Principal Commissioner Of Income Tax 1 vs. Shri Shyam Manohar Agrawal

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ITA/28/2016HC Madhya Pradesh23 January 2017Bench: HON'BLE THE ACTING CHIEF JUSTICE2 pages
For Petitioner: Sanjay Lal
AI SummaryRemanded

What did the High Court hold?

The High Court held that since the matters concerning the assessee for the same assessment years had been remanded back to the Assessing Officer for reconsideration on the same day, it was unnecessary for the competent authority to re-examine the question of imposing penalty and initiating proceedings under Section 271(1)(c) at that juncture. The Court found the Revenue's appeals to have been rendered infructuous. Liberty was granted to the Revenue to seek indulgence from the competent authority for initiating penalty proceedings if required, while finalizing the assessment order based on the remand. All legal questions involved were kept open to be considered at an appropriate stage. No specific finding was given on the legal question raised by the Revenue, as the appeals were disposed of on procedural grounds.

What were the facts?

These three appeals were filed by the Revenue against the respondent assessee for assessment years 2005-2006, 2006-2007, and 2007-2008. The assessee had previously filed appeals before the High Court (ITA Nos. 75/2013, 76/2013, and 77/2013) challenging orders passed by the Assessing Officer and Appellate Authority. The High Court, on the same day these Revenue appeals were heard, allowed the assessee's appeals in part and remanded the matters back to the Assessing Officer for reconsideration. The Revenue's grievance in the present appeals was that penalty proceedings initiated under Section 271(1)(c) had been interfered with by the Income Tax Appellate Tribunal solely because the assessee's appeals under Section 260A were pending before the High Court.

What were the issues?

1. Whether the initiation of penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961, can be quashed or interfered with merely because appellate proceedings under Section 260A are pending before the High Court. (Question of law) The Revenue contended that the pendency of appeals under Section 260A does not preclude the initiation of penalty proceedings. They relied on judgments of the Bombay High Court to support this argument. The Assessee's contentions were not explicitly recorded in the judgment regarding this specific issue, other than the fact that their appeals were pending and had been allowed in part with a remand.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

I.T.A. No. 25/2016, 26/2016, 28/2016

23/01/2017 Shri Sanjay Lal, learned counsel for the appellant. Shri A.P. Shrivastava, with Shri Abhijeet Shrivastava, learned counsel for the appellant. As the common questions of both law and facts are involved in all these three appeals filed by the revenue under Section 260-A of the Income Tax Appeal, they are being disposed of by this common order. For the Assessment year 2005-2006, 2006-2007 and 2007-2008 assessment orders were passed against the respondent assessee and they were finalized upto the stage of appeal, decided by the Income Tax Appellate Tribunal, challenging the orders passed by the Assessing Officer and the Appellate Authority, respondent/assessee filed appeals before this Court under Section 260-A being I.T.A. Nos.75/2013, 76/2013 and 77/2013, today by passing various orders, all these three appeals of the assessee have been allowed in part and matter has remanded back to the Assessing Officer for reconsideration. In these appeals filed by the Revenue their grievance is that penalty proceedings initiated under Section 270(1)(c) have been interfered with by the appellant authority, namely the Income Tax Appellate Tribunal only on account of the fact that appeal under Section 260(A) filed by the assessee have been admitted and they are pending consideration before this Court, being I.T.A. Nos.75/13, 76/13 and 77/13 and therefore, proceedings for penalty cannot be initiated. Shri Sanjay Lal, invited our attention to certain judgment of the Bombay High court and argued that merely because the appellate proceedings are pending under Section 260-A imposition of penalty and proceedings for the same cannot be quashed. Be that as it may be, the fact remains that today this court with regard to the same assessee has remanded the matter back to the Assessing Officer for reconsideration and, therefore, presently now in these appeals the question of imposition of penalty and initiating proceedings under Section 271(1)(c) need not to be looked into again by the competent authority and take a decision while proceedings with the assessment based on the remand made. Accordingly, finding all these appeals to have been rendered infructuous, they are disposed of granting liberty to the revenue to seek indulgence of competent authority in case required for initiating proceedings under Section 270-(1)(c), while finalizing the assessment order on the basis of remand made all the legal questions involved are kept open to be considered at an appropriate stage. With the aforesaid all the three appeals stand disposed of.

(Rajendra Menon) (H.P. Singh) Acting Chief Justice Judge

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