Salim Abubakar Kherani v. Assistant Commissioner Of Income Tax Vapi Circle

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL No. 1134 of 2018 ============================================================= SALIM ABUBAKAR KHERANIVersus ASSISTANT COMMISSIONER OF INCOME TAX VAPI CIRCLE ============================================================= Appearance : Mr B S SOPARKAR(6851) for the PETITIONERMr NIKUNT RAVAL for Mrs KALPANAK RAVAL(1046) for the RESPONDENT ============================================================= CORAM: HONOURABLE Mr. JUSTICE AKIL KURESHIandHONOURABLE Mr. JUSTICE B.N. KARIA8[th] October 2018 ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) This Appeal is filed by the assessee to challenge the judgment of the Income Tax Appellate Tribunal, Ahmedabad [“Tribunal” for short] dated 23[rd] January 2018 for AY 2008-2009. The following questions is framed for our consideration : “Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the order of the CIT [A] upholding levy of penalty on clubbing of income, ignoring the fact that all the family members had independent source of income and were separate assessees on record of the Department who had filed returns of income showing the incomes in question?” Considering short facts, we took up the Tax Appeal for final hearing at the admission stage. For such purpose, we adopted the above noted question as the question of law. Having heard learned advocate Shri BS Soparkar for the assessee and Shri Nikunt Raval for the Revenue, who had appeared at the stage of delay condonation, we notice that the Tribunal had confirmed the penalty under Section 271 [1](c) of the Income-tax Act, 1961 against the assessee only on the ground of clubbing of income of the other family members of the assessee. The assessee’s contention all along being that his family members were separately assessed to tax. Such income, therefore, was disclosed by them in their return and they had also paid the matching tax, the Revenue therefore had taxed the same income twice. In the context of taxing the income in the hands of the correct assessee, though we may not accept such a contention of the assessee, in the context of imposition of penalty, the relevant facts would show no attempt on the part of the assessee to evade payment of tax; particularly if the family members had also been assessed separately. Under such circumstances, imposition of penalty is reversed. Question is answered in favour of the assessee. Tax Appeal is disposed of. [Akil Kureshi, J.] Prakash [B.N Karia, J.]