COMMISSIONER vs. M./S LEELA SONS BREWERIES PVT.LTD

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ITR/28/1995HC Madhya PradeshMPHC01001734199510 January 20182 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the proposed substantial questions of law did not arise for adjudication in the facts and circumstances of the case. The Court observed that the Tribunal's reasoning was perfectly in accordance with law. The Tribunal had noted that the assessee, upon receiving notice for non-filing and delayed filing of the advance surtax return, immediately deposited the tax and subsequently filed the return. Crucially, the Tribunal found that the penalty order was passed under Section 8 of the Companies (Profits) Surtax Act, 1964, which was not considered a 'Regular Assessment' as defined by the Act itself (meaning assessment under Section 6). Therefore, the Tribunal's decision to cancel or reduce the penalty was upheld. The application filed by the Revenue was dismissed.

What were the facts?

The Revenue (Commissioner of Income Tax) filed an application under Section 256(2) of the Income Tax Act, 1961, seeking to refer two questions of law to the Tribunal for decision. The case involved M/s Leela Sons Breweries Pvt. Ltd. The penalty in question was levied under Section 9-A of the Companies (Profits) Surtax Act, 1964, for non-filing and delayed filing of the advance surtax return. The Assessing Officer had initially levied a penalty of Rs. 14,000. The assessee, upon receiving a notice, deposited the tax and filed the return. The Income Tax Appellate Tribunal had previously rejected the Revenue's application under Section 256(1) of the Income Tax Act.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the penalty levied by the Assessing Officer under Section 9-A of the Companies (Profits) Surtax Act, 1964? 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in reducing the penalty levied under Section 9(a) of the Companies (Profits) Surtax Act to a nominal figure of Rs.3,000/- as against Rs.14,000/- levied by the Assessing Officer? The Revenue contended that the Tribunal was not justified in cancelling or reducing the penalty. The assessee argued that upon notice, they immediately deposited the tax and filed the return. The Tribunal's reasoning, as per the High Court's observation, was that the penalty order under Section 8 of the Companies (Profits) Surtax Act, 1964, was not an order passed in a 'Regular Assessment' as defined under the Surtax Act. The Tribunal relied on the decision in Commissioner of Income Tax Vs. Mamta Tiwari, 1988 171 ITR 59 MP.

Which sections of the Income-tax Act were involved?

Section 256(2),Section 256(1),Section 9-A,Section 8,Section 6

AI-generated summary — verify with the full judgment below

THE HIGH COURT OF MADHYA PRADESH I.T.R. No.28/1995 (Commissioner of Income Tax Vs. M/s Leela Sons Breweries Pvt. Ltd.) - 1 - Jabalpur, Dated : 10-01-2018 Shri Sanjay Lal, learned counsel for the applicant. Heard on the question of admission. The Revenue has filed this application under Section 256 (2) of the Income Tax Act, 1961 requesting for referring the following questions of law for decision to the Tribunal :- (a) Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the penalty levied by the Assessing Officer under Section 9-A of Companies (Profits) Surtax Act, 1964? (b) Whether on the facts and in the circumstances of the case the Tribunal was justified in law in reducing the penalty levied under Section 9(a) of Companies (Profits) Surtax Act to a nominal figure of Rs.3,000/- as against Rs.14,000/- levied by the Assessing Officer? We have heard the learned counsel for the Revenue at length. It is observed from a perusal of the order passed by the Income Tax Appellate Tribunal rejecting the application filed by the applicant Revenue under Section 256 (1) of the Income Tax Act, that the order was passed by the Assessing authority after issuance of notice to the assessee in respect of non-filing of the return and on account of delayed filing of the return relating to advance surtax. The Tribunal has observed that pursuant to the aforesaid notice, the assessee immediately deposited the tax in respect of non- filing of the return and thereafter also filed the return. THE HIGH COURT OF MADHYA PRADESH I.T.R. No.28/1995 (Commissioner of Income Tax Vs. M/s Leela Sons Breweries Pvt. Ltd.) - 2 - The Tribunal has also taken note of the fact that consequent upon the issuance of the aforesaid notice, the Assessing Authority passed an order imposing penalty upon the assessee under Section 8 of the Companies (Profits) Surtax Act, 1964, which is not an order passed in the proceeding of regular assessment as the term "Regular Assessment" has been defined under the Surtax Act itself to mean the assessment made under Section 6 of the Surtax Act and not the assessment made under Section 8 thereof. The Tribunal taking into consideration the aforesaid legal provisions of law as well as the decision rendered in the case of Commissioner of Income Tax Vs. Mamta Tiwari, 1988 171 ITR 59 MP, has rejected the application filed by the Revenue seeking reference. Having perused the record as well as the impugned order, we are of the considered opinion that the proposed substantial question of law do not arise for adjudication in the facts and circumstances of the present case. The application filed by the applicant Revenue is, accordingly, dismissed as the reasoning given by the Tribunal is perfectly in accordance with law and does not warrant any interference. (R. S. Jha) (Nandita Dubey) J U D G E

J U D G E pp. Digitally signed by PUSHPENDRA PATEL Date: 2018.01.11 13:20:32 +05'30'

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