COMMISSIONER OF INCOME TAX V. GAJE SINGH

ITA/627/2008

AI Insights

The case revolves around the appeal by the Commissioner of Income Tax-Faridabad against the decision of the Income Tax Appellate Tribunal, which had earlier set aside the penalty levied on Sh. Gaje Singh for not disclosing interest income from enhanced compensation in his tax returns for the years 1994-95 to 1997-98. The Tribunal and CIT(A) found that Singh had a bona fide belief that the interest was not taxable in those years, a view supported by a similar case involving Tek Ram. The High Court dismissed the appeal, agreeing with the lower authorities that there was no deliberate attempt at evasion by Singh.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 682870 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 12-12-2008
• Assessment Year: misc
• Other Referred Cases: Thirupathy Kumar Khemka Vs. Commissioner of Income Tax, Commissioner of Income Tax, Faridabad v. Shri Tek Ram
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: YOGESH PUTNEY
• Keywords: Bonafide belief; Enhanced compensation; Penalty; Non-taxability of interest; Contumacious intent
• Section: 148; 271(1)(c); 260-A

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.M. No.20873-CII of 2008 in/and I.T.A. No.627 of 2008 Date of decision: 12.12.2008 The Commissioner of Income Tax-Faridabad. -----Appellant Vs. Sh. Gaje Singh. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N. MITTAL Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. ----- ORDER: 1. Delay condoned. 2. The revenue has preferred this appeal under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 8.6.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench ‘I’, New Delhi in I.T.A. No.4727/DEL/2005 for the assessment year 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 of assessee regarding non taxability of interest on enhanced compensation was bonafide? ii) That the Hon’ble ITAT erred in deciding that proving contumacious intent is an essential ingredient in levy I.T.A. No.627 of 2008 of penalty in contravention of the provisions of a Civil Statute like Income Tax Act in spite of there being so many judgements that breach of a Civil obligation attracts levy of penalty whether the contravention was made by the defaulter with any guilty intention or not? iii) That the order of the Hon’ble ITAT is in contravention of the many judicial pronouncements including Thirupathy Kumar Khemka Vs. Commissioner of Income Tax 210 CTR 287 (Mad)?” 3. The assessee received compensation in lieu of acquisition of his land and filed return in respect of income from long term capital gains for the assessment year 1998-99. No return had been filed by the assessee for the assessment years 1994-95 to 1997-98, for which notice under Section 148 of the Act was issued to the assessee and assessment was made in respect of interest on enhanced compensation. After completing assessment, the Assessing Officer also levied penalty under Section 271(1)(c) of the Act on the ground that prior to assessment year 1998-99, the assessee did not disclose the interest income. The CIT(A) set aside the penalty. It was held that the assessee had not concealed any particulars of his income. He could be having bonafide belief that interest was not taxable in the year of receipt but only after the issue was settled by higher Court. This view has been affirmed by the Tribunal following its earlier judgment in the case of one Tek Ram. 2 I.T.A. No.627 of 2008 4. It is not disputed that appeal of the revenue against the order of the Tribunal in the case of Tek Ram titled as Commissioner 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 deliberate attempt at evasion by the assessee. 6. We do not find any merit in the contention raised. Valid reasons have been given by the CIT(A) as well as the Tribunal for taking the view that the assessee could be under bonafide impression that liability to pay tax accrued only after the issue was finalised by the higher 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, 2008 ( L. N. MITTAL ) ashwani JUDGE 3 "