Commissioner Of Income Tax-Ii v. The Punjab State Coop. Supplies & Marketing Federation Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.281 of 2010 Date of decision: 2.8.2010 Commissioner of Income Tax-II -----Appellant. Vs. The Punjab State Coop. Supplies & Marketing Federation Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Ms. Urvashi Dhugga, Standing counselfor the Revenue.for the Revenue. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the Revenue underSection 260-A of the Income Tax Act, 1961 (for short, “the Act”)against the order of Income Tax Appellate Tribunal, Chandigarhdated 17.9.2009 in I.T.A. No.685/Chandi/2009 proposing to raisefollowing substantial questions of law:- “Whether on the facts and circumstances of the caseand in law, the order of the ITAT in deleting thepenalty imposed u/s 271(1)(c) is correct whereas theassessee has failed to show the income on a/c ofinterest from income tax refund, in its profit & lossaccount.” 2. The Assessee is a public sector undertakingregistered under the provisions of the Punjab CooperativeSocieties Act, 1961. It received income by way of interest onincome tax refunds which was not credited to the ‘profit and lossaccount’ and instead was credited to the provisions for incometax. During assessment, addition was made to the income on thataccount and penalty was also imposed. On appeal, the CIT(A)set aside the penalty holding that the assessee had disclosed allthe details in the balance sheet itself and thus, there wasbonafide mistake, on account of which, penalty was not liable tobe imposed. The relevant observations are as under:- “I have carefully considered the rival submissions. Ifind that the assessee disclosed these facts in thebalance sheet. In fact, the Assessing Officer took thefigures from the balance sheet itself. It is aGovernment undertaking. There is no personalinterest involved. I am in agreement with thecontention of the assessee that it was a bonafidemistake and the same could not be taken whilearriving at the income. There is no contumaciousconduct on the part of the assessee, which is evidentfrom the fact that the assessee did not receive therefund. This was in fact adjusted against the arrears.It is a settled law that any addition made does notautomatically attract penalty. On these facts, I am ofthe opinion that no penalty is imposable.” The above observations were approved by the Tribunal. 3. We have heard learned counsel for the appellant. 4. In view of finding of fact concurrently recorded by theCIT(A) as well as the Tribunal that mistake of the assessee was abonafide one and there was no concealment, levy of penalty wasnot permissible. 5. No substantial question of law arises. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 02, 2010MITTAL )ashwani ( AJAY KUMAR JUDGE