High Court Of Delhi
CIT vs. R.P. Singh & Co. (P.) Ltd
Section : 271D
Dipak Misra, CJ.And Manmohan, J.
IT Appeal No. 1365 Of 2010
September 20, 2010
JUDGMENT
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1. Heard Ms. Rashmi Chopra, learned counsel for the Revenue and Mr. U.S. Kochar, learned counsel for the assessee.
2. The respondent-assessee had received share application money amounting to Rs. 13,90,000 from 29 persons and the said amount was treated as loans or advances by the Assessing Officer and eventually a penalty of Rs. 13,90,000 under section 271D of the Income-tax Act, 1961 (for brevity “the Act”) was imposed for certain reasons.
3. Being grieved, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) who allowed the appeal on the foundation that the Assessing Officer had treated the receipts of share application money as undisclosed income of the assessee under section 68 of the Act and hence the initiation of penalty proceedings under section 269SS read with section 271D is not valid as the said proceeding nullifies the finding that it is a deposit.
4. Being grieved by the aforesaid order, the Revenue preferred an appeal before the Income-tax Appellate Tribunal (for short “the Tribunal”) and the Tribunal accepted the order of the Commissioner of Income-tax (Appeals) on the foundation that once the share application money is treated as an undisclosed income, the penalty proceedings under section 271D could not have been initiated.
5. Ms. Rashmi Chopra, learned counsel for the Revenue, has referred to question (a) as substantial question of law to be arising which emerges for consideration in this appeal. The said question reads as under :
“Whether the learned Income-tax Appellate Tribunal erred in law and on the merits in deleting the penalty under section 271D of the Income-tax Act, 1961, by holding that share application money received in cash was not deposit in contravention of section 269SS of the Income-tax Act, 1961 ?”
6. Mr. Kochar, learned counsel for the assessee, submitted that the said question does not arise in the case at hand inasmuch as both the Commissioner of Income-tax (Appeals) and the Tribunal have recorded a finding that once the Assessing Officer has treated it as an undisclosed income, it could not have proceeded on the foundation that it is a deposit. In our considered opinion, this submission canvassed by Mr. Kochar has substantial force and the question raised by the Revenue really does not arise in this case. Needless to say that the said question may arise where the facts would be different but the same has no relevance to the case at hand. In view of the aforesaid analysis, the appeal being devoid of merit stands dismissed without any order as to costs.
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[Citation : 340 ITR 217]
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