Commissioner Of Income-Tax, Jalandhar v. Sh. Rajesh Rana

Income-tax Appeal No. 133 of 2008 *** IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Income-tax Appeal No. 133of 2008 Date of decision: 14.10.2010 Commissioner of Income-tax, Jalandhar ...Appellant Versus Sh. Rajesh Rana ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Mr.Vivek Sethi, Advocate for the appellant. Mr.Pankaj Jain, Advocate for the respondent. **** ADARSH KUMAR GOEL, J ( Oral). 1.On 7.7.2009, the following order was passed:- “1.This appeal has been preferred by theRevenue under Section260A of Income-tax Act, 1961 (forshort, “the Act”) against the order of Income TaxAppellate Tribunal, Amritsar Bench, Amritsar, dated3.8.2007 passed in ITA No.381 (ASR)/2006-AssessmentYear 1994-95, proposing to raise following substantialquestions of law: 1. “ Whether on the facts and in thecircumstances of the case, the ITAT was rightin law in upholding the order of the CIT(A)deleting the penalty of Rs.1,14,770/- imposedunder Section 271(1)(c) of the Income-tax Act, 1961.?” *** 2. “ Whether on the facts and in thecircumstances of the case, the ratio ofjudgment of the Hon'ble Punjab and HaryanaHigh Court in the case if CIT v. M/s MunishIron Store reported at 263 ITR 483 isapplicable in the present case when thefinding regarding furnishing of inaccurateparticulars of income have been given in theassessment order in a detailed manner?” 2.During assessment for the assessment yearin question, the Assessing Officer on the basis of surveyunder Section 133-A found that the assessee hadstocks in excess of stock entered in the books ofaccounts. The assessee surrendered some of theamounts as additional income to cover up thediscrepancies. However, the Assessing Officer madeadditions to the declared amount. Notice for imposition ofpenalty was also issued and order of penalty wasseparately passed. 3.The quantum matter is subject matter of ITANo. 344 of 2005 at the instance of the assessee. 4.On appeal, CIT(A) set aside the penalty onlyon the ground that from the proceedings recorded by theA.O., the requirement of Section 271(1)( c) of the Actwas not met as it was not recorded that a case of penalty *** was made out while mentioning that notice for penaltyproceedings had been separately issued. 5.Learned counsel for the Revenue points outthat this issue was considered by this Court inCommissioner of Income -tax vs. Pearey Lal and Sons (EP) Ltd. [2009] 308 ITR 438 (P&H) and it was held thatorder of this nature could not be set aside on the groundthat requirement of Section 271(1)(c) of the Act was notmade. Existence or otherwise of satisfaction was not amatter of form but of substance. 6.Learned counsel for the Assessee submittedthat even if the requirement of Section 271(1)(c) was met,the assessee was entitled to be heard on merits ofjustification for levy of penalty. The CIT (A) has set asidethe penalty, without going into the merits of the issue. 7.In view of the above, though the matter mayhave been liable to be remitted to the CIT(A) for decidingthe issue afresh after considering the view point of theassessee on merits, but since it is pointed out thatquantum case is pending in this Court, we consider itappropriate to direct that this appeal be listed along withITA No. 344 of 2005.” 3.We have heard learned counsel for the parties. 4.By a separate order passed today, ITA No.344 of 2005(Sh. B.S.Rana Vs. Commissioner of Income-Tax, Jalandhar) has *** been dismissed. In view of earlier order, this appeal is allowed andorders of the CIT (A) as well as the Tribunal are set aside. Thematter is remanded to the CIT(A) for fresh decision in accordancewith law. The assessee may appear before the CIT(A) on20.12.2010. (Adarsh Kumar Goel) Judge 3.We have heard learned counsel for the parties. 4.By a separate order passed today, ITA No.344 of 2005(Sh. B.S.Rana Vs. Commissioner of Income-Tax, Jalandhar) has *** been dismissed. In view of earlier order, this appeal is allowed andorders of the CIT (A) as well as the Tribunal are set aside. Thematter is remanded to the CIT(A) for fresh decision in accordancewith law. The assessee may appear before the CIT(A) on20.12.2010. (Adarsh Kumar Goel) Judge October 14,2010Pka (Ajay Kumar Mittal) Judge