Rajasthan H.C : Whether, on the facts and circumstances of the case the Tribunal is justified in cancelling the penalty under s. 271(1)(a) on the ground that the assessee was ignorant of law whereas the facts indicate that he defied the law even after service of notice ?

High Court Of Rajasthan

CIT vs. Fateh Dangi

Section 256(2)

Rajesh Balia & Sunil Kumar Garg, JJ.

D.B. IT Ref. No. 5 of 1997

12th February, 2001

Counsel Appeared

Sandeep Bhandawat, for the Petitioner : Anjay Kothari, for the Respondent

ORDER

BY THE COURT :

Heard learned counsel for the parties.

2. This is an application under s. 256(2) of the IT Act, 1961 (for short ‘the Act of 1961’), for directing the Tribunal, Jaipur Bench, Jaipur, to state the case and refer the following questions of law said to be arising out of its order, dt. 17th Jan., 1995, passed in ITA No. 89/Jp/95, because an application under s. 256(1) has been rejected by the Tribunal on 22nd Jan., 1996 by holding that no question of law arises out of appellate’s order : “Whether, on the facts and circumstances of the case the Tribunal is justified in cancelling the penalty under s. 271(1)(a) on the ground that the assessee was ignorant of law whereas the facts indicate that he defied the law even after service of notice ?” “Whether the Tribunal’s order cancelling the penalty under s. 271(1)(a) is not perverse ?”

It has been stated by the learned counsel for the respondent that since filing of the present application and during the pendency of this case the Central Board of Revenue has promulgated Kar Vivad Samadhan Scheme, 1998, popularly known as KVSS under s. 90(2) r/w s. 91 of the Act of 1998 granting immunity from the existing liabilities of penalty and interest on making of requisite payment under that scheme as determined by Designated Authority under the Scheme and on obtaining the certificate thereunder. On such payment the pending proceedings in respect of demands covered by such KVSS shall stand abated.

Learned counsel further submits that the respondent-assessee has availed of the benefit of KVSS and has been issued certificate to that effect for the assessment year in question on 8th April, 1999, certifying that the Designated Authority by order dt. 25th Jan., 1999, has determined the amount of Rs. 10, 284 payable by the declarant in accordance with the provisions of the scheme and declarant has paid said sum on 4th Feb., 1999, and granting immunity from the imposition of penalty under the Act of 1961, in respect of matters covered in the aforesaid declaration.

In view of aforesaid circumstances, we are of the opinion that the question raised in the present case has become of academic importance. Now no penalty can be imposed which already stood deleted when the KVSS came into existence and the benefit has been availed of by the assessee on paying amount determined under the Scheme by the Designated Authority thereunder.

Accordingly, this application is dismissed as having abated. There shall be no order as to costs.

[Citation : 250 ITR 593]

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