Calcutta High Court
Commissioner Of Income-Tax vs R.G. Sales (P.) Ltd. on 7 March, 2005
Equivalent citations: (2005)199CTR(CAL)277, [2005]278ITR140(CAL)
Bench: D.K. Seth, Soumitra Pal
JUDGMENT
1. The application for condonation of delay was vehemently opposed by the learned advocate for the respondent. He contended that there was time gap, which are unexplained. The learned advocate for the appellant, on the other hand, contended that the delay has been sufficiently explained.
2. After having heard learned Counsel for the parties, we find that the delay has sufficiently been explained. Accordingly, we allow the application for condonation of delay. Delay is condoned. The application under Section 5 of the Limitation Act is allowed.
3. Let the appeal be registered.
4. After the delay is condoned, the learned advocates for the parties have addressed the court on the merits of the case and insisted upon for taking up the appeal for admission. At this stage of admission of hearing, we have permitted the learned advocate for the respondent to address on the question of admission though formally he is not entitled to any hearing at this stage.
5. After having heard the learned advocate for the appellant, it appears that the only question that emerges is as to whether the penalty imposed under Section 271(1)(c) can be cancelled by the learned Tribunal or the appellate authority.
6. The question seems to be covered by the decision in the case of CIT v. Prithipal Singh and Co. since affirmed by the apex court in the case of CIT v. Prithipal Singh and Co. .
7. In the present case, a loss return was shown by reason of the alleged concealment. The loss remained static and there was no change on the loss. It was found that there was no concealment, inasmuch as, though this amount was debited in the purchase account, but the same having been credited in the closing stock, the amount debited was cancelled by the credit. Thus, the loss remained the same.
8. In these circumstances, we do not find that any substantial question of law is involved in this appeal. At the same time, the law as it stood, for the assessment year 1996-97, the penalty could be imposed under Section 271(1)(c) of the Income-tax Act, 1961, if by reason of inaccurate account furnished by the assessee tax was evaded. Inasmuch as Section 271 prescribes, in such a case, that the penalty should be not less than but not exceeding three times the amount of tax evaded, in case no tax is found to have been evaded, there is no scope for imposing penalty equal to the tax payable. Sub-Clause (iii) makes it clear that the penalty contemplated under Clause (c) can be imposed if tax is sought to be evaded by reason of furnishing of inaccurate particulars of such income. Unless any tax is evaded, penalty cannot be imposed. At the same time, Sub-clause (iii) itself indicates that the minimum amount of penalty to be imposed should be equal to but not exceeding three times the amount of tax sought to be evaded by reason of furnishing inaccurate particulars. If a loss is shown and no tax is payable on account of alleged furnishing of inaccurate particulars of income, in that event, no penalty could be imposed in the absence of the unit on the basis of which the penalty can be imposed in terms of Section 271(1)(c)(iii).
9. In these circumstances, no substantial question of law is involved. The appeal is, therefore, dismissed.
10. All parties are to act on a xerox signed copy of this dictated order on the usual undertaking.