Commissioner Of Income Tax(Central), Gurgaon v. Shri Jai Chand Bansal

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITAa295;2014a295;2014295;2014;20142014 ITAa295;2014a295;2014295;2014;20142014Decided on: 10.02.2015 Commissioner of Income Tax(Central), Gurgaon .. Appellant VERSUS Shri Jai Chand Bansal .... Respondent CORAMHON4BLE MR. JUS TICK RAJTVE BHALLHON4BLE MR. JUSTICE B.S. WALIA PresentMr.Rajesh Sethi, Advocate, for the appellant. KK OK K RAJIVE BHALLA, J. (ORAL) The revenue is before us challenging order dated26.02.2014, passed by the Income Tax Appellate Tribunal(hereinafter referred to as the ‘Tribunal’') Chandigarh Bench ‘A’,Chandigarh, by asserting that the Tribunal has erred in affirming theorder passed by the Commissioner of Income Tax (Appeals)(hereinafter referred to as the ‘CIT(A)', Gurgaon, reducing thepenalty trom 20% to 5%, by raising the following substantialquestion of law: - (1)Whether in law and in the circumstances of thecase, the Hon'ble ITAT has erred by confirming theorder of the CIT(A), restricting the quantum ofpenalty u/s 221(1) to 5% of the unpaid self assessmenttax instead of @ 20% levied by the assessing officer inspite of the provisions of section 249(4) by whichappeal against penalty was not maintainable?” Counsel for the revenue submits that as the assessee didnot appear before the assessing officer, failed to deposit the taxwithin time and the explanation proffered by the assessee is prima-facie false, the CIT(A) is not justified in reducing the penalty from20% to 5%. It is further submitted that as penalty to the extent of100% can be imposed and the assessing officer had already taken alenient view of the mater while imposing penalty of 20%, thereduction of penalty to 5% is not justified. We have heard counsel for the revenue and perused theorders passed by the Tribunal as well as the CIT(A). A perusal of the aforesaid orders reveals that discretionexercised by the CIT(A) to reduce penalty to 5% does not suffer tromany error of jurisdiction much less is it perverse or arbitrary. Arelevant extract from the order passed by the CII(A), reads asfollows: - *.... No doubt there was a delay and in terms of section 140A(3) and the assessee is deemed to be assessee in default. It isalso seen that prior to the levy of penalty, opportunity wasafforded followed by issue of show-cause. No submission norany appearance was stated filed/made. However one cannotomit the fact that the taxes emanating from the search by theeroup had been paid and Settlement Commission was alsoapproached. The self assessment tax of Rs.97.81 lacsalongwith the interest was also paid in part by 31-12-2011,Evidence of the payment by the assessee and the group wasalso furnished. Be that as it may, the levy of penalty was dueto non-payment of self-assessment tax and assessee did notrespond to the show cause notice issued by the A.O. in thisregard. Hence considering the tacts and circumstances of thecase I think it will be in the fitness of things to direct the A.O,to levy penalty @ 5% instead of 20% which is considereda bitharsh.”(3) and the assessee is deemed to be assessee in default. It isalso seen that prior to the levy of penalty, opportunity wasafforded followed by issue of show-cause. No submission norany appearance was stated filed/made. However one cannotomit the fact that the taxes emanating from the search by theeroup had been paid and Settlement Commission was alsoapproached. The self assessment tax of Rs.97.81 lacsalongwith the interest was also paid in part by 31-12-2011,Evidence of the payment by the assessee and the group wasalso furnished. Be that as it may, the levy of penalty was dueto non-payment of self-assessment tax and assessee did notrespond to the show cause notice issued by the A.O. in thisregard. Hence considering the tacts and circumstances of thecase I think it will be in the fitness of things to direct the A.O,to levy penalty @ 5% instead of 20% which is considereda bitharsh.” The CIT(A) has after considering all relevant factsproceeded to exercise bonatide discretion to reduce penalty. Thedecision so recorded is neither perverse nor arbitrary. theaffirmation of this aforesaid order by the Tribunal cannot be said tobe perverse or arbitrary much less does it give rise to any substantialquestion of law. As a consequence, we answer the question of law againstthe revenue and dismiss the appeal. | RAJIVE BHALLA |JUDGE 10.02.2015Shamsher S.Sabharwal 1 B.S. WALIA |JUDGE