M/S Metalways (P) Ltd v. The Commissioner Of Income Tax, Patiala

I.T.R. No.10 of 1997 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH I. T. R NO. 10 OF 1997DECIDED ON: 07.09.2009 M/s Metalways (P) Ltd. ...Applicant Versus The Commissioner of Income Tax, Patiala ...Respondent CORAM : HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:Mr. S. K. Mukhi, Advocate,for the applicant-assessee. Ms. Urvashi Dhugga, Advocate,for the respondent-revenue. ADARSH KUMAR GOEL, J. (ORAL) 1.The following question has been referred for the opinionof this Court by the Income Tax Appellate Tribunal, ChandigarhBench under Section 256(2) of the Income Tax Act, 1961 (in short'the Act') arising out of its order dated 17.09.1979 in I.T.A.No.535/Chandi/83 relating to assessment year 1978-79 in:- “Whether the tax paid within the stipulated period without filing an estimate and treated as advance is deductible while imposing penalty?” 2.The assessee did not file estimate of advance tax by theyear ending 31.03.1978 in terms of Section 212 (3) of the Act. I.T.R. No.10 of 1997 -2- However, the advance tax was deposited. Penalty proceedings wereinitiated for non-compliance of provisions of Section 212 (3) for notfiling the estimate. After consideration, penalty was imposed. 3.The CIT (Appeals) set aside the penalty proceedings onlyon the ground that Section 209-A which laid down requirement offiling of estimate came into force w.e.f. 01.04.1979. This view wasreversed by the Tribunal with the observation that same requirementexisted under Section 212 (3) of the Act and initiation of penaltyproceedings was justified. Thereafter, at the instance of theassessee, the above question has been referred for opinion of thisCourt. 4.We have heard learned counsel for the parties. 5.Learned counsel for the Revenue raises objection that thequestion does not arise from the order of the Tribunal. 6.Learned counsel for the assessee submits that thequestion having been raised before the CIT (Appeals) as noted para3 of the order cannot be said to be not arising before the Tribunal.The Tribunal while reversing the order of the Tribunal had to dealwith the said question. We are unable to accept the objection oflearned counsel for the revenue as the reference itself has beenmade under orders of Hon'ble Supreme Court mentioned in para 1 ofstatement of case. 7.Learned counsel for the assessee relies on judgment ofHon'ble Supreme Court in “Commissioner of Income Tax Vs.Kohinoor Flour Mills (P) Ltd.”(1991) 187 ITR 585 to submit thatthe assessee was entitled to deduct the payment of tax made fordetermination of basis for penalty. No contrary view has been I.T.R. No.10 of 1997 -3- shown. Accordingly, question has to be referred in favour of theassessee and against the revenue. 8.It is, however, made clear that no reference having beensought or made on question of justification or otherwise for levy ofpenalty, we do not express any view on the said view. 9.The reference is disposed of. (ADARSH KUMAR GOEL) JUDGE September 07, 2009Shalini/Gaurav (DAYA CHAUDHARY) JUDGE