Punjab & Haryana H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the entire penalty even when the assessee was not able to substantiate his explanation and he also failed to prove that all the facts material to the computation of his total income were disclosed by him ?

High Court Of Punjab & Haryana

CIT vs. Prem Dass

Section 260A

G.S. Singhvi & Nirmal Singh, JJ.

IT Appeal No. 152 of 1999

2nd August, 2000

Counsel Appeared

R.P. Sawhney with Rajesh Bindal, for the Appellant : None for the Respondent

JUDGMENT

G.S. SINGHVI, J. :

This is an appeal by the Revenue for directing the Income-tax Appellate Tribunal, Delhi Bench, (SMC) Delhi (hereinafter described as “the Tribunal”), for reference of the following questions of law :

“(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the entire penalty even when the assessee was not able to substantiate his explanation and he also failed to prove that all the facts material to the computation of his total income were disclosed by him ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the entire penalty simply because the additions were made on estimate basis, in total disregard of the fact that such estimate was necessitated on account of the assessee’s failure to maintain and produce primary record of his business ?

(iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the entire penalty even when Expln. 1(B) to s. 271(1)(c) was clearly applicable on the facts of this case which is integral part of the section as held by the Punjab & Haryana High Court in the case of Capital Cinema vs. CIT (1989) 80 CTR (P&H) 131 : (1989) 179 ITR 628 (P&H) : TC 50R.824 ?”

2. The assessee is engaged in the transport business. In response to the notice issued under s. 148 of the IT Act, 1961 (for short, “the Act”), he filed a return of income on 3rd July, 1986, declaring the income of Rs. 35,270. The assessing authority did not accept the return and assessed his income at Rs. 2,55,630. The CIT(A) assessed the income at Rs. 1,85,565. His order was upheld by the Tribunal. Thereafter, the assessing authority initiated penalty proceedings under s. 271(1) (c) of the Act and levied penalty of Rs. 1,04,405. The CIT(A) upheld the order of penalty, but the Tribunal set aside the order of the assessing authority and the appellate order mainly on the ground that the difference between the returned and the assessed income was due to difference of opinion about the estimated rates of income and expenditure.

3. We have heard Shri R.P. Sawhney, who fairly stated that the question similar to question No. (iii) (noted hereinabove) was considered and answered by this Court against the Revenue in ITC No. 14 of 1998, CIT vs. Prem Das (decided on 11th May, 1999) [reported at (2001) 167 CTR (P&H) 158], but argued that the other points would require consideration by the Court. We have carefully perused the record and are of the opinion that the present case is fully covered by the order dt. 11th May, 1999 CIT vs. Prem Das (supra) passed in ITC No. 14 of 1998 (supra) and there is no valid ground to take a different view. The submission of Shri Sawhney that other points raised in this appeal require consideration has no merit because all the points sought to the raised by the appellant are interrelated and in view of the decision of the main issue against the Revenue, the other points do not need further elucidation. Hence, the appeal is dismissed. The detailed reasons recorded in the order dt. 11th May, 1999 passed in ITC No. 14 of 1998 shall be read as part of this order.

[Citation : 248 ITR 237]

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