Itta/177/2003 Of The Commissioner Of Income Tax v. M/S. Gurukrupa Textiles Ltd

HON’BLE SRI JUSTICE L. NARASIMHA REDDYANDHON’BLE SRI JUSTICE CHALLA KODANDA RAM I.T.T.A No.177 OF 2003 JUDGMENT:-(Per Hon’ble Sri Justice L. Narasimha Reddy) This appeal is preferred by the Revenue against the order dated28.03.2001 passed by the Visakhapatnam Bench of the Income Tax AppellateTribunal, Visakhapatnam (for short, ‘the Tribunal’) in I.T.A.No.1591/Hyd/1996. The appeal in turn arose out of the order passed by the Commissioner ofIncome Tax (Appeals), Vijayawada on 03.11.1995. The respondent is a partnership firm and it submitted returns for theassessment year 1988-89. The Assessing Officer added a sum ofRs.1,12,000/- to the income of the respondent. On that very basis, he initiatedproceedings under Section 271(c) of the Income Tax Act, 1961 (for short, ‘theAct’) and imposed a penalty of Rs.61,010/- representing 50% of the addedamount. Aggrieved by that, the respondent filed an appeal before theCommissioner (Appeals). The Commissioner (Appeals) dismissed the appealthrough order dated 03.11.1995. Thereafter, the respondent filedI.T.A.No.1591/H/96 before the Tribunal. The appeal was allowed by theTribunal. Hence, this appeal. Heard Sri J.V. Prasad, learned counsel for the appellant and Smt K.Neeraja, learned counsel for the respondent. The Tribunal recorded a clear finding to the effect that the error that hascrept into the returns was on account of the miscalculation of certain items inthe books of account and it is clearly referable to clerical mistake. It was alsoobserved that there was no element of suppression of the facts or deliberateintention on the part of the respondent to conceal the relevant particulars. Itmust be said to the credit of the Tribunal that it has examined the matter in adispassionate and objective manner and observed that imposition of penaltycannot be a matter of course. The settled principle of law that the AssessingOfficer must justify the initiation of proceedings under Section 271(c) of the Act was reiterated. We do not find any basis to interfere with the order passed bythe Tribunal and at any rate there is no question of law. The Appeal is accordingly dismissed. Miscellaneous Petitions, if any,pending in this appeal shall stand disposed of. There shall be no order as tocosts. _____________________________ L. NARASIMHA REDDY, J ____________________________ CHALLA KODANDA RAM, J Date:16.09.2014Ks/gk HON’BLE SRI JUSTICE L. NARASIMHA REDDYAND HON’BLE SRI JUSTICE CHALLA KODANDA RAM ks/gk I.T.T.A No.177 OF 2003 Date:16.09.2014