PR. COMMISSIONER OF INCOME TAX-6, NEW DELHI vs. M.S. SHOES EAST LTD.

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ITA/273/2017HC DelhiDLHC01075983201709 May 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the order of the ITAT. The Court noted that the ITAT's decision to delete the penalty was based on the finding that there was no actual concealment of income or furnishing of inaccurate particulars by the assessee. The ITAT had observed that the assessee had made a few claims which were found not allowable, but this fact, by itself, could not lead to an inference of concealment of income. The High Court considered the view taken by the ITAT, which was based on the Supreme Court's decision in Commissioner of Income-tax, Ahmedabad v. Reliance Petroproducts P. Ltd. [2010] 322 ITR 158 (SC), to be a plausible view. Consequently, the appeal filed by the Revenue was dismissed.

What were the facts?

The Principal Commissioner of Income Tax-6, New Delhi (Revenue) filed a penalty appeal under Section 260A of the Income Tax Act, 1961, against an order dated September 20, 2016, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT's order, in ITA No. 946/Del/2013 for Assessment Year 2001-02, had deleted a penalty that was affirmed by the Commissioner of Income Tax (Appeal) against the assessee, M.S. Shoes East Ltd. The penalty was initially imposed by the Assessing Officer. The ITAT's decision to delete the penalty was based on its finding that the assessee had not concealed income or furnished inaccurate particulars. The assessee had made certain claims that were found not allowable, but this alone was not considered sufficient to infer concealment of income.

What were the issues?

1. Whether the ITAT erred in deleting the penalty imposed on the assessee for Assessment Year 2001-02, when the assessee had made claims that were found not allowable, thereby potentially constituting concealment of income or furnishing of inaccurate particulars under Section 271(1)(c) of the Income Tax Act, 1961. Assessee's Contention: The judgment does not record any specific arguments made by the assessee before the High Court. Revenue's Contention: The Revenue contended that the ITAT's deletion of the penalty was erroneous. The Revenue likely argued that the non-allowable claims made by the assessee should have led to the imposition or affirmation of the penalty, as it indicated either concealment of income or furnishing of inaccurate particulars. The Revenue's appeal is premised on the belief that a substantial question of law arises from the ITAT's order.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

ITA No.273 of 2017

Page 1 of 2

$~3 * IN THE HIGH COURT OF DELHI AT NEW DELHI +

ITA 273/2017

PR. COMMISSIONER OF INCOME TAX-6, NEW DELHI ..... Appellant Through: Mr. Asheesh Jain, Senior Standing Counsel with Mr. Vikrant A. Maheshwari, Advocate

versus

M.S. SHOES EAST LTD.

..... Respondent

Through: None

CORAM: JUSTICE S.MURALIDHAR JUSTICE CHANDER SHEKHAR

O R D E R %

09.05.2017

1.

This is a penalty appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (‘Act’) against an order dated 20th September, 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 946/Del/2013 for the Assessment Year (‘AY’) 2001-02.

2.

Against the order of the Commissioner of Income Tax (Appeal) affirming the penalty imposed by the Assessing Officer, the Assessee went before the ITAT, which, by the impugned order, deleted the penalty.

3.

What weighed with the ITAT was that there was no actual concealment of income or furnishing of inaccurate particulars of income by the Assessee. The Assessee was found to have made a few claims which are found not allowable. That, by itself, could not lead to an inference as regards the

ITA No.273 of 2017

Page 2 of 2

concealment of income. The view taken by the ITAT based on the decision of the Supreme Court in Commissioner of Income-tax, Ahmedabad v. Reliance Petroproducts P. Ltd. [2010] 322 ITR 158 (SC) is a plausible view to be taken.

4.

No substantial question of law arises. The appeal is dismissed.

S.MURALIDHAR, J

CHANDER SHEKHAR, J MAY 09, 2017 tp

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