The High Court dismissed the revenue's appeal. It held that the penalty under Section 271(1)(c) of the Income-tax Act was unsustainable as the lower authorities found the inadmissible claim was made under a bonafide mistake, not for tax evasion.
The appeal was dismissed. The penalty on the income tax was set aside.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
Income-tax Appeal No.725 of 2010
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IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Income-tax Appeal No.725 of 2010 Date of decision: 5.1.2011
Commissioner of Income-Tax, Hisar
...Appellant
Versus
B.B.Singhal
...Respondent
CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL
Present: Mr. K.K.Mehta, Advocate for the appellant.
ADARSH KUMAR GOEL, J ( Oral)
“Whether on the facts and circumstances of the case, the Hon'ble ITAT was right in law in deleting the penalty without appreciating the fact that the assessee furnished inaccurate particulars of income
by relying upon hearsay and unreliable interpretation of legal provisions?”
Income-tax Appeal No.725 of 2010
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“We have considered the rival submissions and perused the material placed on record. Ld. AR of the assessee relied on the decision of the Hon'ble High Court of Rajasthan in the case of A.R.Enterprises Pvt. Ltd. Vs. CIT, reported in (2008) 215 CTR 306 in which referring the judgment of the Hon'ble Supreme Court in the case of Dilip N. Shroff Vs. JCIT, (2007) 210 CTR (SC) 228 deleted the penalty imposed u/s 271 (1)(c) of the Act. Ld. AR of the assessee also cited the decision in the case of CIT Vs. Mica Wood Pvt. Ltd. reported in 170 Taxman 256 (Del.) in support of the claim of the assessee. Keeping in view the findings made by the Commissioner of Incometax (appeals) in his order and also the aforesaid judgments cited by the ld. AR, we are of the view that the
Income-tax Appeal No.725 of 2010
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penalty levied by the Assessing Officer deserves to be deleted. We, therefore, uphold the order of the Commissioner of Income-tax (appeals) and dismiss the appeal of the revenue.”
provision being clear seeking claim of deduction on entire amount of gratuity amounts to giving inaccurate particulars of income. Reliance has been placed on Commissioner of Income-Tax Vs. Zoom Communication P. Ltd. [2010] 327 ITR 510 (Delhi). It was
also submitted that judgment of the Hon'ble Supreme Court in Dilip N. Shroff Vs. JCIT, (2007) 210 CTR (SC) 228 referred by the Tribunal has been overruled in subsequent judgment in Union of India and others Vs. Dharamendra Textile Processors and others (2008) 13 Supreme Court Cases 369.
5. We are unable to accept the submission.
Income-tax Appeal No.725 of 2010
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present case. The contention on behalf of the revenue that judgment in Dilip N. Shroff was no longer good law has also no relevance. Even after the judgment in Dharminder Textiles, the requirement of Section 271(1)(c) of the Act has to be complied with to levy penalty. If the assessee has furnished valid explanation that its claim was put forward under mistaken bonafide belief and not to evade tax, setting aside of penalty cannot be held to be illegal. No substantial question of law arises. Accordingly, the appeal is dismissed.
(Adarsh Kumar Goel) Judge January 05,2011 (Ajay Kumar Mittal) Pka Judge
2 issues framed by the court
Whether the taxing authority was justified in deleting the penalty despite the assessee furnishing inaccurate particulars of income?
Whether a claim of exemption put forward under a bonafide mistaken view constitutes furnishing inaccurate particulars of income punishable under Section 271(1)(c)?
Colour shows how this judgement treated each authority
A.R. Enterprises Pvt. Ltd. Vs. CITReferred¶22
(2008) 215 CTR 306
Dilip N. Shroff Vs. JCITDistinguished¶22
(2007) 210 CTR (SC) 228
CIT Vs. Mica Wood Pvt. Ltd.Referred¶22
170 Taxman 256 (Del.)
Commissioner of Income-Tax Vs. Zoom Communication P. Ltd.Distinguished¶29
[2010] 327 ITR 510 (Delhi)
Union of India and others Vs. Dharamendra Textile Processors and othersDistinguished¶30
(2008) 13 Supreme Court Cases 369
3 provisions across 1 enactments
Commissioner of Income-Tax, Hisar
B.B. Singhal
Adarsh Kumar Goel
Ajay Kumar Mittal
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
