COMMISSIONER OF I.T.,PATIALA vs. M/S GOYAL ELECTRIC STORES(P) L

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ITR/90/1998HC Punjab & HaryanaPHHC01038075199806 March 2007Bench: MR. JUSTICE M.M. KUMAR,MR. JUSTICE RAJESH BINDAL3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Punjab and Haryana returned the substantial question of law unanswered. The Court noted that the assessee-respondent company had been wound up, its directors had expired, and the revenue stated that the assessment records were not traceable. Consequently, the Court could not proceed with the determination of the substantial question of law as the assessee could not be served. No finding was given on the merits of the ITAT's order or the applicability of Explanation 3 to Section 271(1)(c).

What were the facts?

The revenue, Commissioner of Income-tax, Patiala, filed an Income Tax Reference (ITR) No. 90 of 1998 before the High Court of Punjab and Haryana, Chandigarh. The reference challenged an order dated 14.5.1997 passed by the Income-tax Appellate Tribunal (ITAT), Chandigarh Bench, in ITA Nos. 1742 to 1745/Chd./1992. The assessment year in question was 1988-89. The ITAT had set aside a penalty of Rs. 45,000/- imposed by the Assessing Authority. The assessee, M/s Goyal Electric Stores (P) Ltd., was not served despite efforts, including dasti notice. The revenue submitted that the assessee company had been closed, its directors had expired, and the assessment records were not traceable. The High Court noted that the assessee-respondent had not been served.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that as per Explanation 3 to Section 271(1)(c) which was operative during assessment year 1988-89, penalty under Section 271(1)(c) could not be levied in the case of an old assessee who has not filed a valid return although concealment of income has actually occurred? The revenue contended that the ITAT erred in law by holding that penalty under Section 271(1)(c) could not be levied on an old assessee who had not filed a valid return, despite concealment of income, relying on Explanation 3 to Section 271(1)(c) as operative for assessment year 1988-89. The assessee's contentions are not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

I.T.R. No.90 of 1998 1 In the High Court of Punjab and Haryana, Chandigarh. I.T.R. No.90 of 1998 Date of Decision: 6.3.2007 The Commissioner of Income-tax, Patiala.

…Petitioner. Versus M/s Goyal Electric Stores (P) Ltd. …Respondent. CORAM: HON’BLE MR.JUSTICE M.M.KUMAR HON’BLE MR.JUSTICE RAJESH BINDAL Present: Mr.Vivek Sethi, Advocate for Mr.S.K.Garg Narwana, Advocate for the revenue. JUDGMENT M.M.KUMAR, J. (ORAL) The revenue has approached this Court against the order dated 14.5.1997 passed by the Income-tax Appellate Tribunal, Chandigarh Bench, Chandigarh, in I.T.A. No.1742 to 1745/Chd./1992 in respect of the assessment year 1988-89, claiming that the following substantial question of law would arise for determination:- “Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that as per Explanation 3 to Section 271(1)(c) which was operative during assessment year 1988-89, penalty u/s 271(1)(c) could not be levied in the case of an old assessee who has not filed a valid return although concealment of income has actually occurred?”

I.T.R. No.90 of 1998 2

It is appropriate to mention that the total penalty imposed by the Assessing Authority was Rs.45,000/- which had been set aside by the Tribunal vide its order dated 14.5.1997. This Court had issued notice of motion to the assessee and despite issuance of dasti notice, the assessee- respondent has not been served. The revenue has placed on record a letter bearing F.No.DCIT/C.3(1)CHD/06-07/191 dated 17.1.2007 stating as under:-

“It is humbly submitted that both the respondent firm and company has since been closed, as per enquiries made from the House No.1295, Sector 19-B, Chandigarh the last known address of the respondent. Their partner/director Shri Hans Raj Goyal, Shri Budh Ram Goyal and Smt.Kala Rani have since expired. Moreover, the assessment record of these assessees are not traceable. Shri Rattan Goyal s/o Shri Hans Raj Goyal, who is residing in this house has given this information and expressed his willingness to receive this notice in view of the present situation. As such service of the fixation notice for 22nd January, 2007 could not be affected”.

In view of the fact that the assessee-respondent company has been wound up, its directors have expired and the revenue has stated that assessment records of the assessee are not traceable.

In view of above, we return the question unanswered. (M.M.KUMAR)

Judge March 6, 2007 (RAJESH BINDAL) dkb Judge

I.T.R. No.90 of 1998 3

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