Ita/79/2014 Of Improvement Trust, Bathinda v. Asstt. Commissioner Of Income Tax, Circle-1 Bathinda

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.79 of 2014 (O&M)Date of decision: (06.08.201 Improvement Irust Dr. Mela Ram Road, Bathinda through ItsChairman, Shri Varinder Kumar Sharma, [AS Vs, .....- Appe The Assistant Commissioner of Income Tax, Circle I, Bathinda ....mesponden CORAM: HON BLE MR. JUSTICK AJAY KUMAR MITTALHON BLE MR. JUSTICE FATEH DEEP SINGH Present: Mr. K.L.Goyal, Sr. Advocate with Mr. Rajiv Sharma, Advocate for the appellant. Mr. G.S.Hooda, Advocate for the revenue, Ajay Kumar Mittal,J, 1.This order shall dispose of ITA Nos.17, 19, 20, 21, 23 and 79 of2014 as according to the learned counsel for the parties, the issue regardingpenalty under Sections 271(1) (c)/271(1)(b)/271-B of the Act 1s involved inthese appeals except in ITA No.23 of 2014 where imposition of interestunder Section 234A of the Act is involved. However, the facts are beingextracted from [TA No.79 of 2014. ? ITA No.79 of 2014 has been preferred by the appellant trustunder section 260A of the Income Tax Act, 1961 (in short, “the Act’)against the order dated 15.10.2013, Annexure A.5 passed by the Income Tax | Appellate Tribunal, Amritsar Bench, Amritsar (in short, "the Tribunal) inITA No.409(ASR)/2013 for the assessment year 2005-06, claimingfollowing substantial questions of law:- "1) Whether on the facts and circumstances of the case, thelearned ITAT was justified in upholding the penalty in amechanical manner? 11) Whether on the facts and circumstances of the case, theImposition of penalty under Section 271(1)(c) 1s justified asthe addition in the 1ncome had been made on account ofattribution of certain expenses to the closing stock, which 1salready in appeal? 111)Whether on the facts and circumstances of the case, theimposition of penalty under Section 271(1)(c) 1s justified asthe appellant Trust is a Government of Punjab Undertakingand question of mens rea is totally ruled out as no personalinterest 1S involved? 1v)Whether the order passed by the learned ITAT 1s violativeof principles of natural justice as proper opportunity ofhearing had not been granted” 3. A few facts relevant for the decision of the controversyinvolved as narrated in ITA No.79 of 2014 may be noticed. The appellant 1sa trust constituted by the Government of Punjab under the Punjab TownImprovement Act, 1922 (in short, "the 1922 Act"). It 1s a semi governmentbody and its income was exempt upto 1.6.2003 under Section 10(20A)when the income tax Act was modified and exemption of the appellant was withdrawn. Instructions 1n this regard were received from the Department ofLocal Government vide letter dated 19.10.2005 to pursue the matter and get the books audited and also apply for registration under Section 12AA of showing loss of|Ly10,13,370/- on 27.1.2006. The return was initially processed under section 143(1) of the Act and later on the case was taken upin scrutiny by issuance of notice under Section 143(2) of the Act. TheAssessing Officer calculated the total income at=a4,15,50,455/- by addingcertain income on valuation of closing stock on account of difference inreceipts and bank reconciliations. The Assessing Officer initiatedproceedings under Section 271(1)(c) of the Act and imposed a penalty to thetune ofzy1,39,85,883/- vide order dated 31.3.2011, Annexure A.1. Feelingagerieved, the appellant filed appeal before the first appellate authoritywhich was dismissed vide order dated 19.3.2013, Annexure A.3. Theappellant filed further appeal before the Tribunal which was also dismissedvide order dated 15.10.2013, Annexure A.5. Hence the instant appeals bythe appellant, 4. We have heard learned counsel for the parties and perused therecord. 4. We have heard learned counsel for the parties and perused therecord. 5. Learned counsel for the appellant submitted that since the issuewhether the appellant trust 1s exempt from payment of income tax under theAct has been remitted to the Tribunal to decide afresh in respect ofassessment years prior to 2009-10, in the interest of justice, issues ofimposition of penalty in ITA Nos.79, 17,19, 20 and 21 of 2014 and interestin ITA No.23 of 2014 be also sent back so as to decide the same afresh bythe Tribunal after the adjudication of the appeals relating to taxability of theincome of the trust. No serious objection was raised by learned counsel forthe revenue to the aforementioned submission. 6. In view of the above, the impugned orders in all the appeals areset aside and the matter 1s remanded to the Tribunal to decide the same with ITA No.79 of 2014 (O&M) law after the issue regarding taxability of income of the appellant 1s decidedby it. Needless to say, anything observed hereinbefore shall not be taken tobe expression of opinion on the merits of the controversy. Sincere effortsshall be made to decide the matter expeditiously. As a result, all the appealsstand disposed of. (Ajay Kumar Mittal)vudge August 06, 2014 (Fateh Deep Singh)Judge =3&9