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Assistant Commissioner Of Income-Tax vs Abril Pharmaceuticals (P) Ltd. (Abril ... on 27 August, 1998
cites
Commissioner Of Income-Tax vs Prithipal Singh And Co. on 3 November, 1988
11. It is an admitted position that loss of Rs. 10,69,191 has been reduced to 'nil'. In other words, no taxable income was computed. In a case where the declared loss was substantially reduced on assessment, the question of levy of concealment penalty in the context of Explns. 3 & 4 to s. 271(1) came up for consideration before Punjab & Haryana High Court in Prithipal Singh & Co. (supra) wherein Their Lordships held as under :
Indo-Gulf Fertilizers And Chemicals ... vs Union Of India (Uoi) And Anr. on 11 February, 1992
As regards the next loans taken during the year it was submitted that most of them are old creditors and are directors or their relatives, who are income-tax payers and whose identity is established. It was argued that the assessment was made ex parte and, therefore, all these facts could not be appreciated and the additions were made reducing the returned loss to 'nil'. It was argued that since no tax is payable, no penalty is attracted. To support the above proposition, reference was made to the decision in CIT vs. Prithipal Singh & Co. (1990) 183 ITR 69 (P&H), Modi Cement Ltd. vs. Union of India & Ors. (1992) 193 ITR 91 (Del) and Indo-Gulf Fertilizers and Chemicals Corporation Ltd. vs. Union of India & Anr. (1992) 195 ITR 485 (All). It was urged that the levy of penalty is not justified. The submissions of the assessee found favour with the CIT(A). He did not go into the merits of the above two additions. However, he held that the impugned penalty is not legally justified. He observed that there is no positive income on completion of assessment. The provisions of levy of additional tax under s. 143(1A) and levy of penalty under s. 271(1)(c) are at par and various Courts have already held under both the provisions that no additional tax/penalty can be levied unless there was positive income. He further observed that while the statute has been amended for the purpose of levy of additional tax, no such amendment has been brought so far regarding concealment penalty and for this reason the views of the Court with reference to penalty still holds good.
Commissioner Of Income-Tax vs Jaora Oil Mill on 27 October, 1980
5. Placing heavy reliance on Expln. 4(a) to s. 271(1)(c), Shri Brijesh Gupta, the learned Departmental Representative argued that this Explanation applies to loss cases and, therefore, the view of the CIT(A) is not legally tenable. Shri M. Mehta, the learned counsel for the assessee, on the other hand, submitted that the Expln. 4(a) will apply in a situation where loss is converted into positive income and not where the loss is reduced. It was pointed out by the learned counsel for the assessee that Expln. 4(a) was brought to statute book to overcome the difficulty created by the decision of Madhya Pradesh High Court in CIT vs. Jaora Oil Mill (1981) 129 ITR 423 (MP). In that case, the assessee had filed return declaring loss of Rs. 2 lacs. The AO had completed the assessment ex parte on total income of Rs. 50,000. It was held by the Revenue authorities that the income concealed was Rs. 2,50,000. When the matter went before the Tribunal, the Tribunal held that for the purposes of penalty under s. 271(1)(c) the income concealed was the income actually determined i.e. Rs. 50,000 and reduced the penalty to Rs. 50,000 from Rs. 2,50,000. At the instance of the Revenue, the Tribunal granted reference and referred the following question for the opinion of the Hon'ble High Court.
Commissioner Of Income-Tax vs Ganesh Prasad Badriprasad And Co. on 24 April, 1996
The ratio decidendi of the decision in Ganesh Prasad Badri Prasad & Co. (supra) will, therefore, apply mutatis mutandis to Expln. 4 as well which was brought on the statute book w.e.f. 1st April, 1976. What is contemplated in Expln. 4(a) is that where the amount of concealed income exceeds the total income assessed, the tax sought to be evaded would be the tax chargeable on the amount of income concealed. True, even in a case where the assessee has returned loss, the concealment penalty can be imposed on the basis of tax sought to be evaded on the amount of concealed income. But before proceeding to levy concealment penalty by invoking Expln. 4(a), there should be positive finding of concealment of income by the Revenue which in the case before us is lacking. The burden which lay on the AO to record the finding that there was concealment by bringing on record relevant material during penalty proceedings has not been discharged. We, therefore, reject the contention of Shri Brijesh Gupta, the learned Departmental Representative, that Expln. 4(a) is applicable to the facts of the assessee's case.
Commissioner Of Income-Tax vs C.R. Niranjan on 14 June, 1990
In CIT vs. C. R. Niranjan (1991) 187 ITR 280 (Mad); Their Lordships held, thus :
Indian Tube Co. (P) Ltd vs Commissioner Of Income-Tax, Calcutta on 14 January, 1992
13. It may not be out of place to mention that the sole ground on which the decision of the CIT(A) is challenged before us is that the decision of the Tribunal in STI Byplus Tube India Ltd. vs. CIT (supra) has not been accepted by the Department and Department's R.A. arising out of ITA No. 266/Ind/1992 is pending. We are afraid, the decision of the CIT(A) cannot be faulted merely because he has followed the decision of the Indore Bench of the Tribunal, which he had to do for the sake of judicial propriety.
Section 4 in The Income Tax Act, 1961 [Entire Act]
Section 64 in The Income Tax Act, 1961 [Entire Act]
Modi Cement Ltd. And Anr. vs Union Of India And Ors. on 15 May, 1991
As regards the next loans taken during the year it was submitted that most of them are old creditors and are directors or their relatives, who are income-tax payers and whose identity is established. It was argued that the assessment was made ex parte and, therefore, all these facts could not be appreciated and the additions were made reducing the returned loss to 'nil'. It was argued that since no tax is payable, no penalty is attracted. To support the above proposition, reference was made to the decision in CIT vs. Prithipal Singh & Co. (1990) 183 ITR 69 (P&H), Modi Cement Ltd. vs. Union of India & Ors. (1992) 193 ITR 91 (Del) and Indo-Gulf Fertilizers and Chemicals Corporation Ltd. vs. Union of India & Anr. (1992) 195 ITR 485 (All). It was urged that the levy of penalty is not justified. The submissions of the assessee found favour with the CIT(A). He did not go into the merits of the above two additions. However, he held that the impugned penalty is not legally justified. He observed that there is no positive income on completion of assessment. The provisions of levy of additional tax under s. 143(1A) and levy of penalty under s. 271(1)(c) are at par and various Courts have already held under both the provisions that no additional tax/penalty can be levied unless there was positive income. He further observed that while the statute has been amended for the purpose of levy of additional tax, no such amendment has been brought so far regarding concealment penalty and for this reason the views of the Court with reference to penalty still holds good.
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