Ita/571/2009 Of Commissioner Of Income Tax v. Kaija Karina Toor

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income Tax Appeal Nos.571,572, 573,574,575, 576 and 577 of 2009DATE OF DECISION :4[th] February, 2010 The Commissioner of Income Tax, PatialaVs. ...Appellant Mrs.Kaija Karina Toor ...Respondent CORAM:HON’BLE MR.JUSTICE M.M.KUMARHON’BLE MR.JUSTICE JITENDRA CHAUHAN Present :Ms.Urvashi Dhugga, Advocate for the appellant -- 1.To be referred to the reporters or not?2.Whether the judgment should be reported in the Digest? M.M.KUMAR,J. This order shall dispose of seven appeals filed by therevenue against the same assessee-respondent but in respect ofdifferent assessment years namely 1982-83 to 1988-89. All theseappeals filed under Section 260A of Income Tax Act, 1961 (for brevity‘the Act’) are directed against common order dated 13.03.2008 passedin ITA Nos.1034 to 1040/Chandi/2007 pertaining to the assessmentyears 1982-83 to 1988-89 by the Income Tax Appellate Tribunal,Chandigarh (for short ‘the tribunal’). The revenue has claimed thatfrom the order of the tribunal the following question of law would arisefor determination of this Court:- A.“ Whether in the facts and circumstances of the case theTribunal was right in deleting the penalty and in coming tothe conclusion that the assessee was prevented by areasonable cause from payment of Self Assessment taxwhile the return of income?”Tribunal was right in deleting the penalty and in coming tothe conclusion that the assessee was prevented by areasonable cause from payment of Self Assessment taxwhile the return of income?” Income Tax Appeal Nos.571,572, 573,574, 575, 576 and 577 of2009 -2- B.“Whether in the facts and circumstances of the caseassessee’s non-access to the funds in bank could be assessee’s non-access to the funds in bank could be accepted as reasonable cause for non-payment ofself assessment tax under section 140A of the Actignoring the fact that it had not taken any positiveinitiative to seek payment of self assessment taxfrom out of the said funds and more so because thedepartment had no legal authority to enforcerecovery of self assessment tax?”self assessment tax under section 140A of the Actignoring the fact that it had not taken any positiveinitiative to seek payment of self assessment taxfrom out of the said funds and more so because thedepartment had no legal authority to enforcerecovery of self assessment tax?” “ Whether in the facts and circumstances of the case,the Tribunal was right I law in not appreciating thatthe assessee’s action of objection to the Revenue’smove seeking modification in the injunction ofHon’ble High Court’s orders proved that the assesseenever intended to pay self assessment tax?”the Tribunal was right I law in not appreciating thatthe assessee’s action of objection to the Revenue’smove seeking modification in the injunction ofHon’ble High Court’s orders proved that the assesseenever intended to pay self assessment tax?” It is pertinent to mention that the predecessor in interestof the assessee-respondent had failed to file return and on his death inaccident the assessee-respondent had filed the return. Thus thequestion raised by the revenue before the CIT(A) was concerningimposition of penalty under Section 140A (3) of the Act. The CIT(A)recorded a finding of fact that the assessment has been completed bythe assessing officer in respect of the legal heir of the deceased, whowas a widow of more than 65 years of age and resided abroad inCanada with her children. The assessee’s accounts were underattachment by the Court as also by the tax authorities later. Anotherfinding of fact recorded is that amount under attachment in the bankwith date of filing of the return was much more than the amount of taxassessed. It was later on appropriated by the department pursuance to Income Tax Appeal Nos.571,572, 573,574, 575, 576 and 577 of2009-3- Income Tax Appeal Nos.571,572, 573,574, 575, 576 and 577 of2009-3- the directions issued by the High Court when order of attachment wasvacated and in fact a demand was raised by the department pursuanceto order under Section 143(3) of the Act. On the basis of the findingsof fact, the CIT(A) expressed the opinion that the year wise selfassessment tax was already recovered by the department and thecontention of the assessee was duly manifested while filing return ofincome with request to adjust tax as assessed out of attached bankaccount, therefore, it was concluded by the CIT(A) that the delay inrecovery of self assessment tax cannot be imputed to assessee-legalheir. There was reasonable hardship and reasonable cause for notpaying the self assessment tax at the time of filing of return.Accordingly, the penalties under Section 140A (3) of the Act weredirected to be deleted by the CIT (A). The revenue approached the Tribunal and after hearingcounsel for the parties, the Tribunal observed that the penal actioncontemplated by section 140A (3) of the Act comes into operationwhen the assessee commits and default in making payment of tax interms of section 140A (1) of the Act. The Tribunal has concluded thatthe question of non payment of tax on time stems from a reasonablecause or not, is necessari a question of fact. The Tribunal proceededto examine the question whether the finding of fact recorded by CIT(A) was based on material or not or whether such finding could beregarded as perverse. The answer given by the Tribunal to theaforesaid issue reads thus: “The conclusion of the CIT (Appeals) is that at the timewhen the returns of income were filed by the assessee, thebank accounts of the assessee were lying attached as per -4- order of the Court. Secondly, CIT(Appeals) also comes to afinding that on the date of filing of the return, such bankaccount contained monies which was sufficient to pay thetax demand in question. Thirdly, the CIT (Appeals) hascome to a finding that it is only subsequently after theHon’ble High Court was approached for vacation of theattachment that the Revenue has collected the due taxes.We find that the aforesaid factual position has beenpleaded by the assessee not only before the CIT (Appeals)but also before the Assessing Officer as is evident from theperusal of the order of the Assessing Officer dated2.5.1994 imposing penalty under Section 140A (3) of theAct. We, therefore at the outset do not find anyinfirmity in the conclusion drawn by the CIT(Appeals) as it is based on material before him.Nothing to the contrary has been brought on recordby the Revenue on the basis of any cogent material,which could enable us to take a different view of thefact situation. There is no material or evidence onrecord to substantiate the challenge of the Revenueto the conclusions drawn by the CIT (Appeals).” The only contention raised before the Tribunal was that theassessee had the opportunity to operate bank account before the orderof attachment, therefore, and the attachment of bank account on thedate of filing of return of income would not constitute a reasonablecause which prevented the payment of taxes. However, the tribunalrejected the aforesaid submission of the revenue by observing that -5- provisions of section 140A (1) of the Act are attracted only when theassessee furnishes a return of income and section 140A (3) is tooperate from the date when the return of income is furnished if such areturn is not accompanied by payment of admitted taxes. Accordingly,the financial position at the time of filing of return alone is relevant.Accordingly, the plea raised by the revenue was rejected. -5- provisions of section 140A (1) of the Act are attracted only when theassessee furnishes a return of income and section 140A (3) is tooperate from the date when the return of income is furnished if such areturn is not accompanied by payment of admitted taxes. Accordingly,the financial position at the time of filing of return alone is relevant.Accordingly, the plea raised by the revenue was rejected. We have confronted the learned counsel for the revenuewith the various findings of facts and asked her if there is any materialeven at this stage to show that the findings recorded by CIT (A) asalso by the tribunal may be regarded as perverse. Learned counsel forthe revenue has not been able to show any such material nor there isany reference in any of the grounds of appeal which may lead us toconclude that the findings recorded by the authorities and the Tribunalare without any evidence. The High Court under Section 260A of theAct would not undertake exercise to appreciate and re-appreciateevidence to reach a conclusion other then the one reached by the CIT(A) and the Tribunal merely because such a view could also be apossible view. The only scope of interference under Section 260A ofthe do something is the presence of a substantive question of law. It istrue that bald finding based on no evidence could be interfered but notthe one which are supported by the evidence. Therefore no question oflaw much less a substantive question of law for determination of thisCourt warranting admission of the appeals. Accordingly, these appealfail, which are consequently dismissed. Income Tax Appeal Nos.571,572, 573,574, 575, 576 and 577 of 2009 -6- A photo copy of this order be placed on the files of connected cases. (M.M.KUMAR) JUDGE February 04, 2010p.singh (JITENDRA CHAUHAN) JUDGE 1. Income Tax Appeal No.571 of 2009 2. Income Tax Appeal No.572 of 2009 3. Income Tax Appeal No.573 of 20094. Income Tax Appeal No.574 of 2009 5. Income Tax Appeal No.575 of 2009 6. Income Tax Appeal No.576 of 2009 7. Income Tax Appeal No.577 of 2009