The Commissioner Of Income Tax-Faridabad v. Sh. Gaje Singh

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. C.M. No.20873-CII of 2008 in/andI.T.A. No.627 of 2008Date of decision: 12.12.2008 The Commissioner of Income Tax-Faridabad. Vs. Sh. Gaje Singh. -----Appellant -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOELHON'BLE MR JUSTICE L.N. MITTAL Present:-Mr. Yogesh Putney, Sr. Standing Counselfor the appellant.-----for the appellant.----- ORDER: 1. Delay condoned.2. The revenue has preferred this appeal under Section 260-Aof the Income Tax Act, 1961 (for short, “the Act”) against the orderdated 8.6.2007 passed by the Income Tax Appellate Tribunal, DelhiBench ‘I’, New Delhi in I.T.A. No.4727/DEL/2005 for the assessmentyear 1997-98, proposing to raise following substantial questions of law:-2. The revenue has preferred this appeal under Section 260-Aof the Income Tax Act, 1961 (for short, “the Act”) against the orderdated 8.6.2007 passed by the Income Tax Appellate Tribunal, DelhiBench ‘I’, New Delhi in I.T.A. No.4727/DEL/2005 for the assessmentyear 1997-98, proposing to raise following substantial questions of law:- “i) Whether on the facts and circumstances of the case,the Hon’ble ITAT was right in holding that the view ofassessee regarding non taxability of interest onenhanced compensation was bonafide?the Hon’ble ITAT was right in holding that the view ofassessee regarding non taxability of interest onenhanced compensation was bonafide? ii) That the Hon’ble ITAT erred in deciding that provingcontumacious intent is an essential ingredient in levycontumacious intent is an essential ingredient in levy of penalty in contravention of the provisions of a CivilStatute like Income Tax Act in spite of there being somany judgements that breach of a Civil obligationattracts levy of penalty whether the contravention wasmade by the defaulter with any guilty intention or not? iii) That the order of the Hon’ble ITAT is in contraventionof the many judicial pronouncements includingThirupathy Kumar Khemka Vs. Commissioner ofIncome Tax 210 CTR 287 (Mad)?”of the many judicial pronouncements includingThirupathy Kumar Khemka Vs. Commissioner ofIncome Tax 210 CTR 287 (Mad)?” 3. The assessee received compensation in lieu of acquisitionof his land and filed return in respect of income from long term capitalgains for the assessment year 1998-99. No return had been filed bythe assessee for the assessment years 1994-95 to 1997-98, for whichnotice under Section 148 of the Act was issued to the assessee andassessment was made in respect of interest on enhancedcompensation. After completing assessment, the Assessing Officeralso levied penalty under Section 271(1)(c) of the Act on the groundthat prior to assessment year 1998-99, the assessee did not disclosethe interest income. The CIT(A) set aside the penalty. It was held thatthe assessee had not concealed any particulars of his income. Hecould be having bonafide belief that interest was not taxable in the yearof receipt but only after the issue was settled by higher Court. Thisview has been affirmed by the Tribunal following its earlier judgment inthe case of one Tek Ram. 4. It is not disputed that appeal of the revenue against theorder of the Tribunal in the case of Tek Ram titled asCommissioner of Income Tax, Faridabad v. Shri Tek Ram (I.T.A. No.579 of 2007)was dismissed by this Court on 4.2.2008. 5. Only contention raised now is that there was deliberateattempt at evasion by the assessee. 6. We do not find any merit in the contention raised. Validreasons have been given by the CIT(A) as well as the Tribunal fortaking the view that the assessee could be under bonafide impressionthat liability to pay tax accrued only after the issue was finalised by thehigher Court and not prior to that. 7. In view of above, no substantial question of law arises. 8. The appeal is dismissed. ( ADARSH KUMAR GOEL )JUDGE December 12, 2008ashwani ( L. N. MITTAL ) JUDGE