The Commissioner Of Income Tax v. M/S Amar Singh Kulwant Singh

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.416 of 2008 & connected case beingI.T.A. No.565 of 2008Date of decision: 23.12.2010 The Commissioner of Income Tax. Vs. M/s Amar Singh Kulwant Singh. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Vivek Sethi, Standing Counselfor the appellant. for the appellant. Mr. G.R. Sethi, Advocatefor the respondent in I.T.A. No.565 of 2008. --- ADARSH KUMAR GOEL, J. 1. This order will dispose of I.T.A. Nos.416 and 565 of2008 as according to the appellant, both the appeals involvecommon questions. 2. I.T.A. No.416 of 2008 has been preferred by therevenue under Section 260-A of the Income Tax Act, 1961 (forshort, “the Act”) against the order of the Income Tax AppellateTribunal, Amritsar in I.T.A. No.138(ASR)/2007 for the assessmentyear 1991-92 claiming following substantial questions of law:- “1. Whether, on the facts and in the circumstances of thecase, the ITAT was right in law in deleting the penaltycase, the ITAT was right in law in deleting the penalty 2. of Rs.73,218/- imposed under section 271(1)(c) of theIncome Tax Act, 1961? Whether, on the facts and in the circumstances of thecase, the ITAT was right in law in holding that nosatisfaction for initiation of penalty proceedings wasrecorded by the AO in the assessment order whenthe finding regarding the furnishing of inaccurateparticulars of income had been elaborately given inthe assess order in a detailed manner?” 2. In the course of assessment, the Assessing Officer made addition to the declared income of the assessee which wassustained by the CIT(A) and the Tribunal with some modification.The additions became final. While passing the order ofassessment, the Assessing Officer found that the assessee hadfurnished inaccurate particulars and directed initiation of penaltyproceedings. Thereafter, penalty was levied. On appeal, the CIT(A) set aside the penalty only on the ground that the AssessingOfficer failed to record satisfaction for levy of penalty. 3. We have heard learned counsel for the parties. 4. The matter has been gone into by this Court inCIT v. Pearey Lal & sons (EP) Ltd. [2009] 308 ITR 438 and in orderdated 25.9.2010 in I.T.A. No.441 of 2007 CITv. Nakodar Co-operative Sugar Mills Pvt. Ltd.and it was held that recording ofsatisfaction was a matter substance and when addition was madeand direction for initiation of penalty issued, it could not be heldthat no satisfaction had been recorded for initiation of penalty. Reference was also made to the amendment by way of additionof sub Section (1B) to Section 271 of the Act by Finance Act,2008. 5. In view of above, the impugned orders cannot besustained. The questions of law have to be answered in favour ofthe revenue. Accordingly, the appeals are allowed and the matteris remanded to CIT(A) for fresh decision on the issue inaccordance with law. 7. The assessee in I.T.A. No.565 of 2008 is representedbefore us and may appear before CIT(A) for further proceedings.The assessee in 416 of 2008 is not represented before us andmay be summoned by issuing appropriate notice by the CIT(A). A photocopy of this order be placed on the file of theother connected case. (ADARSH KUMAR GOEL) JUDGE December 23, 2010ashwani (AJAY KUMAR MITTAL) JUDGE