THE COMMISSIONER OF INCOME TAX vs. N. NAYAN KUMAR and CO.

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ITA/57/1999HC 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 Income Tax Appellate Tribunal (ITAT) had merely made findings of fact. The Court observed that the ITAT's order indicated that the Departmental Representative could not produce any material to support the allegations of inflated labour charges or under/over invoicing of sales and purchases. Consequently, the High Court found that there was no substantial question of law involved in the applications filed by the Commissioner. Therefore, the applications were dismissed. The ratio decidendi is that an appeal to the High Court under Section 260A (though not explicitly mentioned, implied by the nature of the application) lies only on a substantial question of law, and mere findings of fact by the ITAT do not warrant interference.

What were the facts?

These three Income Tax Applications (Nos. 53/1999, 57/1999, and 58/1999) were filed by the Commissioner of Income Tax, Mumbai City VII, against M/s. N. Nayankumar & Co. Application No. 53/1999 pertains to Assessment Year 1979-80, while Applications Nos. 57/1999 and 58/1999 relate to Assessment Year 1981-82. The applications were admitted by the High Court on April 22, 1999, and June 23, 1999, respectively. The core of the dispute revolves around the Income Tax Appellate Tribunal's (ITAT) decision to delete penalties imposed under Section 271(1)(c) of the Income Tax Act, 1961.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was justified in deleting the penalty under Section 271(1)(c) of the I.T. Act, 1961? Assessee's Contention: The judgment does not record any specific arguments made by the assessee. Revenue's Contention: The revenue, represented by the Commissioner of Income Tax, challenged the ITAT's deletion of penalties. The ITAT, in its order dated July 21, 1998, noted that the Departmental Representative was asked to point out material supporting the inference of inflated labour charges or under/over invoicing of sales and purchases, but no such material was found on record. The revenue's application to the High Court implies disagreement with this finding and the subsequent deletion of penalties.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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.53 OF 1999 INCOME TAX APPLICATION NO.53 OF 1999 INCOME TAX APPLICATION NO.53 OF 1999 The Commissioner of Income Tax Mumbai City VII, Mumbai .. Petitioner V/s M/s.N.Nayankumar & Co. .. Respondent INCOME TAX APPLICATION NO.57 OF 1999 INCOME TAX APPLICATION NO.57 OF 1999 INCOME TAX APPLICATION NO.57 OF 1999 The Commissioner of Income Tax Mumbai City VII, Mumbai .. Petitioner V/s M/s.N.Nayan kumar & Co. .. Respondent INCOME TAX APPLICATION NO.58 OF 1999 INCOME TAX APPLICATION NO.58 OF 1999 INCOME TAX APPLICATION NO.58 OF 1999 The Commissioner of Income Tax Mumbai City VII, Mumbai .. Petitioner V/s M/s.N.Nayan kumar & Co. .. Respondent Mr.A.Kotangale for the Petitioner. Mr.B.V.Jhaveri 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: JUDGMENT: JUDGMENT: (PER DR.S.RADHAKRISHNAN,J.) (PER DR.S.RADHAKRISHNAN,J.) (PER DR.S.RADHAKRISHNAN,J.) 1. Heard the learned Counsel for the parties. The Application No.53/1999 pertains to the Assessment Year 1979-80, and the Application Nos.57/1999 & No.58/1999 pertain to the Assessment Year 1981-82. The Application No.53/1999 was admitted on 22.4.1999 and the Application Nos.57/1999 & 58/1999 were admitted on 23.6.1999, on the following substantial question of law :- "Whether on the facts and in the circumstances of the case, the ITAT was justified in deleting penalty under Section 271(1)(c) of the I.T.Act, 1961?" CNR No : HCBM020009931999 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 05:59:32

2.

Perused the order of the Income Tax Appellate Tribunal dated 21st July, 1998 wherein the Tribunal has observed as under:- "..... The Tribunal asked the Departmental Representative to point out to any material on the basis of which it could be inferred that the assessee had inflated labour chargs and indulged in under or over invoicing of sales and purchases etc. No material was found on record to support the observation." 3. The Tribunal has merely given findings of facts. There is no substantial question of law involved in these applications. Hence, the aforesaid Applications stand 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 05:59:32 Powered by TCPDF (www.tcpdf.org)

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