Delhi High Court
Commissioner Of Income Tax vs R. Dalmia on 20 February, 1991
Author: B Kirpal
Bench: B Kirpal, S Duggal
JUDGMENT
B.N. Kirpal, J.
1. In respect of the asst yr. 1953-54, out of the penalty proceedings which had been initiated against the respondent, the Tribunal has referred the following question to this Court :
"Whether on the facts and in the circumstances of the case Tribunal was legally correct in cancelling the penalty of Rs. 9,66,600 imposed by the IAC under s. 271(1)(c) of the IT Act, 1961 following their order in quantum appeal in I.T.A. No. 4296 of 1973-74 which has not been accepted by the Revenue ?"
2. Briefly stated, the facts are that the assessment was completed on 28th March, 1958 for the aforesaid assessment year. Thereafter proceedings were initiated under ss. 147 and 148 of the IT Act and two additions of Rs. 93,000 and Rs. 5,51,400 were made on account of unexplained cash credits sanding in the books of the assessed. Appeal filed against the said assessment to the AAC was unsuccessful.
The respondent then filed a further appeal and vide order dt. 22nd August, 1975 both the aforesaid additions in respect of the asst. yr. 1953-54 were deleted by the Tribunal.
In the mean time, penalty proceedings under s. 271(i)(c) had been initiated. The IAC levied a penalty of Rs. 9,66,600. An appeal was filed to the Appellate Tribunal. The Tribunal took note of the fact that the aforesaid two additions had been deleted vide its order dt. 22nd August, 1975 and, therefore, the Tribunal, vide its order dt. 17th December, 1975, cancelled the imposition of penalty. It is thereafter that the present question has been referred under s. 256(1).
3. It is evident that at the time when the Tribunal decided the appeal against the levy of penalty, the quantum appeal had been decided in favor of the assessed. This being so, unless there was some other facts which were on the record, the penalty appeal had naturally to be decided in favor of the assessed. The mere fact that the correctness of the decision in the quantum appeal had not been accepted by the Revenue could be no ground for the Tribunal to decide in any way except to allow the assessed's appeal.
4. We are informed that against the decision in the quantum appeal, reference was filed and this Court answered the question of law in such a way that the Tribunal once again went into the merits of the case and ultimately decided the quantum appeal against the assessed. This has happened long after the present reference has been made to this Court As far as the present reference is concerned, the wording of the question is such that penalty appeal was decided the additions which had been made had been set-aside by the Tribunal wherein the addition of the aforesaid two amounts has been upheld. Whether penalty in respect thereof can be levied or not is not for us to consider. We are only concerned with the order dt. 17th December, 1975 of the Tribunal setting-aside the levy of penalty at a time when the quantum appeal of the assessed had been decided in his favor.
5. In our opinion, therefore, the question referred has to be answered in the affirmative and in favor of the assessed. There will be no order as to costs.
