The Commissioner Of Incometax, Karnal v. Sh. Hardayal Singh (Huf), Nand Nagar, Behind Sec.6, U.e. Karnal

ITA No.257 of 2008 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.257 of 2008 Date of decision: 1.7.2008 The Commissioner of IncomeTax, Karnal ......Appellant Versus Sh. Hardayal Singh (HUF), Nand Nagar, Behind Sec.6, U.E. Karnal ......Respondent CORAM:-HON'BLE MR.JUSTICE SATISH KUMAR MITTALHON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present:Mr. Sanjeev Kaushik, Advocate for the appellant-revenue. * * * Rakesh Kumar Garg, J . 1.The assessment under Section 143(3)/147 of the Act wascompleted against the assessee vide order dated 23.1.2004 passed by theAssessing Officer. During the course of the assessment proceedings, itwas found that the assessee has received interest on FDRs atRs.1,28,232/- which was not included in the original return filed inresponse to notice under Section 148 of the Act. The said amount wasincluded in the assessable income of the assessee. While makingassessment vide order dated 23.1.2004, the Assessing Officer also notedthat penalty proceedings under Section 271 (1)(c ) of the Act are beinginitiated separately. Notice under Section 274 read with Section 271 of theAct was issued, asking the assessee to show cause as to why penalty under Section 271(1)(c ) of the Act for concealment of income benot imposed and thereafter vide order dated 1.11.2004 passed by theAssistant Commissioner of Income Tax, Karnal Circle, Karnal a penalty ofRs.82,436/- was imposed upon the assessee. The Commissioner ofIncome Tax (Appeals) Karnal, vide his order dated 9.9.2005 accepted theappeal filed by the assessee against the penalty order dated 1.11.2004passed by the Assessing Officer and accordingly, penalty of Rs.82,436/-imposed by the Assessing Officer under Section 271 (1)(c ) of the Act wasdirected to be deleted. 2.Aggrieved against the said order, the revenue filed an appealbefore the Income Tax Appellate Tribunal, Delhi Bench ‘I’, New Delhi. TheTribunal found that penalty was not imposable as there was no consciousbreach of law. While dismissing the appeal of the revenue, vide orderdated 5.6.2007, the Tribunal found that no specific infirmity has been pinpointed by the revenue in the conclusion arrived at by the Commissionerof Income Tax (Appeals). 3.The present appeal under Section 260-A of the Income TaxAct, 1961 (hereinafter referred to as the 'Act') has been filed by the revenueagainst the order dated 5.6.2007 passed by the Income-Tax AppellateTribunal, Delhi Bench ‘I’, New Delhi (for short, the ITAT) in ITANo.4330/Del/2005 for the assessment year 1996-97 raising the followingsubstantial questions of law:- “1.Whether on the facts and in the circumstances ofthe case, the Hon’ble ITAT was right in law in sustainingthe order of the Commissioner of Income-tax (Appeals)[CIT(A)], canceling the penalty, levied under Section 271(1)(c) of the Act, by applying the ratio of judgement ofthe Hon’ble High Court, in the case of CIT v. Munish Iron Store, 263 ITR 484, as in that case revised returnwas filed voluntarily, by the assessee, whereas in theinstant case, the respondent assessee filed return inresponse to notice under Section 148 of the Act and thecase is covered by explanation 3 to Section 271(1)(c ) ofthe Act attracting levy of penalty? 2.Whether on the facts and in the circumstances ofthe case, the order passed by the learned ITAT is interms of the provisions of the Income Tax Act, 1961 asthe Assessing Officer (AO) while initiating the penaltyproceedings under Section 271(1)(c ) of the Act hasrecorded his satisfaction in the assessment order itself?” 4.We have heard Sh. Sanjeev Kaushik, learned counsel for therevenue and have also perused the impugned order. Iron Store, 263 ITR 484, as in that case revised returnwas filed voluntarily, by the assessee, whereas in theinstant case, the respondent assessee filed return inresponse to notice under Section 148 of the Act and thecase is covered by explanation 3 to Section 271(1)(c ) ofthe Act attracting levy of penalty? 2.Whether on the facts and in the circumstances ofthe case, the order passed by the learned ITAT is interms of the provisions of the Income Tax Act, 1961 asthe Assessing Officer (AO) while initiating the penaltyproceedings under Section 271(1)(c ) of the Act hasrecorded his satisfaction in the assessment order itself?” 4.We have heard Sh. Sanjeev Kaushik, learned counsel for therevenue and have also perused the impugned order. 5.No doubt, the Tribunal has found that penalty proceedingswere initiated by the Assessing Officer without recording the satisfactionthat the assessee has concealed the income but it has also given acategoric finding that no specific infirmity has been pin pointed by therevenue in the conclusion of the Commissioner of Income Tax (Appeals).The Tribunal has also found that penalty is not imposable if there is noconscious breach of law. The finding of fact recorded by the Tribunal hasnot been disputed by the learned counsel appearing on behalf of therevenue. From the findings recorded by the Tribunal wherein it has beenheld that no penalty is imposable if there is no conscious breach of law, thequestion of law as raised by the counsel for the revenue does not arise. Itis pertinent to mention here that it is not the case of the revenue that thefinding of fact so recorded by the Tribunal is perverse. 6.In view of the above, the questions of law as raised by the revenue do not arise for the consideration of this Court. Hence, we find nomerit in the present appeal and the same is dismissed. (RAKESH KUMAR GARG) JUDGE July 1, 2008ps (SATISH KUMAR MITTAL) JUDGE