The Income Tax Officer, Ward 1(7) V. Associated Engineering Corporation

TAXAP/1662/2007

AI Insights

The case involves the Income Tax Officer, Ward 1(7) as the appellant and Associated Engineering Corporation as the respondent. The dispute centered on the deletion of a penalty imposed under Section 271(1)(a) of the Income Tax Act by the ITAT, which the Revenue challenged in the Gujarat High Court. The penalty was related to the default period from April 1, 1986, to September 30, 1986, under the provisions of the Income Tax Act concerning the timely filing of income tax returns. The High Court's decision reversed the ITAT's ruling, emphasizing the need to uphold penalties for non-compliance with tax return filing deadlines, citing the importance of discouraging defaults under section 139(1) of the Act.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 798694 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 23-12-2014
• Assessment Year: misc
• Other Referred Cases: Ramlal Chironjilal v. Commissioner of Income-Tax, reported in 235 ITR 470
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: S N DIVATIA
• Assessee Lawyers: S UDHIR M EHTA
• Keywords: Assessment; CIT(A); Income Tax; ITAT; Penalty
• Section: 139(1); 139(2); 271(1)(a)

Judgement Text

"O/TAXAP/1662/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1662 of 2007 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 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 ? ================================================================ THE INCOME TAX OFFICER, WARD 1(7)....Appellant(s) Versus ASSOCIATED ENGINEERING CORPORATION....Opponent(s) ================================================================ Appearance: MR SUDHIR M MEHTA, ADVOCATE for the Appellant(s) No. 1 MR SN DIVATIA, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERIandHONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 4 O/TAXAP/1662/2007 JUDGMENT Date : 23/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant has challenged the judgment and order dated 28.2.207 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench 舛in ITA No. 428/Ahd/2001. 2. While admitting this Tax Appeal on 14.12.2007, this Court has framed the following substantial question of law: “Whether on the facts and in the circumstances of the case and in law, the Income Tax Appellate Tribunal is right in deleting penalty imposed under Section 271(1)(a) of the Income Tax Act for the period from 1.4.1986 to 30.9.1986?” 3. The facts of the present case are that the return of income for AY 1982-83 was filed on 16th October, 1982 declaring total income of Rs. 78,254/-. After considering the material oan record, the assessment order came to be passed. The appellant has challenged the said order before the CIT(A) which came to be partly allowed. Against the said order, the assessee has preferred appeal before the ITAT which came to be partly allowed. Being aggrieved by the said order of ITAT, the Revenue has preferred Page 2 of 4 O/TAXAP/1662/2007 JUDGMENT the present Tax Appeal before this Court. 4. We have heard the learned advocates appearing for the parties and considered the submissions. Learned advocate for the appellant contended that the observations made by the Tribunal in para 18 are contrary to the decision of the Madhya Pradesh High Court in the case of Ramlal Chironjilal v. Commissioner of Income- Tax, reported in 235 ITR 470, whereby, it has been held that default made under section 139(1) of the Act, if it is allowed to continue then it would put a premium on the default made by the assessee who would sit comfortably without inviting any penalty till a notice was issued to him under section 139(2). In that view of the matter, the question is answered in favour of the Revenue and against the assessee. It is held that the Income Tax Appellate Tribunal is not right in deleting penalty imposed under Section 271(1)(a) of the Income Tax Act for the period from 1.4.1986 to 30.9.1986. The appeal is allowed. (K.S.JHAVERI, J.) (K.J.THAKER, J) mandora Page 3 of 4 O/TAXAP/1662/2007 JUDGMENT Page 4 of 4 "