The Chief Commissioner Of Income-Tax, (Osd), Faridabad v. Adarsh Kumar Goel, J

Income-tax Appeal No. 392 of 2006 *** IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH Income-tax Appeal No. 392 of 2008Date of decision: 25.2.2011 The Chief Commissioner of Income-Tax, (OSD), Faridabad ...Appellant Versus Smt. Bharto Devi ...Respondent CORAM: HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY KUMAR MITTAL Present: Ms. Urvashi Dhugga, Senior Standing Counsel for the appellant. Mr. Ravi Shanker, Advocate for the respondent **** ADARSH KUMAR GOEL, J ( Oral). 1.Since Registry has not been able to send the file onaccount of fire in the Court premises, learned counsel for the revenuehas furnished copy of paper-book which is taken on record. Weproceed to decide the matter after hearing learned counsel for theparties. 2.This appeal has been preferred by the revenue underSection 260A of the Income Tax Act, 1961 against order dated16.9.2005 passed by the Income Tax Appellate Tribunal, DelhiBench 'A',Delhi in ITA No.3873/DEL/2004, for the assessment year1996-97, claiming following substantial questions of law:- “i).Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law indismissing the appeal of the Revenue against theorder of the CIT(A) in deleting the penalty imposedby the Assessing Officer u/s 271(1)(c) of the Actdespite of the fact that the assessee failed to file herreturn of income even in response to notice u/s 148and no details as required by the Assessing Officerwere furnished? ii) Whether on the facts and in the circumstances ofthe case, the Hon'ble ITAT was right in law infollowing the judgment of the Hon'ble Punjab andHaryana High Court in the case of Munish IronStore (2003) 263 ITR 484 even though the facts ofthe present case are entirely different than the caseof M/s Munish Irong Store (supra)? iii) Whether on the facts and in the circumstances ofthe case, the Hon'ble ITAT was correct in notdeciding the issue of levy of penalty u/s 271(1)(c) ofthe Income Tax Act on merits of the case and incancelling the penalty merely on the issue ofrecording of satisfaction?”the case, the Hon'ble ITAT was correct in notdeciding the issue of levy of penalty u/s 271(1)(c) ofthe Income Tax Act on merits of the case and incancelling the penalty merely on the issue ofrecording of satisfaction?” 3. 3.The assessee was sought to be taxed on the capital gainreceived on account of sale of land. The assessee claimedexemption under Section 54B and 54F on the ground that amountreceived by way of capital gain was utilized in purchase of agricultural land and for construction of a new house. The said pleawas not accepted by the Assessing Officer. On appeal, the CIT(A)affirmed the finding of the Assessing Officer that the land purchasedwas not after the date of sale of land and claim under Section 54Fcould not be fully accepted as the investment by the assessee was intwo residential houses and not in one. However, for one residentialhouse claim for exemption under Section 54F was allowed. Onfurther appeal, the Tribunal upheld the claim of the assessee. It washeld that investment by the assessee was only in one residentialhouse and investment in land was after the sale. 4.Learned counsel for the assessee states that no appealhas been filed by the revenue against the order of the Tribunalwhereby plea of the assessee for exemption was upheld. Theassessee having succeeded in quantum proceedings and presentappeal being on the question of penalty, the same was liable todismissed. 4.Learned counsel for the assessee states that no appealhas been filed by the revenue against the order of the Tribunalwhereby plea of the assessee for exemption was upheld. Theassessee having succeeded in quantum proceedings and presentappeal being on the question of penalty, the same was liable todismissed. 5.The Assessing Officer had levied penalty under Section271(1)(c) on the ground that the assessee failed to declare herincome and the plea of the assessee that income was exemptedfrom tax was not correct. The CIT(A) held that the concealment wasnot proved and therefore, set aside the penalty which view wasupheld by the Tribunal. The Tribunal has given additional reason thatin the order of assessment due satisfaction was not recorded forinitiating penalty proceedings. 6.We have heard learned counsel for the parties. 7.Learned counsel for the revenue submits that even if duesatisfaction for initiating penalty proceedings was not specificallyrecorded in the order of assessment, such satisfaction could bediscerned from the said order and thus, levy of penalty was valid.Reliance has been placed on Commissioner of Income Tax VsPearey Laland sons (EP) Ltd. (2009) 308 ITR 438 (P&H). She,however, expressed ignorance about success of the assessee inquantum matter. 8.In view of the statement made by the learned counsel forthe assessee that in quantum proceedings, the issue had becomefinal in favour of the assessee, we are of the view that it is notnecessary to go into the question of penalty. Accordingly, this appealis dismissed. (Adarsh Kumar Goel) Judge February 25, 2011Pka (Ajay Kumar Mittal) Judge