COMMISSIONER OF INCOME TAX-IV V. SHAH ALLOYS LTD

TAXAP/1367/2011

AI Insights

The case involves the Commissioner of Income Tax-IV as the appellant and Shah Alloys Ltd as the respondent. The dispute centered on the penalty imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961, for the Assessment Year 2004-2005. The penalty was initially levied due to an excessive claim of deduction under Sec. 80-IA by the assessee, which was later contested and led to a series of appeals. The Income Tax Appellate Tribunal ultimately deleted the penalty, a decision which the Commissioner of Income Tax-IV appealed against in the High Court of Gujarat.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 758956 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 05-09-2012
• Assessment Year: misc
• Other Referred Cases: Reliance Petrol Products Pvt. Ltd. (322 ITR 158)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: PAURAMI SHETH
• Keywords: Appellate Tribunal; Assessment Year 2004-2005; Concealment of income; Income Tax; Penalty
• Section: 271(1)(c); 115JB; 260A; 80-IA; 80-IA

Judgement Text

"TAXAP/1367/2011 1/4 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 1367 of 2011 For Approval and Signature: HONOURABLE MR.JUSTICE V. M. SAHAI HONOURABLE MR.JUSTICE N.V. ANJARIA ========================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ========================================================= COMMISSIONER OF INCOME TAX-IV - Appellant(s) Versus SHAH ALLOYS LTD - Opponent(s) ========================================================= Appearance : MS PAURAMI B SHETH for Appellant(s) : 1, None for Opponent(s) : 1, ========================================================= CORAM : HONOURABLE MR.JUSTICE V. M. SAHAI and HONOURABLE MR.JUSTICE N.V. ANJARIA Date : 05/09/2012 ORAL JUDGMENT (Per : HONOURABLE MR.JUSTICE N.V. ANJARIA) The present appeal under Sec. 260A of the Income T ax Act, 1961 arises out of the common order dated 21.01.2011 of the TAXAP/1367/2011 2/4 JUDGMENT Income T ax Appellate T ribunal, Bench 'A', Ahmedabad passed in ITA No. 3615 of 2008 and 3616 of 2008, and relates to in so far as the said common order decides ITA No. 3616 of 2008 for Assessment Year 2004-2005. 1.1 The following question is raised by the appellant proposing it as a substantial question of law in this T ax Appeal. “Whether the Appellate Tribunal is right in law and on facts in canceling the penalty of Rs. 2,17,52,430/- levied by the Assessing Officer under section 271(1)(c)?” 2. We heard learned advocate Ms. Paurami Sheth for the appellant. 3. The relevant facts are that the assessment against the respondent-assessee was finalized for the Assessment Year 2004- 2005 determining the total income. The book profit under section 115JB of the Income T ax Act, 1961 (hereinafter referred to as 'the Act, for sake of brevity) came to be worked out. The Assessing Officer disallowed the excess claim of the assessee for deduction under Sec. 80-IA to the tune of Rs. 6,06,33,959/- from the profit for computing the benefit. 4. The Assessing Officer levied penalty of Rs. 2,17,52,430/- under section 271(1)(c) of the Act by order dated 25.03.2008. The TAXAP/1367/2011 3/4 JUDGMENT Commissioner of Income T ax (Appeals) deleted the penalty allowing the appeal of the assessee by order dated 12.08.2008. Thereafter, Revenue preferred appeal before Income T ax Appellate T ribunal which culminated into the impugned order. 5. On consideration of the impugned order and the facts on record, it could be seen that when the Assessing Officer and the CIT(A) passed their respective orders with regard to the imposition of penalty, the quantum appeal of the assessee being I.T.A NO. 2073 of 2006 for the Assessment Year 2004-2005 was pending before the T ribunal. That quantum appeal came to be allowed for the reasons recorded therein. 6. In the above light, the T ribunal was right in observing and holding in the impugned order, as under : “It is pertinent to note that ITA in quantum appeal has virtually restored the issue regarding quantum of explosion interest to the file of A.O.. However, the addition made on excessive deduction claimed u/s 80IA in respective Captive Power Plant has been deleted. Be that it may be we are of the view that in respect of both the additions, penalty u/s 271(1)(C) is not leviable keeping in view the ratio of judgment of the Hon'ble Supreme Court in the case of Reliance Petrol Products Pvt. Ltd.” 6.1 The deletion of addition by the T ribunal in the quantum appeal preferred by the assessee was decisive. The T ribunal correctly placed reliance on the decision of the Supreme Court in Reliance Petrol TAXAP/1367/2011 4/4 JUDGMENT Products Ltd. (322 ITR 158) that making incorrect claim by itself does not amount to concealment of income. When the quantum appeal itself was allowed and the deletions made were set aside, the whole basis which led to the imposition of penalty ceased to exist. In the circumstances, no ground could survive to sustain the penalty. 6.2 The present Appeal does not raise any substantial question of law in the light of above position of facts. 7. The appeal is accordingly dismissed. [V.M.SAHAI, J.] [N.V.ANJARIA, J.] cmjoshi "