THE COMM OF INCOME TAX vs. KAMALKUMAR R. DUJODWALA (HUF)

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ITA/111/1999HC Bombay05 March 2007Bench: HON'BLE SHRI JUSTICE DR. S. RADHAKRISHNAN, HON'BLE SHRI JUSTICE J.P. DEVADHAR2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the findings recorded by the ITAT were purely findings of fact. Consequently, there was no substantial question of law involved in the matter. The ITAT's order was based on its conclusion that the CIT's letter requesting the assessees to file a petition under Section 273A constituted an implicit assurance to waive penalties. The Tribunal also observed that the assessees filed revised returns in light of this assurance, that there was no departmental material casting doubt on the genuineness of gifts, and that the department could have made further inquiries. As the High Court found no substantial question of law, it rejected the application. The operative direction was the rejection of the application, upholding the ITAT's deletion of penalties.

What were the facts?

This case involves an application by the Commissioner of Income Tax (Bombay City XIV) against an order of the Income Tax Appellate Tribunal (ITAT). The assessment year in question is 1978-1979. The ITAT had deleted penalties levied under Section 271(1)(c) of the Income Tax Act. The ITAT's order, dated August 21, 1998, found that a letter from the CIT requesting the assessees to file a petition under Section 273A implied an assurance to waive penalties. The assessees had filed revised returns based on this assurance. The ITAT also noted no departmental material casting doubt on the genuineness of gifts and that the department could have made further inquiries. The Bombay High Court admitted the application on June 23, 1999, on a substantial question of law.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the penalty levied under Section 271(1)(c) of the Income Tax Act. Assessee's Contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, the ITAT's reasoning, as quoted in the judgment, indicates that the assessees came forward with revised returns based on an implicit assurance from the CIT to waive penalties, and that there was no material to doubt the genuineness of gifts. Revenue's Contentions: The revenue, through the Commissioner of Income Tax, challenged the ITAT's deletion of penalties, arguing that a substantial question of law arose from the ITAT's order. The revenue's application to the High Court implies disagreement with the ITAT's findings.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 273A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPLICATION NO.111 OF 1999 INCOME TAX APPLICATION NO.111 OF 1999 INCOME TAX APPLICATION NO.111 OF 1999 The Commissioner of Income Tax Bombay City XIV, Bombay .. Applicant V/s Kamalkumar R.Dujodwala .. Respondent Mr.A.S.Rao for the Applicant. Ms.Beena Pillai i/by Mr.D.M.Harish & Co. for the Respondent. CORAM : DR.S.RADHAKRISHNAN CORAM : DR.S.RADHAKRISHNAN CORAM : DR.S.RADHAKRISHNAN & J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ. J.P.DEVADHAR, JJ.

DATE : 5th March, 2007. DATE : 5th March, 2007. DATE : 5th March, 2007. JUDGMENT:- (PER DR.S.RADHAKRISHNAN,J.) JUDGMENT:- (PER DR.S.RADHAKRISHNAN,J.) JUDGMENT:- (PER DR.S.RADHAKRISHNAN,J.) 1. Heard the learned Counsel for the parties. This application was admitted on 23rd June, 1999 with regard to the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the ITAT was right in law in deleting the penalty levied U/s.271(1)(c) of the I.T.Act, in each of the above cases". 2. The matter pertains to the Assessment Year 1978-1979. Perused the order of the Income Tax Appellate Tribunal dated 21.08.1998 wherein paragraph No.5 reads as under:- "5. It may be observed that the Tribunal came to the conclusion that the letter of CIT dated 5.3.84 requesting the assessees to file a petition u/s.273A as an implicit assurance to waive the penalties. It further observed that the assessees came forward with revised returns only in the light of this assurance and so the penalties in question were not leviable. It also observed that, there was no material with the department which cast any doubts on the genuineness of the gifts. It also observed that, nothing CNR No : HCBM020018331999 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:59:35

prevented the department from making further enquiries into the genuineness of the case, notwithstanding the fact that the assessees addressed their letter to the CIT requesting for settlement. In the circumstances, we are of the view that the order of the Tribunal is based only on finding of facts and no question of law arises from the Tribunal order. The applications are accordingly rejected. 3. The findings recorded by the Tribunal are the findings of facts. In view thereof, there is no substantial question of law involved in this matter. Hence, Application stands dismissed. (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (J.P.DEVADHAR, J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) (DR.S.RADHAKRISHNAN,J.) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:59:35 Powered by TCPDF (www.tcpdf.org)

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