Commissioner Of Income Taxpanchkula v. M/S. Chief Electoral Officer, Haryana,Chandigarh

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Appeal No. 191 of 2004Date of decision: 23.11.2010 Commissioner of Income TaxPanchkula --- Appellant Versus M/s. Chief Electoral Officer, Haryana,Chandigarh. --- Respondent --- CORAM:HON’BLE MR. JUSTICE ADARSH KUMAR GOELHON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present:Mr. Yogesh Putney, Senior StandingCounsel for the appellant. Mr. Pankaj Jain, Advocate for the respondent. --- AJAY KUMAR MITTAL, J. This order will dispose of Income-Tax Appeal Nos. 191and 257 of 2004 as both of them arise out of the same order and acommon question of law is involved therein. The facts have beentaken from Income Tax Appeal No. 191 of 2004. This appeal under Section 260A of the Income-Tax Act,1961 (for short “the Act”) has been filed by the Revenue against theorder dated 4.6.2003, passed by the Income Tax Appellate Tribunal (in short “the Tribunal”) in ITA No. 523/CHANDI/99, relating to theassessment year 1994-95. The following substantial question of law has beenclaimed for determination of this Court: “Whether on the facts and in the circumstances of thecase, the learned Income Tax Appellate Tribunal haserred in law in cancelling the order imposing penalty ofRs. 2,67,420/-, u/s 221(1) of the Income Tax Act, 1961,for the assessment year 1994-95, when the ITAT hasreferred the question of law in quantum appeal to theHon’ble Punjab and Haryana High Court, vide order dated31.3.1999, which is still pending?” The facts, in brief, necessary for adjudication, as narratedin the appeal are that penalty proceedings under Section 221 of theAct were initiated against the assessee as it had failed to make thepayment of Rs. 26,74,200/- by the stipulated date. The demand forthe said sum had been created under Section 201 of the Act. Theassessee took a plea that payment could not be made due to paucityof funds and it had made a request to the Government to grantpermission to make payment after some time, but the assessingofficer found that no such sanction had been granted. The assessingofficer, thus, imposed penalty of Rs. 2,67,420/-, i.e. amountequivalent to 10% of total outstanding demand, vide order dated8.10.1997. The Commissioner of Income Tax (Appeals), for short [“CIT(A)”] held that the assessing officer was not justified in imposing the aforesaid penalty and consequently, vide order dated 1.3.1999, allowed the appeal carried by the assessee and cancelled thepenalty. The Tribunal, vide order under appeal, upheld the order ofthe CIT(A) observing that the penalty had been rightly deleted by theCIT(A) because the same was not exigible when the demand itselfhad been quashed by the Tribunal. We have heard learned counsel for the parties and haveperused the record. In view of order of even date passed in ITR No.183 of1999 (Commissioner of Income Tax, Chandigarh Vs. The ChiefElectoral Officer, Haryana, Chandigarh) wherein the order of theTribunal dated 15.5.1998 in quantum appeal has been upheld, wefind no merit in the present appeals. Accordingly, the appeals are dismissed. (AJAY KUMAR MITTAL) JUDGE November 23, 2010*rkmalik* (ADARSH KUMAR GOEL) JUDGE