Commissioner Of Income Tax,Faridabad v. Shri Munim

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.611 of 2007Date of decision: 11.2.2008 Commissioner of Income tax,Faridabad ......Appellant Versus Shri Munim, s/o Sh. Devi Ram,Vill. Jharsaitly, Ballabgarh,Faridabad ......Respondent CORAM:-HON'BLE MR.JUSTICE SATISH KUMAR MITTALHON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present:Mr. Yogesh Putney, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . 1.The present appeal has been filed by the revenue against theorder dated 18.4.2007 passed by the Income Tax Appellate Tribunal, DelhiBench 'G' Delhi in ITA No.02(Del)2006 in the case of respondent-assesseefor the assessment year 1995-96 raising the following substantialquestions of law:-. “ 1. Whether on the facts and in the circumstances of thecase, the Hon'ble ITAT was right in law in confirming theorder of the Ld. CIT(A) who deleted the penalties leviedby Assessing Officer u/s 271(1)(c ) in contravention ofthe order of the Hon'ble Madras High Court in the caseofM. Sajjanraj Nahar vs. CIT(283 ITR 230), is correctwhen the Assessing Officer had recorded initiation ofpenalty proceedings u/s 271(1)(c) in the assessmentorder ? 2. That the Hon'ble ITAT erred in deciding that provingcontumacious intent is an essential ingredient in levy of penalty in contravenetion of the provisions of a CivilStatute like Income Tax Act in spite of there being somany judgements that breach of a Civil obligationattracts levy of penalty whether the contravention wasmade by the defaulter with any guilty intention or not?3. That the order of the Hon'ble ITAT is in contraventionof the many judicial pronouncements includingThirupathy Kumar Khemka vs. Commissioner ofIncome Tax 210 CTR 287 (Mad)?” Brief facts giving rise to this appeal are as under:- (i)The respondent-assessee is an agriculturist whoseagricultural land was acquired by the Haryana Urban DevelopmentAuthority (HUDA) and the assessee was awarded compensation inlieu of that by the Land Acquisition Officer. Not satisfied with the rateof compensation, the assessee filed the reference application underSection 18 of the Land Acquisition Act before the Additional DistrictJudge, Faridbad who enhanced the compensation and also orderedHUDA to pay interest on enhanced compensation. (ii)The respondent-assessee received a total amount ofRs.48,49,323/- which includes interest on enhanced compensationat Rs.20,02,276/- for the period relevant to the assessment years1994-95 to 1996-97. The assessee received interest for theassessment year 1995-96 which worked out to Rs.3,33,710/- but noreturn of income was filed, therefore, proceedings under Sections147/148 were initiated of the Income Tax Act. (iii)In response to notice under Section 148, the assesseedid not file his return of income. The interest income ofRs.3,33,710/- on the enhanced compensation for the year underconsideration was not declared by the assessee which worked out to Rs.3,33,710/-. Therefore, the interest income of Rs.3,33,710/- wasassessed to tax as assessee's income from interest on enhancedcompensation and penalty proceedings u/s 271(1(c ) of the Act wereinitiated. The assessee went in appeal before the CIT(A) against theorder of the Assessing Officer, who in turn, cancelled theassessment made by the Assessing Officer and directed him tomake the assessment afresh. Aggrieved against this order of the CIT(A), the Department preferred an appeal before the Tribunal. TheTribunal upheld the findings of the Assessing Officer and confirmedthe addition of Rs.3,33,710/- on account of interest on enhancedcompensation. Rs.3,33,710/-. Therefore, the interest income of Rs.3,33,710/- wasassessed to tax as assessee's income from interest on enhancedcompensation and penalty proceedings u/s 271(1(c ) of the Act wereinitiated. The assessee went in appeal before the CIT(A) against theorder of the Assessing Officer, who in turn, cancelled theassessment made by the Assessing Officer and directed him tomake the assessment afresh. Aggrieved against this order of the CIT(A), the Department preferred an appeal before the Tribunal. TheTribunal upheld the findings of the Assessing Officer and confirmedthe addition of Rs.3,33,710/- on account of interest on enhancedcompensation. 3.Since the ITAT had upheld the findings of the AssessingOfficer and had confirmed addition of Rs.3,33,701/- on account of intereston enhanced compensation, a show cause notice dated 13.1.2005 wasissued to the asseessee fixing the penalty proceedings for hearing on10.2.2005. None appeared on behalf of the respondent-assessee on thefixed date. The Income Tax Officer, Ward-I(3), Faridabad vide his orderdated 28.2.2005 held that he is satisfied that the assessee has notfurnished the particulars of his income and thereby has concealed hisincome. Accordingly, penalty under Section 271(1)(c ) was imposed asunder:- “Tax on returned incomeRs.Nil Tax on income sought to be evadedRs.1,08,484/-Minimum Penalty u/s 271(1)(c )@100%Rs.1,08,484/-I hereby impose a minimum penalty of Rs.10,84,484/- equal to100% of the tax sought to be evaded.” 4.The appeal filed by the assessee against the order of penaltyimposed by the ITO, Ward-1(3), Faridabad, was accepted by theCommissioner of Income Tax (Appeals), Faridabad vide his order dated 17.10.2005. The revenue filed an appeal before the Income Tax AppellateTribunal (Delhi Bench “G” New Delhi) against the order of theCommissioner of Income Tax (Appeals) dated 17.10.2005 whereby hecancelled the penalty imposed by the Assessing Officer under Section 271(1)(c ) of the Act. The said appeal of the revenue was dismissed by theTribunal. 5.Mr. Yogesh Putney, counsel for the revenue, has very fairlystated that Income Tax Appeal Nos.582 and 586 of 2007 involving similarquestions of law and facts have already been dismissed by this Court videjudgement dated 5.2.2008 and 7.2.2008 respectively. 6.In view of the above, we are of the view that the order of theTribunal does not suffer from any illegality and no substantial question oflaw arises in the present appeal and the same is dismissed in limine. (RAKESH KUMAR GARG) JUDGE February 11, 2008ps (SATISH KUMAR MITTAL) JUDGE