Commissioner Of Income Tax,Kolkata-Iv, Kolkata v. Smifs Capital Markets Ltd

O-107 ITA/65/2012 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (Income Tax)ORIGINAL SIDE COMMISSIONER OF INCOME TAX,KOLKATA-IV, KOLKATA -Versus- SMIFS CAPITAL MARKETS LTD. BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 20[th] February, 2023 Appearance :Mr. Tilak Mittra, Adv.…for the respondent.. The Court : This appeal filed by the revenue underSection 260A of the Income Tax Act, 1961 (the ‘Act’ forbrevity) is directed against the order dated 25[th] November,2011 passed by the Income Tax Appellate Tribunal, “C” Bench,Kolkata (the Tribunal) in ITA No.1554/Kol/2010 for theassessment year 2003-04. The appeal was admitted on 18[th] June, 2012 on thefollowing substantial question of law: “Whether on the facts and in the circumstances of thecase the Learned Tribunal has erred in law inupholding the order of the CIT (appeals) deleting the penalty levied by the Assessing Officer under Section271(1)(c) of the I.T. Act, 1961 for the reason of notvoluntary mentioning by the assessee in its originalreturn the profits of Rs.4,21,33,856/- as Short TermCapital Gain by selling the “building” in question andfor not offering the said income to tax till the samewas detected and notice was issued under Section 148of the I.T.Act, 1961 ?” We have heard Mr. Soumen Bhattacharyya, learnedstanding counsel appearing for the appellant/revenue. The issue involved in the instant case is whether thelearned Tribunal was right in affirming the order passed by theCommissioner of Income Tax (Appeals), Central-I, Kolkata dated11[th] May, 2010 deleting the penalty imposed by the AssessingOfficer under Section 271(1)(c) of the Act. On perusal of the order passed by the CIT(A), we findthat the only controversy was with regard to the omission ofaddition of deemed capital gain of sale of fixed asset incomputation of total income under the heading ‘capital gain’after deducting the same the head ‘business income.’ TheCIT(A) noted that the revenue does not dispute the fact thatall relevant facts material to computation of total income wereduly furnished by the assessee and no deficiency in furnishingof the facts had been pointed out by the Assessing Officer.Therefore, it was held that the deeming provision under Section271(1)(c) would not stand attracted. With this reasoning the penalty was deleted. The revenue carried the matter on appealbefore the Tribunal. The Tribunal re-examined the factualposition and, in our view, rightly took note of the decision ofthe Hon’ble Supreme Court in CIT vs. Reliance Petrochemicals(P) Ltd. reported in (2010) 322 ITR 158 (SC) and held that therevenue has not been able to bring the case of the assesseeunder any one of the three contingencies which would beavailable for the purpose of levying the penalty under Section271(1)(c) of the Act.Thus, in the absence of any error in the order of theTribunal or in the decision making process, we find no groundto interfere with the order passed by the Tribunal.Accordingly, the appeal filed by the revenue(ITA/65/2012) is dismissed and the substantial question of lawis answered against the revenue. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) S.Das/As.