Punjab-Haryana High Court
Commissioner Of Income-Tax vs Leader Valves (P.) Ltd. on 13 March, 1996
Equivalent citations: [1996]220ITR591(P&H)
JUDGMENT G.S. Singhvi, J.
1. This is a petition under Section 256(2) of the Income-tax Act, 1961, filed by the Commissioner of Income-tax, Ludhiana, for directing the Income-tax Appellate Tribunal to refer the following question of law :
" Whether, on the facts and in the circumstances of the case (even after having observed in para 2 that the assessee's stay application stood rejected on May 15, 1989), the Income-tax Appellate Tribunal was right in law in holding that the deletion of penalty under Section 221(1) by the Commissioner of Income-tax (Appeals) was justified when the assessee was clearly in default on the date the penalty was levied by the Assessing Officer ?"
2. The assessee is engaged in the business of manufacture and sale of valves and cocks. For the assessment year 1986-87, the assessee filed its return declaring its income as Rs. 10,35,980. The assessment was completed, vide order dated March 30, 1989, and the demand notice was served on the assessee under Section 156. The demand was payable on or before May 5, 1989. On May 1, 1989, the assessee filed an application for stay of demand. The Assessing Officer passed an order dated May 15, 1989, by which he held that the application filed by the assessee cannot be accepted but at the same time, the Assessing Officer observed that the assessee may approach the Deputy Commissioner of Income-tax (Central), Amritsar, or the Commissioner of Income-tax (Central), Ludhiana. The assessee sent an application to the Deputy Commissioner of Income-tax, Amritsar, but no order was passed by him and the Assessing Officer proceeded to impose penalty amounting to Rs. 3,32,400 on the ground of failure of the assessee to deposit the amount of tax. Against the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) who allowed the same, vide order (annexure P-4) dated August 31, 1989. Aggrieved by the order of the appellate authority, the Revenue filed an appeal before the Income-tax Appellate Tribunal, which was dismissed, vide order (annexure P-5) dated October 6, 1994. The petition filed by the Revenue under Section 256(1) of the Income-tax Act, 1961, has been dismissed by the Tribunal.
3. The only argument advanced by Shri Sawhney is that when the Assessing Officer did not grant stay of recovery of the tax, it was the bounden duty of the assessee to pay the tax and as the assessee did not pay the tax, he has to suffer penalty under Section 221 of the Act and the appellate authority as well as the Tribunal have seriously erred in setting aside the penalty. While rejecting the petition filed by the Revenue under Section 256, the Tribunal has considered the entire matter and held that no question of law arises for reference to the High Court. The Tribunal took the view that when the assessee had filed stay application before the appellate (?) authority and the same was not decided, he could not be held liable to pay penalty.
4. In our opinion, the view taken by the Tribunal for deleting the penalty imposed by the Assessing Officer does not suffer from any infirmity and no question of law arises for consideration by this court. Hence, the application is dismissed.