirmed, and that a bona fide belief was not a defense against penalty for breach of civil obligation, citing the Supreme Court case. The judgment records no specific arguments from the assessee.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 271(1)(c),Section 276C

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.478 of 2010 Date of decision: 1.11.2010 Commissioner of Income Tax. -----Appellant. Vs. N.K. Singla. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAKESH KUMAR JAIN Present:- Ms. Urvashi Dhugga, Advocate for the appellant. --- ADARSH KUMAR GOEL, J. 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 dated 28.8.2009 of the Income Tax Appellate Tribunal, New Delhi in I.T.A. No.713/Del/09 for the assessment year 1998-99 proposing to raise following substantial questions of law:- I. “Whether, on the facts and in the circumstances of the case, the Ld. ITAT was right in law in upholding the order of the Ld. CIT(A) in deleting the penalty of Rs.16,00,000/- levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 even though the penalty was levied in respect of additions which were confirmed by the Ld. CIT(A) as well as the Ld. ITAT itself?” II. “Whether, on the facts and in the circumstances of the case, the Ld. ITAT was right in law in upholding the order of the Ld. CIT(A) in deleting the penalty of Rs.16,00,000/- levied by the Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 on the ground that the assessee had the bona fide belief as to the taxability of

I.T.A. No.478 of 2010 enhanced compensation and interest thereon disregarding the fact that breach of a civil obligation attracts levy of penalty whether the contraventions was made by the defaulter with any guilty intention or not as willful concealment is not an essential ingredient for attracting civil liability as in the matter of prosecution u/s 276C as held by the Hon’ble Supreme Court in the case of Union of India & others vs Dharmendra Textile Processors & others reported in 306 ITR 277 (SC)?”

Learned counsel for the revenue fairly states that the matter is covered against the revenue by order of this Co[urt dated 15.7.2010 in I.T.A. No.16 of 2010 CIT v. Fateh Sigh (HUF).

Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 01, 2010 (RAKESH KUMAR JAIN) ashwani JUDGE 2

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