THE COMMISSIONER OF INCOME TAX vs. INDIAN OIL PANIPAT POWER CONSORTIUM LTD.

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ITA/1483/2010HC Delhi28 September 20102 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that since the quantum appeals concerning the Assessment Years 2001-02 and 2002-03 had already been dismissed by the Court, the present appeals challenging the imposition of penalty under Section 271(1)(C) of the Income Tax Act, 1961, necessarily had to follow the same fate. The Court found no reason to sustain the penalty appeals independently of the quantum appeals. Therefore, the appeals filed by the Revenue were dismissed. The Court did not grant any order as to costs. The principle derived is that penalty proceedings are consequential to the assessment of income, and if the assessment itself is not upheld or is dismissed, the penalty levied on that assessment may also be dismissed.

What were the facts?

The appeals were filed by the Commissioner of Income Tax (Revenue) under Section 260A of the Income Tax Act, 1961, challenging a common order dated September 29, 2009, passed by the Income Tax Appellate Tribunal (Tribunal). The Tribunal's order pertained to ITA Nos. 3366/Del/2009 and 3367/Del/2009, concerning Assessment Years 2001-02 and 2002-03, respectively. The appeals before the High Court were related to the imposition of penalty under Section 271(1)(C) of the Act. The Revenue's counsel conceded that the quantum appeals for the same assessment years had already been dismissed by the High Court via an order dated February 26, 2009, in ITA Nos. 1156 & 1157/2007.

What were the issues?

1. Whether the imposition of penalty under Section 271(1)(C) of the Income Tax Act, 1961, is sustainable when the underlying quantum appeals have been dismissed by the High Court? (Question of law) Assessee's Contention: Not recorded. Revenue's Contention: The Revenue argued that the present appeals pertained to the imposition of penalty under Section 271(1)(C) of the Act. The Revenue's counsel fairly submitted that the quantum appeals for the Assessment Years 2001-02 and 2002-03 had already been dismissed by this Court vide order dated February 26, 2009, in ITA Nos. 1156 & 1157/2007. The Revenue did not present any separate arguments on the merits of the penalty imposition, relying on the dismissal of the quantum appeals.

Which sections of the Income-tax Act were involved?

Section 260A,Section 271(1)(C)

AI-generated summary — verify with the full judgment below

#12,11 $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ ITA 1483/2010

THE COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr. Sanjeev Sabharwal, Advocate

versus

INDIAN OIL PANIPAT POWER CONSORTIUM LTD.

..... Respondent

Through: None

AND

+ ITA 1482/2010

THE COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr. Sanjeev Sabharwal, Advocate

versus

INDIAN OIL PANIPAT POWER CONSORTIUM LTD.

..... Respondent

Through: None

Date of Decision: 28th September, 2010

CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN

1.

Whether the Reporters of local papers may be allowed to see the judgment? No 2. To be referred to the Reporter or not?

3.

Whether the judgment should be reported in the Digest?

MANMOHAN, J

1.

Present appeals have been filed under Section 260A of Income 2010:DHC:4855-DB

Tax Act, 1961 (in short „the Act‟) challenging the common order dated 29th September, 2009 passed by the Income Tax Appellate Tribunal (in short “Tribunal”) in ITA Nos. 3366/Del/2009 and 3367/Del/2009, for the Assessment Years 2001-02 and 2002-03 respectively. 2. Mr. Sanjeev Sabharwal, learned counsel for Revenue fairly submitted at the Bar that the present two appeals pertain to imposition of penalty under Section 271(1)(C) of the Act and the quantum appeals with regard to these assessment years have already been dismissed by this Court vide order dated 26th February, 2009 in ITA Nos. 1156 & 1157/2007. 3. Since the quantum appeals have already been dismissed, the present appeals challenging imposition of penalty have to be and are accordingly dismissed but without any order as to costs.

MANMOHAN, J

CHIEF JUSTICE SEPTEMBER 28, 2010 ng 2010:DHC:4855-DB

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