The Commissioner Of Income Tax, Faridabad v. Fateh Singh (Huf

ITA No.16 of 2010 & other connected cases IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ***** ITA No.16 of 2010 & other connected cases being ITA Nos.17, 42 & 43 of 2010Date of decision : 15.7.2010 The Commissioner of Income Tax, Faridabad Vs. .....Appellant Fateh Singh (HUF) .....Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Ms. Urvashi Dhugga, Advocate, for the appellant Mr. Avinash Jhingan, Advocate, for the respondent--- -ADARSH KUMAR GOEL (J): 1.This order will dispose of ITA Nos. 16, 17, 42 & 43 of2010, filed by the appellants, as learned counsel for the parties statethat common question of law is involved in all these appeals. Thefacts are being taken from ITA No.16 of 2010. 2.ITA No.16 of 2010 has been preferred under Section 260Aof the Income Tax Act, 1961 (in short "the Act") against the orderdated 11.5.2009 passed by the Income Tax Appellate Tribunal, DelhiBench 'B', New Delhi in ITA No.281/Del of 2008 for the AssessmentYear 1998-99, proposing the following substantial questions of law;(i)Whether on the facts and in the circumstances of the case, the ITAT was right in law in confirming the order of the learned CIT ITA No.16 of 2010 & other connected cases -2- (A) in deleting the penalty of Rs.11,41,889/-levied by theAssessing Officer under Section 271(1)(c) of the Income Tax Act,1961 in view of judgment of Apex Court as the entire controversyon the year of taxability of enhanced compensation and interestthereon has now come to rest with the judgment of the Hon'bleSupreme Court in the case of Commissioner of Income Tax,Faridabad vs. Ghanshyam (HUF) reported in (2009) 315 ITR 1,wherein it has held that the year in which enhanced compensationis received is the year of taxability ?Assessing Officer under Section 271(1)(c) of the Income Tax Act,1961 in view of judgment of Apex Court as the entire controversyon the year of taxability of enhanced compensation and interestthereon has now come to rest with the judgment of the Hon'bleSupreme Court in the case of Commissioner of Income Tax,Faridabad vs. Ghanshyam (HUF) reported in (2009) 315 ITR 1,wherein it has held that the year in which enhanced compensationis received is the year of taxability ? (ii)Whether on the facts and in the circumstances of the case, thelearned ITAT was right in law in confirming the order of thelearned CIT(A) in deleting the penalty of Rs.11,41,889/-levied bythe Assessing Officer under Section 271(1)(c) of the Income TaxAct, 1961 even though the penalty is leviable on contravention ofthe provisions of a civil statute like Income tax Act and it is settledlaw that breach of a civil obligation attracts levy of penalty whetherthe contravention was made by the defaulter with any guiltyintention or not and in contradiction to the judgment of the Hon'bleSupreme Court in the case of Union of India and others Vs.Dharmendra Textiles Processors and others (2008) 306 ITR 277(SC) ?learned ITAT was right in law in confirming the order of thelearned CIT(A) in deleting the penalty of Rs.11,41,889/-levied bythe Assessing Officer under Section 271(1)(c) of the Income TaxAct, 1961 even though the penalty is leviable on contravention ofthe provisions of a civil statute like Income tax Act and it is settledlaw that breach of a civil obligation attracts levy of penalty whetherthe contravention was made by the defaulter with any guiltyintention or not and in contradiction to the judgment of the Hon'bleSupreme Court in the case of Union of India and others Vs.Dharmendra Textiles Processors and others (2008) 306 ITR 277(SC) ? (iii)Whether on the facts and in the circumstances of the case learnedITAt was right in law in confirming the order of the learned CIT(A) in deleting the penalty of Rs.11,41,889 levied by the AssessingOfficer under Section 271(1)(c) of the Income Tax Act, 1961 inrespect of addition made under Section 45 (5) in assessee's incomeITAt was right in law in confirming the order of the learned CIT(A) in deleting the penalty of Rs.11,41,889 levied by the AssessingOfficer under Section 271(1)(c) of the Income Tax Act, 1961 inrespect of addition made under Section 45 (5) in assessee's income ITA No.16 of 2010 & other connected caseswhich had already been confirmed by the learned ITAt ?which had already been confirmed by the learned ITAt ? (iv)Whether on the facts and in the circumstances of the case thelearned IT?AT was right in law in confirming the order of thelearned CIT(A) in the light of Hon'ble Supreme Court's decision inthe case of Commissioner of Income Tax, Faridabad Vs.Ghanshayam (HUF) reported in (2009) 315 ITR 1 which overruledthe decision of Punjab & Haryana High Court on which the learnedITAT had relied upon and the department had restrained itself noton merits of the case but on the basis of the appeal having less taxeffect than the monetary limit allowed for filing on SLP to theHon'ble Supreme Court ?learned IT?AT was right in law in confirming the order of thelearned CIT(A) in the light of Hon'ble Supreme Court's decision inthe case of Commissioner of Income Tax, Faridabad Vs.Ghanshayam (HUF) reported in (2009) 315 ITR 1 which overruledthe decision of Punjab & Haryana High Court on which the learnedITAT had relied upon and the department had restrained itself noton merits of the case but on the basis of the appeal having less taxeffect than the monetary limit allowed for filing on SLP to theHon'ble Supreme Court ? 3.In the course of assessment, the Assessing Officer was ofthe view that the assessee had concealed particulars of income inrespect of enhanced compensation received by the assessee foracquisition of his land under the provisions of Land Acquisition Act,1894. On these basis penalty was levied. On appeal, the penalty wasset aside by the CIT (A), which view was upheld by the Tribunal. Itwas held that interpretation of Section 45(5) of the Act had beendebatable till the decision of the Hon'ble Supreme Court inCommissioner of Income Tax, Faridabad Vs. Ghanshayam (HUF)reported in (2009) 315 ITR 1. Prior to the said judgment, the viewprevailing was that the enhanced compensation was not taxable tillproceedings for determination of compensation were finalised. TheCIT(A) referred to the law laid down by the Hon'ble Supreme Courtin case ofCIT Vs. Hindustan Housing & Land Development TrustLtd.,161 ITR 524 SC and order of this Court dated 17.1.2007 in CIT ITA No.16 of 2010 & other connected cases -4- Patiala Vs. Karanbir Singh, Rajinder Kuti, Patiala, ITR No. 26 of1997 and finally observed as under; ITA No.16 of 2010 & other connected cases -4- Patiala Vs. Karanbir Singh, Rajinder Kuti, Patiala, ITR No. 26 of1997 and finally observed as under; "As the penalty proceedings being quasi criminal aredifferent from the assessment proceedings, even thoughthe additions have been made in the assessmentproceedings, even though the additions have been madein the assessment order, the penal inferences cannot benecessarily drawn from them unless the deliberate act offurnishing of inaccurate particulars of income or theirconcealment is proven on the part of the AO in the factof facts as well as the explanations tendered by theassessee. As the situation stands in this case, again thematter even though decided by the Special Bench of thelearned Tribunal, Delhi, it is still under dispute andtherefore, the disputed matters or additions as such donot attract the provisions of Section 271 (1)(c) of theIncome Tax Act. Therefore, I am of the confirmedopinion that as far as the instant facts as well as law andjudgments in the numerous cited instances quoted by thelearned AR on the identical facts and circumstances hereare concerned, the present case does not invite any penalprovisions of the Income Tax Act under Section 271 (1)(c) and hence, the penalty levied at Rs.11,41,889/-underthat section stands cancelled". 4. We have heard learned counsel for the appellant. 5.Learned counsel for the appellant submits that in view of ITA No.16 of 2010 & other connected cases -5- the judgment of the Hon'ble Supreme Court in Ghanshayam's case(supra) the taxability was clear and the assessee was liable for thepenalty. 6.We are unable to accept the submission. The judgment ofthe Hon'ble Supreme Court in Ghanshayam's case (supra) is dated16.7.2009 while the assessment in question is of the year 1998-99 and the assessment was completed on 14.1.2007. Penalty was levied on22.5.2007. This being the position, the assessee could not have anyintention to suppress the taxable income as held by the CIT(A) aswell as ITAT. 7.No substantial questions of law arises. 8.Accordingly, these appeals are dismissed. 9.A photocopy of this order be placed on each file of the connected case. (ADARSH KUMAR GOEL)JUDGE 15th July, 2010akm (AJAY KUMAR MITTAL)JUDGEJUDGE