(O&M) THE COMMISISONER OF INCOME TAX V. M/S ALPHA TOYO LTD. SECTOR 6, FARIDABAD

ITA/667/2008

AI Insights

The case involves the Commissioner of Income Tax, Faridabad as the appellant and M/s Alpha Toyo Limited as the respondent. The dispute centered on the deletion of a penalty under Section 271(1)(c) of the Income Tax Act, 1961, which was initially imposed by the Assessing Officer for alleged furnishing of inaccurate particulars of income. The penalty amount was 9,32,200, which was later deleted by the CIT(A). The ITAT upheld the CIT(A)'s decision, leading to the revenue's appeal in the High Court. The High Court's decision to remand the case was influenced by the Supreme Court's precedent in the case of CIT vs. Gold Coin Health Food (P) Limited, which clarified the legal position regarding penalties under Section 271(1)(c).

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 702846 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 21-08-2014
• Assessment Year: misc
• Other Referred Cases: Virtual Soft Systems Limited vs. CIT, CIT-I, Ahmedabad vs. Gold Coin Health Food (P) Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AVNEESH JHINGAN
• Assessee Lawyers: TEJINDER JOSHI
• Keywords: Assessment; High Court; Income Tax; Penalty; Tribunal
• Section: 143(3); 271(1)(c); 268A; 260A

Judgement Text

"ITA No.667 of 2008 (O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.667 of 2008(O&M) Date of decision: 21.8.2014 Commissioner of Income Tax, Faridabad ……Appellant Vs. M/s Alpha Toyo Limited, Plot No.9H, Sector 6, Faridabad. …..Respondent CORAM: HON’BLE MR. JUSTICE AJAY KUMAR MITTAL HON’BLE MR. JUSTICE FATEH DEEP SINGH Present: Ms. Tejinder K.Joshi,Advocate for the appellant. Mr. Avneesh Jhingan, Advocate for the respondent. Ajay Kumar Mittal,J. 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 29.1.2008, Annexure IV passed by the Income Tax appellate Tribunal, Delhi Bench 'H' Delhi In ITA No.1571/DEL/2007 for the assessment year 1993-94 claiming following substantial questions of law: i) Whether the Hon'ble ITAT was right in law in confirming the order of the learned CIT(A) in deleting the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 amounting to ` 9,32,200/- in respect of various additions in assessee's income which were confirmed by the Hon'ble ITAT vide its order dated 21.12.2008 in ITA No.4085/Del/97? ii)Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT is right in confirming the deletion of penalty under section 271(1)(c) by relying on the Apex Court GURBAX SINGH 2014.10.07 12:20 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No.667 of 2008 (O&M) 2 decision in the case of Virtual Soft Systems Limited, 289 ITR 83 (SC) as the issue has now been finally resolved by the larger bench of the Hon'ble Supreme Court in the decision dated 18.8.2008 in the case of CIT-I, Ahmedabad vs. Gold Coin Health Food (P) Limited in Civil Appeal No.5065 of 2008 (arising out of SLP No.4379 of 2007) with C.A.No.5066/2008 @ SLP No.14785/2007? iii)That the tax effect in this case is ` 9,32,000/- which is above the monetary limits prescribed by the Board's instruction No.5 of 2008 dated 15.5.2008 issued under Section 268A of the Income Tax Act, 1961 for filing appeal before the Hon'ble High Court? 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee is a company engaged in the business of manufacture of automobile parts. The return of income was filed declaring a loss of ` 1,81,11,440/- on 31.12.1993. It included brought forward losses of ` 1,19,23,556 of earlier years. The return was revised to a loss of ` 60,60,037/- on 9.2.1994. Assessment under Section 143(3) of the Act was completed on 27.2.1996 at loss of ` 23,50,410/- which was inter alia increased to ` 35,25,166/- after giving appeal effect to the order of the Tribunal in appeal Nos.4158/Del/972 and 4085/Del/97 dated 22.7.2005. Penalty proceedings under Section 271 (1)(c) of the Act were initiated at the time of assessment and therefore, the Assessing officer after receipt of Tribunal's order proceeded to finalise the penalty proceedings and accordingly as per reasons recorded in his penalty order worked out the penalty on the alleged furnishing of inaccurate particulars in respect of `18,01,213. The Assessing officer vide order dated 22.3.2006, Annexure II, imposed penalty of ` 9,32,200/-. Aggrieved by the order, the assessee filed appeal before the Commissioner of Income Tax GURBAX SINGH 2014.10.07 12:20 I attest to the accuracy and integrity of this document High Court Chandigarh ITA No.667 of 2008 (O&M) 3 (Appeals) [CIT(A)]. Vide order dated 31.1.2007, Annexure III, the CIT(A) allowed the appeal and deleted the penalty of ` 9,32,200/- levied by the Assessing officer. Dissatisfied with the order, the revenue filed appeal before the Tribunal. Vide order dated 29.1.2008, Annexure IV, the Tribunal dismissed the appeal following the judgment of the Apex Court in Virtual Soft Systems vs. CIT (2007) 289 ITR 83. Hence the instant appeal by the revenue. 3. We have heard learned counsel or the parties and perused the record. 4. It was not disputed by the learned counsel for the parties that in view of the decision of the Apex Court in Commissioner of Income Tax vs. Gold Coin Health Food P.Limited, (2008) 304 ITR 308, the order passed by the Tribunal was unsustainable. It was further urged that the order of the Tribunal be set aside and the matter be remanded to it to decide afresh. 5. In view of the above, the appeal is allowed. The impugned order passed by the Tribunal dated 29.1.2008, Annexure IV is set aside and the matter is remanded to the Tribunal to decide it afresh, after affording an opportunity of hearing to the parties in accordance with law. (Ajay Kumar Mittal) Judge August 21, 2014 (Fateh Deep Singh) Judge ‘gs' GURBAX SINGH 2014.10.07 12:20 I attest to the accuracy and integrity of this document High Court Chandigarh "