Punjab-Haryana High Court
The Commissioner Of Income-Tax vs M.M.Rice Mills on 25 September, 2008
Author: Ajay Tewari
Bench: Adarsh Kumar Goel, Ajay Tewari
I.T.A No. 86 of 2006 ::1::
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
I.T.A No. 86 of 2006
Date of decision : September 25, 2008
The Commissioner of Income-tax, Panchkula
...... Appellant.
through Mr.Yogesh Putney, Sr. Standing
counsel.
v.
M/S Iqbal Singh & company
...... Respondent
through Mr.Sunish Bindlesh, Advocate
CORAM : HON'BLE MR.JUSTICE ADARSH KUMAR GOEL
HON'BLE MR.JUSTICE AJAY TEWARI
***
1. Whether Reporters of Local Newspapers may be allowed to see the judgment ?
2. To be referred to the Reporters or not ?
3. Whether the judgment should be reported in the Digest ?
*** AJAY TEWARI, J The revenue is before this Court against the order dated 27.6.2005 of the Income Tax Appellate Tribunal, Chandigarh Bench allowing the appeal of the assessee against the orders dated 5.9.2002 passed by the Commissioner of Income-tax, and dated 16.5.2001 whereby a penalty under Section 271(1)(c) of the Income Tax Act, 1961 was imposed upon the assessee.
This appeal proposes the following substantial questions of law:-
"1. On the facts and in the circumstances of the case, whether the learned ITAT was right in law in deleting the I.T.A No. 86 of 2006 ::2::
penalty imposed by the AO under section 271(1)(c) of the Act which was confirmed by the ld CIT (A) also ?
2) On the facts and in the circumstances of the case whether Explanation to section 271(1)(c) needs to be specifically adverted to in an exparte order levying penalty under section 271(1)(c), when the provisions of section 271(1)(c) are otherwise attracted ?
For the assessment year 1990-91, a penalty of Rs.1,38,454/- was levied upon the assessee which was confirmed by the Commissioner. In appeal, the Tribunal found that the Commissioner of Income Tax (A), while confirming the penalty, no where stated that the assessee had not disclosed all the facts to compute the income. It also found that the addition to income had been made on the basis of an estimate but without bringing any material on record which could substantiate that there was a failure on the part of the assessee to return correct income due to fraud or willful neglect or furnishing of inaccurate particulars of income.
This Court in CIT vs M.M.Rice Mills, 253 ITR 17 held as follows :-
".... Merely because the additions have been made to income under the proviso to section 145(1) of I.T.Act, 1961 by adopting the view that the gross profit shown in the books of account was too low as there were defects in the method of accounting employed it would not automatically lead to the conclusion that there was failure to return the correct income by means of fraud or gross or willful neglect.
I.T.A No. 86 of 2006 ::3::
We find no error in the judgment of the Tribunal. The above quoted judgment applies squarely to the facts of this case. In this view of the matter, we hold that the questions proposed do not arise in this appeal and dismiss the same with, however, no order as to costs.
( AJAY TEWARI )
JUDGE
( ADARSH KUMAR GOEL )
JUDGE
September 25, 2008
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