Supreme Court - Daily Orders
Commissioner Of Income Tax,Panchkula vs M/S Jai Laxmi Rice Mills Ambala City on 20 November, 2015
Bench: A.K. Sikri, Rohinton Fali Nariman
1
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 1457/2008
COMMISSIONER OF INCOME TAX,PANCHKULA APPELLANT(S)
VERSUS
M/S JAI LAXMI RICE MILLS AMBALA CITY RESPONDENT(S)
WITH
CIVIL APPEAL No. 3614/2012
O R D E R
In these appeals, we are concerned with the question as to whether penalty proceeding under Section 271D of the Income Tax Act (hereinafter referred to as “the Act”) is independent of the assessment proceeding and this question arises for consideration in respect of Assessment Years 1991-1992 and 1992-1993 under the following circumstances:
In respect of Assessment Year 1992-1993, assessment order was passed on 26.02.1996 on the basis of CIB information informing the Department that the assessee is engaged in large scale purchase and sale of wheat, but it is not filing income tax Signature Not Verified return. Ex-parte proceedings were initiated, which Digitally signed by ASHWANI KUMAR Date: 2015.11.26 resulted in the aforesaid order, as per which net taxable 17:12:02 IST Reason: income of the assessee was assessed at Rs. 18,34,584/-. While 2 framing the assessment, the Assessing Officer also observed that the assessee had contravened the provisions of Section 269SS of the Act and because of this the Assessing Officer was satisfied that penalty proceedings under Section 271E of the Act were to be initiated.
The assessee carried out this order in appeal. The Commissioner of Income Tax (Appeals) allowed the appeal and set aside the assessment order with a direction to frame the assessment de novo after affording adequate opportunity to the assessee.
After remand, the Assessing Officer passed fresh assessment order. In this assessment order, however, no satisfaction regarding initiation of penalty proceedings under Section 271E of the Act was recorded. It so happened that on the basis of the original assessment order dated 26.02.1996, show cause notice was given to the assessee and it resulted in passing the penalty order dated 23.09.1996. Thus, this penalty order was passed before the appeal of the assessee against the original assessment order was heard and allowed thereby setting aside the assessment order itself. It is in this backdrop, a question has arisen as to whether the penalty order, which was passed on the basis of original assessment order and when that assessment order had been set aside, could still survive.3
The Tribunal as well as the High Court has held that it could not be so for the simple reason that when the original assessment order itself was set aside, the satisfaction recorded therein for the purpose of initiation of the penalty proceeding under Section 271E would also not survive. This according to us is the correct proposition of law stated by the High Court in the impugned order.
As pointed out above, insofar as, fresh assessment order is concerned, there was no satisfaction recorded regarding penalty proceeding under Section 271E of the Act, though in that order the Assessing Officer wanted penalty proceeding to be initiated under Section 271(1)(c) of the Act. Thus, insofar as penalty under Section 271E is concerned, it was without any satisfaction and, therefore, no such penalty could be levied. These appeals are, accordingly, dismissed.
......................J. [A.K. SIKRI] ......................J. [ROHINTON FALI NARIMAN] NEW DELHI;
NOVEMBER 20, 2015.
4 ITEM NO.105 COURT NO.13 SECTION IIIA S U P R E M E C O U R T O F I N D I A RECORD OF PROCEEDINGS Civil Appeal No(s). 1457/2008 COMMISSIONER OF INCOME TAX,PANCHKULA Appellant(s) VERSUS M/S JAI LAXMI RICE MILLS AMBALA CITY Respondent(s) WITH C.A. No. 3614/2012
Date : 20/11/2015 This appeal was called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Appellant(s) Mr. K. Radha Krishna, Sr. Adv.
Mr. Arijit Prasad, Adv.
Mr. Gargi Khanna, Adv.
Ms. Anil Katyar, Adv.
Mr. B. V. Balaram Das,Adv.
For Respondent(s) Mr. Harpreet Singh, Adv.
Mr. Rajesh Gupta, Adv.
For M/s. K. J. John & Co.
UPON hearing the counsel the Court made the following O R D E R The civil appeals are dismissed in terms of the signed order. Interlocutory Application(s) pending, if any, shall stand disposed of accordingly.
(Ashwani Thakur) (Rajinder Kaur)
COURT MASTER COURT MASTER
(Signed order is placed on the file)