AGGARWAL ENGINNERING CO. vs. ASSTT. COMM. JALLANDHAR

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ITA/816/2008HC Punjab & HaryanaPHHC01080846200801 February 2011Bench: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that the appeal was deferred pending the decision in ITA No. 478 of 2006 concerning the quantum of income. This appeal, along with other connected appeals and penalty appeals for assessment years 1994-95 and 1995-96, was disposed of by the High Court on 06.12.2010. In that decision, the matter was remanded to the CIT(A) for a fresh decision on merits in accordance with law. In view of this development, the present appeal was also disposed of on the same terms, remanding the matter to the CIT(A) for a fresh decision on merits. The operative direction was to remand the matter to the CIT(A). No specific issue was left undecided; the entire matter was remanded.

What were the facts?

The assessee, Aggarwal Engineering Co., filed an appeal before the Punjab and Haryana High Court against an order dated 25.04.2008 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench. The appeal pertained to assessment year 1996-97 and challenged the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The High Court noted that this appeal was deferred pending the decision in ITA No. 478 of 2006 concerning the quantum of income. The Court further observed that ITA No. 478 of 2006, along with other connected appeals and penalty appeals for assessment years 1994-95 and 1995-96, had been disposed of by the High Court on 06.12.2010, with the matter being remanded to the CIT(A) for a fresh decision.

What were the issues?

The Tribunal had to decide the following substantial questions of law: 1. Whether the ITAT was justified in ignoring that the Assessing Officer (AO) had not recorded proper satisfaction to initiate penalty proceedings, rendering the penalty proceedings invalid. 2. Whether the ITAT was justified in reversing the CIT's order that canceled the penalty imposed under Section 271(1)(c) by the AO, on the grounds that the income was assessed on an estimate basis and there was no mens rea on the part of the assessee. 3. Whether the penalty imposed by the AO and upheld by the Tribunal was liable to be set aside considering the final decision of the High Court in the assessment matter. Assessee's contentions: The assessee argued that no proper satisfaction was recorded by the AO to initiate penalty proceedings, and therefore, no valid proceedings were initiated. The assessee also contended that the penalty should be canceled because the income was assessed on an estimate basis, indicating no mens rea, and that the penalty should be set aside in light of the final decision in the assessment case. The assessee relied on various court decisions. The judgment does not record specific contentions for the revenue.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Income-tax Appeal No.816

of 2008

-1- **** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income-tax Appeal No.816

of 2008

Date of decision: 1.2.2011 Aggarwal Engineering Co. ...Appellant Versus The Income Tax Officer-IV(2), Jalandhar (Pb.) ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr. K.L.Goel, Senior Advocate with Mr. Sandeep Goel, Advocate for the appellant.

**** ADARSH KUMAR GOEL, J (

Oral)

. 1. This appeal has been preferred by the assessee under Section 260-A of the Income Tax Act, 1961 against the order dated 25.4.2008 of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in I.T.A. No.438(ASR)/2006 for the assessment year 1996-97 proposing to raise following substantial questions of law:- i) Whether on the facts and circumstances of the case, the ld. ITAT is justified to ignore the fact that no proper satisfaction has been recorded by Assessing Officer to initiate proceedings of penalty and therefore as held by different courts, no valid proceedings of penalty were ever initiated? ii) Whether, on the facts and circumstances of the case,

Income-tax Appeal No.816

of 2008

-2- **** the ld. ITAT is justified to reverse the well-reasoned order passed by the CIT, canceling the penalty imposed u/s 271(12)(C) of Assessing Officer on the ground that income has been assessed by Assessing Officer on estimate basis and there is no mensrea on the part of assessee? iii) Whether on the facts and circumstances of the case, the penalty imposed by Assessing Officer as upheld by the Tribunal is liable to be set aside taking into consideration the final decision in the matter relating to assessment of the case by this Hon'ble Court? 2. Learned counsel for the assessee points out that this appeal was deferred till decision of ITA No.478 of 2006 on the issue of quantum. The said appeal along with two other connected appeals as also appeals against orders of penalty i.e. ITA Nos.904 and 948 of 2008 for assessment years 1994-95 and 1995-96 were disposed of by this Court vide order dated 6.12.2010. The matter was remanded to the CIT(A) for fresh decision. 3. In view of above development, this appeal is disposed of in same terms and matter is remanded to the CIT(A) for fresh decision on merits in accordance with law. The appellant may appear before the CIT (A) for further proceedings on 14.2.2011 which is also the date given in other cases.

(Adarsh Kumar Goel)

Judge February 01, 2011 (Ajay Kumar Mittal) Pka

Judge

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