The Commissioner Of Income Tax, Faridabad v. M/S Nuware India Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 973 of 2008 (O&M)Date of decision: 31.7.2009 The Commissioner of Income Tax, Faridabad Vs. M/s Nuware India Ltd.,20/6, Mathura Road, Faridabad. ......Appellant ...Respondent CORAM:-HON'BLE MR.JUSTICE ADARSH KUMAR GOELHON'BLE MRS.JUSTICE DAYA CHAUDHARY PRESENT:Mr.Rajesh Katoch, Advocate, for the appellant.Mr.Vibhav Jain, Advocate, for respondent. **** ADARSH KUMAR GOEL, J. (Oral) The revenue has preferred this appeal under Section 260A of theIncome Tax Act, 1961 ( for short, “the Act”) against the order dated7.12.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench”H”Delhi in ITA No. 1960 (DEL) of 2007 for the assessment year 1995-96,proposing to raise the following substantial questions of law: A “Whether on the facts and in the circumstancesof the case, the Hon'ble Tribunal is justified inholding that the judgment in Virtual Soft SystemsLtd v. CIT, 290-ITR 83 (SC) will apply eve afterinsertion of Explanation 4 to Section 271(1)(c) ofthe Income Tax Act, 1961 with effect from1.4.1976?” B “ Whether on the facts and in the circumstancesof the case, the Hon'ble Tribunal is right in deleting the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 on the groundthat the total income of the assessee has beenassessed at a loss figure?” C “ Whether, on the facts and in thecircumstances of the case, the Hon'ble ITAT isright in confirming the deletion of penalty underSection 271(1)c) by relying on the Apex Courtdecision in the case of Virtual Soft Systems Ltd.,(189-ITR-83) as the issue has now been finallyresolved by the larger bench of the Hon'bleSupreme Court in the decision dated 18.8.2008 inthe case of Commissioner of Income Tax Vs. GoldCoin Health Food (P) Ltd. [(2008) 218 CTR (SC)359]?” D That the tax effect involved in this cae isRs.10,70,000/- , which is more than the monetarylimits prescribed by the DBDT in instruction No. 5of 2008 dated 15.5.2008 issued under Section268A of the Income Tax Act for filing appealbefore the Hon'ble High Court.” The assessee declared loss but during assessment, theAssessing Officer did not accept the extent of loss claimed and additionwas made to the income. Proceedings were also initiated for penalty.Finally, penalty was levied. On appeal, CIT(A) deleted the penalty while upholding the addition. The Tribunal dismissed the appeal of the revenuefollowing the judgment of the Hon'ble Supreme Court in Virtual SoftSystems Ltd v. CIT (2007) 289 ITR 83. It is stated that the judgmentrelied upon by the Tribunal has been overruled by the Hon'ble SupremeCourt in Commissioner of Income Tax v. Gold Coin Health Food PvtLtd., (2008) 304 ITR 308. This is not disputed by learned counsel for theassessee. In view of the above, this appeal is allowed. The order of theTribunal is set aside and the matter is remanded to the Tribunal for freshdecision in accordance with law. Parties are directed to appear before the Tribunal for furtherproceedings on 7.12.2009. (ADARSH KUMAR GOEL) JUDGE July 31, 2009raghav (DAYA CHAUDHARY) JUDGE Note: Whether this case is to be referred to the Reporter? ........Yes/No