Commissioner Of Income Tax,Faridabad v. Shri Tek Ram, Huf

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.491 of 2007Date of decision: 20.2.2008 Commissioner of Income tax,Faridabad ......Appellant Versus Shri Tek Ram, HUF s/o Shri AshaRam, Vill. Jharsaintly, 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 . The revenue has filed the present appeal under Section 260-Aof the Income Tax Act against the order dated 19-04-2007 passed by theIncome Tax Appellate Tribunal, Delhi Bench 'H' New Delhi in ITANo.327/DEL/2006 for the Asstt. Year 1996-97 raising the followingsubstantial questions of law:- (a)Whether the Hon'ble ITAT was right in law indeleting the penalty levied u/s 271(1)(c) of Income TaxAct, 1961 whereas it had already confirmed the additionmade u/s 45(5) of the Income Tax Act on account ofenhanced compensation received during the previousyear relating to Asstt. Year 1998-99 ? (b) Whether on the facts and circumstances of thecase, the Hon'ble ITAT was right in holding that the viewof assessee regarding non taxability of enhanced compensation was bona fide particularly in view ofprovisions of Section 45(5) of Income Tax Act?” On the basis of information received from HUDA office,Faridabad that the assessee-respondent received additional compensationas well as interest on additional compensation on acquisition on land by theState Government, proceedings were initiated u/s 148 on 21.10.98 in thecase of Sh.Tek Ram, HUFfor the assessment year 1996-97. In response,the assessee filed return declaring an income of Rs.47,310/- on 30.03.99 inthe status of Individual. The assessment was completed u/s 143(3) ofIncome Tax Act in the status of HUF by the then ITO Ward-8, Faridabadvide order dated 31.1.2001 at an income of Rs.47,90,850/-. This order waslater on set aside by Ld.CIT(A) vide consolidated order for the assessmentyears 1996-97, 1997-98 and 1998-99 dated 20.4.2001. Thereafter theassessment was framed again vide assessment order dated 21.1.2003 andit was held that enhanced compensation and interest on the enhancedcompensation is taxable. Vide this order, penalty proceedings underSection 271(1)(c) of the Act were also ordered to be intiated separately.The Income Tax Officer, Ward-1(3), Faridbad vide his order dated28.3.2005 held that he is satisfied that the assessee has concealed theparticulars of his income amounting to Rs.49,04,535/- for assessment year1998-99 and therefore, the assessee is liable to pay penalty under Section271(1)(c) of the Act, equal to 100% of tax sought to be evaded. The appeal filed by the assessee against the order of thepenalty proceedings was accepted by the Commissioner of Income Tax(Appeals), Faridabad vide his order dated 25.11.2005. While allowing the appeal, the Commissioner of Income Tax(Appeals) held that the taxability of the enhanced compensation andinterest thereon is the matter of litigation and the issue has not been finally settled and therefore, there was a bona fide belief on the part of the appellant that this income could not be subjected to tax and under thesecircumstances, no penalty under Section 271(1)(c) could be imposed.The appeal filed by the Revenue before the Tribunal againstthe order of the Commissioner of Income Tax(Appeals) was also dismissedon 19.4.2007. Mr. Yogesh Putney, Advocate, learned counsel for theRevenue-appellant has very fairly conceded that the present appeal iscovered by a judgement (ITA No.579 of 2007 ) of this Court dated 4.2.2008wherein similar question of law on the similar facts were raised by therevenue and the appeal filed by the Department-revenue has beendismissed by this Court and it has been held no question of law arises. settled and therefore, there was a bona fide belief on the part of the appellant that this income could not be subjected to tax and under thesecircumstances, no penalty under Section 271(1)(c) could be imposed.The appeal filed by the Revenue before the Tribunal againstthe order of the Commissioner of Income Tax(Appeals) was also dismissedon 19.4.2007. Mr. Yogesh Putney, Advocate, learned counsel for theRevenue-appellant has very fairly conceded that the present appeal iscovered by a judgement (ITA No.579 of 2007 ) of this Court dated 4.2.2008wherein similar question of law on the similar facts were raised by therevenue and the appeal filed by the Department-revenue has beendismissed by this Court and it has been held no question of law arises. In view of the fair stand taken by the learned counsel for theappellant, we find no ground to interfere in the findings of fact given by theTribunal. Thus, no substantial question of law arises in the present appealand the same is dismissed. (RAKESH KUMAR GARG) JUDGE February 20, 2008ps (SATISH KUMAR MITTAL) JUDGE