THE COMMISSIONER OF INCOME TAX vs. UMESH MOTILAL SANCHETI

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ITA/17/2012HC BombayHCBM03018823201206 September 2013Bench: HON'BLE SHRI JUSTICE B.P. DHARMADHIKARI,HON'BLE SHRI JUSTICE RAVINDRA V. GHUGE2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court found no substantial question of law arising in the matter. Consequently, the appeal filed by the Commissioner of Income Tax was rejected. The ITAT's decision to set aside the penalty under Section 271(1)(c) for the assessment year 2007-08 was upheld by the High Court. The reasoning for this decision was that the High Court did not perceive any legal infirmity in the ITAT's order that warranted interference. The operative direction was the rejection of the appeal, meaning the penalty for AY 2007-08 remained set aside as per the ITAT's order. No issues were expressly left undecided.

What were the facts?

The Commissioner of Income Tax (CIT) appealed against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had set aside a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2007-08. The revenue's contention was that the ITAT erred in holding that no penalty could be levied because the assessee had time to file the return of income under Section 139(1) for that year. The assessee argued that a raid conducted on 22-11-2006 supported the ITAT's view. While the ITAT upheld the penalty for assessment year 2006-07, it quashed it for 2007-08. The return for assessment year 2007-08 was due by 1-7-2007 and was filed on 4-12-2007.

What were the issues?

1. Whether the Income Tax Appellate Tribunal was correct in holding that a penalty under Section 271(1)(c) of the Income Tax Act, 1961, could not be levied for assessment year 2007-08, given that the assessee had time to file the return of income under Section 139(1)? Assessee's Contention: The assessee argued that the ITAT's view was correct, citing a raid conducted on 22-11-2006 as support. Revenue's Contention: The revenue contended that the ITAT was wrong in its holding. The Assistant Solicitor General argued that time was available for filing the return and raised substantial questions of law regarding the penalty levy. The return for assessment year 2007-08 was due by 1-7-2007 and was filed on 4-12-2007.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

(1) IN THE HIGH COURT OF JUDICATURE AT BOMBAY, AURANGABAD BENCH, AT AURANGABAD.

Income Tax Appeal No. 17 of 2012

The Commissioner of Income Tax, Aayakar Bhavan, Near Holy Cross School, Cantonment, Aurangabad. .. Appellant.

versus Shri Umesh Motilal Sancheti, Navjeevan Colony, Depot Road, Vaijapur, District : Aurangabad. .. Respondent. ......................... Mr. Alok Sharma, Assistant Solicitor General, for the appellant. Mr. R.R. Chandak, Advocate, for the respondent. ..........................

CORAM : B.P. DHARMADHIKARI & RAVINDRA V. GHUGE, JJ.

DATE : 6TH SEPTEMBER 2013

COURT'S ORDER (Per B.P. Dharmadhikari, J.) : 1. Heard learned ASGI Mr. Alok Sharma for the appellant, and Adv. Mr. R.R. Chandak for the respondent.

(2) 2. Contention is, the ITAT is wrong in holding that as the respondent / assessee had time to file return of income tax under Section 139(1) of the Income Tax Act, 1961, for assessment year 2007-08, the penalty could not have been levied under Section 271(1)(c) for the said year. Learned ASGI Mr. Alok Sharma, in the light of contention, that time was not available begs to raise questions of law stated in para 12, as substantial questions. 3. Learned Counsel for the respondent / assessee is strenuously opposing the appeal. He contends that the raid was conducted on 22-11-2006 and hence the view taken by ITAT is correct. 4. The date of raid is not in dispute. The ITAT has upheld the action of the Department in so far as assessment year 2006-07 is concerned. However, for the assessment year 2007-08, it has set aside the penalty. According to learned ASGI Mr. Alok Sharma, the return for assessment year 2007-08 needed to be filed by 1-7-2007 and the same has been filed on 4-12-2007. 5. We do not find any substantial question of law arising in the matter. Hence, Appeal is rejected.

( RAVINDRA V. GHUGE ) ( B.P. DHARMADHIKARI )

JUDGE JUDGE ................................ bgp/ita17

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