COMMR.OF INCOME TAX-XVIII,DELHI vs. BANK OF NOVA SCOTIA

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C.A. No.-001704-001704 - 2008Supreme Court07 January 20162 pages
For Petitioner: B. V. BALARAM DASFor Respondent: JAGJIT SINGH CHHABRA
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court agreed with the High Court that no substantial question of law arose. The Court found that the facts and law were correctly assessed by the lower appellate authorities, and therefore, the appeal lacked merit.

What were the facts?

The case concerns the assessment of penalty under Section 271-C of the Income Tax Act. The Commissioner of Income Tax (Appeals) had deleted the penalty, and the Income Tax Appellate Tribunal upheld this deletion. The Revenue's appeal to the High Court was dismissed for not raising a substantial question of law.

What were the issues?

The primary issue was whether the penalty levied under Section 271-C was justified. This involved determining if there was contumacious conduct on the part of the assessee, and if a substantial question of law arose from the Tribunal's decision.

Which sections of the Income-tax Act were involved?

Section 271-C

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Page 1 JUDGMENT NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1704 OF 2008 COMMR.OF INCOME TAX-XVIII, APPELLANT DELHI

VERSUS BANK OF NOVA SCOTIA RESPONDENT J U D G M E N T KURIAN, J. 1. The short issue pertains to the assessment of penalty under Section 271-C of the Income Tax Act, 1961. Against the order of Assessing Officer, the respondent took up the matter in appeal and the Commissioner of Income Tax (Appeals) deleted the levy of penalty. 2. The matter was pursued by the Revenue before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal vide order dated 31.03.2006 entered the following findings: “11..We have carefully considered the rival submissions. In the instant case we are not dealing with collection of tax u/s 201(1) or compensatory interest u/s 201(1A). The case of the assessee is that these amounts have already been paid so as to end dispute with Revenue. In the present appeals we are concerned with levy of 1

Page 2 JUDGMENT penalty u/s 271-C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court have deleted levy of penalty u/s 271-C in the cae of M/s. Itochu Corporation, reported in 268 ITR 172 (Del) and in the case of CIT Vs. Mitsui & Company Ltd. reported in 272 ITR 545. Respectfully following the aforesaid judgments of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee's appeal and cancel the penalty as levied u/s 271-C.” 3. Being aggrieved, the Revenue took up the matter before the High Court of Delhi against the order of the Income Tax Appellate Tribunal. The High Court rejected the appeal only on the ground that no substantial question of law arises in the matter. 4. On facts, we are convinced that there is no substantial question of law, the facts and law having properly and correctly been assessed and approached by the Commissioner of Income Tax (Appeals) as well as by the Income Tax Appellate Tribunal. Thus, we see no merits in the appeal and it is accordingly dismissed. No costs.

………………………………………………J. (KURIAN JOSEPH) …………………………………………………………J. (ROHINTON FALI NARIMAN) New Delhi; January 07, 2016

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