Ita/917/2006 Of The Commissioner Of Income Tax v. M/S.rema Constructions

IN THE HIGH COURT OF KARNATAKA, BANGALOREDATEKD THIS THE 1[‘T]DAY OF JULY 2012 PRESENT HON' BLE MR. JUSTICE K.SREEKBEDHAR AND HON' BLE MR. JUSTICEK B. MANOH INCOME TAX APPBAL NO.917 OF 2006 BBRITWRE 1.The Commissioner of Income taxCentral Circle,C.R. Building,Queens Road,Bangalore, ? The Income tax Officer,Ward — 8&(4C.R. Building,Queens Road,Bangalore,Appellants ( By Shri.M.Thirumalesh, Adv.) AND ° M/s. Rema Constructions,No.99, Millers Road,Benson Town,Bangalore — 560 046 @Respondent (By Shri.S.Parthasarathi. Adv.) This ITA is filed under Section. 2600-A of I.T. Act1961 arising out of order dated 06.01.2006 passed inI.T.A. No.2225/BANG/2004 for the Assessment years2001-02, praying that this Hon’ble Court may bepleased to: 7(9formulate the substantial questions of lawstated therein,stated therein, 7((9allow the appeal and set aside the orderpassed by the ITAT, Bangalore in ITA No.2225 /BANG/2004,dated 06.01.2006Econfirmthe|order.passedby.$%Commissioner of Income Tax-IV, Bangalore,in the interest of justice and equity.passed by the ITAT, Bangalore in ITA No.2225 /BANG/2004,dated 06.01.2006Econfirmthe|order.passedby.$%Commissioner of Income Tax-IV, Bangalore,in the interest of justice and equity. This appeal coming on for Final Hearing this dayK.SREEDHAR RAO, J., delivered the following: JUDGMENT The assessee in the return sought exemption ofthe commission paid to an extent of Rs.3,35,0605/-towards travelling expenses Rs.2,09,200/- and towardslabour charges Rs.958,300/- as revenue expenditure 2. The Assessing Authority disallowed the claim. TheCIT.(Administration)exercising+%<()(&*/1jurisdiction found that mere disallowance of the saiditems by the Assessing Officer was not proper. TheAssessingOfficer|should.have|initiated:%*/1.;proceedings under Section — 2/1(1)(c) for deliberately furnishing inaccurate particulars and thus directed theAssessing Authority to initiate penalty proceedings. 3. Aggrieved by the said order, the assessee filedan appeal before the Tribunal. The Tribunal allowed theappeal holding that the CIT (Administration) had nojurisdiction to direct initiation of penalty proceedings.The following question of law was framed by this Courtfor consideration: “1) Whether the Appellate Tribunal is right in|holding that Commissioner of Income taxhas no jurisdiction in exercise of his powerunder Section — 263 of the Act for thepurpose of remanding the matter to theAssessing Officer imposing penalty undersec. 271(1)(c) of the IT Act.” 4. The provisions of Section - 271 of the Income tax Act reads as follows: “2/1 (1) If the [Assessing] Officer or the/Commuissioner](Appeals)/[OrtheCommiussioner]in|the|COUTSEof|arlproceedings under this Act, is satisfied thatAny Persort (a)[***) (b}has [***/ failed to comply with a noticefunder sub-section (2) of section 115WD orunder sub-section (2) of Section 11SWE or]under sub-section (1) of Section 142 orsub-section (2) of Section 143 for fails tocomply with a direction issued under sub-section (2A) of section [42] orfunder sub-section (2) of section 115WD orunder sub-section (2) of Section 11SWE or]under sub-section (1) of Section 142 orsub-section (2) of Section 143 for fails tocomply with a direction issued under sub-section (2A) of section [42] or (c}has concealed the particulars of hisincome or furnished inaccurate particularsof [Such income, or|income or furnished inaccurate particularsof [Such income, or| 739has concealed the particulars of the fringebenefits:OTfurnishedinaccurateparticulars of such fringe benefits,|Jbenefits:OTfurnishedinaccurateparticulars of such fringe benefits,|J (c}has concealed the particulars of hisincome or furnished inaccurate particularsof [Such income, or|income or furnished inaccurate particularsof [Such income, or| 739has concealed the particulars of the fringebenefits:OTfurnishedinaccurateparticulars of such fringe benefits,|Jbenefits:OTfurnishedinaccurateparticulars of such fringe benefits,|J 5. The words ot “the Commissioner’ to mean “theCommissioner(Administration)”WaSinstituted C;amendment w.e.f. 01.06.2002. The assessment year inthe present appeal pertains to 2001-2002. In theabsence of the amended provisions, the Commissioner(Administration) had no jurisdiction. It was only theAssessing Officer or the Commissioner (Appeals) couldhave exercised the jurisdiction for initiating penaltyproceedings. 6. The Commissioner (Appeals) could havedirected initiation of penalty proceedings and he couldhave also suo-moto exercised the penalty proceedings.But for the Commissioner (Administration), it is onlyalter the amendment that jurisdiction is vested. 7. In that view of the matter, the order of theTribunal is sound and proper. The question of lawframed by this Court is answered against the Revenue. Appeal dismissed. sd/-JUDGE od/-JUDGE