Punjab & Haryana H.C : the order passed by the Tribunal before the insertion of section 271(1B) to the statute by the Finance Bill, 2008, cannot be said to be erroneous and the amended provisions of section 271(1B) are not applicable in the cases decided prior to the insertion of this amendment

High Court Of Punjab & Haryana

CIT vs. Smt. Parmatma Kaur

Assessment Year : 2002-03

Section : 271(1)(C)

Adarsh Kumar Goel And Mrs. Daya Chaudhary, JJ.

ITA No. 180 Of 2009 (O&M)

September  23, 2009

JUDGMENT
 
1. The Revenue has preferred this appeal under section 260A of the Income-tax Act, 1961 (for short, “the Act”), against the order of the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, dated September 16, 2008, passed in M. A. No. 64 for the assessment year 2002-03, proposing to raise the following substantial questions of law :

“(i) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is right in law in holding that the order passed by the Tribunal before the insertion of section 271(1B) to the statute by the Finance Bill, 2008, cannot be said to be erroneous and the amended provisions of section 271(1B) are not applicable in the cases decided prior to the insertion of this amendment ?

(ii) Whether the hon’ble Income-tax Appellate Tribunal was correct in law in ignoring the ratio of the judgment of the jurisdictional Punjab and Haryana High Court in the case of M/s. Nakodar Co-op. Sugar Mills Ltd., I. T. A. No. 441 of 2007 ?”

2. The Assessing Officer initiated penalty proceedings under section 271(1)(c) for concealing the particulars of income and after considering the matter, an order of levy of penalty was passed. The said order was set aside by the Commissioner of Income-tax (Appeals) following the decision of this court in CIT v. Munish Iron Store [2003] 263 ITR 484 . The Tribunal upheld the said order. The Revenue, inter alia, relied upon the amendment incorporating section 271(1B) inserted by the Finance Act, 2008, with effect from April 1, 1989.

3. Notice was issued in view of the earlier judgment of this court in CIT v. Pearey Lal and Sons (EP) Ltd. [2009] 308 ITR 438 (P&H). In spite of service, none appears for the assessee.

4. We have heard learned counsel for the Revenue.

5. In Pearey Lal and Sons (EP) Ltd. [2009] 308 ITR 438 (P&H), the earlier observations in Munish Iron Store [2003] 263 ITR 484 were duly explained and after referring to further developments in various judgments, it was held that whether satisfaction existed and was not recorded during assessment was not a matter of form but of substance and the absence of satisfaction could not be inferred from the omission to use particular words in the order of assessment. The same could be inferred from overall findings in the order of the assessment. Accordingly, the Tribunal was directed to take fresh decision on the issue of penalty. The present appeal is covered by the said judgment.

6. In view of the above, this appeal is allowed and the matter is remitted to the Tribunal for fresh decision on the issue of penalty, in accordance with law.

[Citation : 335 ITR 589]

Leave a Reply

Your email address will not be published. Required fields are marked *