Delhi High Court
Commissioner Of Income Tax vs Textile & General Trading Co. on 17 September, 1999
Equivalent citations: (2000) 158 CTR Del 350
ORDER
BY THE COURT:
By this petition under section 256(2) of the Income Tax Act, 1961, the Revenue seeks a direction to the IT Appellate Authority to refer the following question, in respect of the assessment year 1987-88, for the opinion of this Court ..
'Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in confirming the order of Commissioner (Appeals) VIII-New Delhi cancelling the penalty under section 271(1)(c) of the Income Tax Act levied at Rs. 1,29,446 by the assessing officer for filing of inaccurate particulars of income loss by the assessee inasmuch as claiming the liability of interest payable to bank which the assessee-firm itself denied before Hon'ble High Court. "
2. Bereft of elaborate details, the material facts are that for the relevant assessment year, the assessee filed its return of income declaring a loss of Rs. 3,00,392, which represented the interest payable by the assessee on loan taken from New Bank of India. During the course of assessment proceedings, the assessing officer noticed that the assessee had not done any business during the year in consideration. He, therefore, asked the assessee to furnish information with reference to the said claim and also furnish a copy of the submissions made by the assessee before the High Court in the suit filed by the said bank for recovery of the loan amount. From the documents so filed the assessing officer noted that the assessee had denied its liability towards the bank and had also taken up the plea that the suit was barred by time. He, therefore, concluded that the assessee, having denied its liability for payment of interest to the bank, by claiming the same as loss in the IT proceedings, had furnished inaccurate particulars of its income by making a wrong claim of loss. He, accordingly, levied a penalty of Rs. 1,29,446 on the assessee under section 271 (1)(c) of the Act.
Being aggrieved, the assessee preferred an appeal to the Commissioner (Appeals). The Commissioner (Appeals) deleted the penalty by observing that the assessee had correctly mentioned in its return the fact relating to the afore noted amount of interest and, therefore, it could not be said that the assessee had made a wrong claim- Aggrieved of the said order, the Revenue filed an appeal to the Tribunal. The Tribunal, while concurring with the Commissioner (Appeals), held as follows ..
"We feel that the assessing officer proceeded to levy penalty mainly in view of the fact that the assessee denied his liability for payment of the principal amount by taking a technical plea that its recovery was time-barred. The plea taken by the assessee before the Hon'ble High Court cannot be made the basis for coming to a conclusion that he had made a wrong claim about its liability to pay the interest and that it had furnished incorrect particulars of its income."
Revenue's application under section 256(1) having been dismissed by the Tribunal, the present petitioner has been filed.
3. We have heard learned counsel for the Revenue. Having perused the order of the Tribunal we are of the view that the proposed question is not a question of law fit for reference to this Court.
4. As noticed by the Commissioner (Appeals) and the Tribunal, it was clearly stated by the assessee in a note filed with the return of income that the business loss had arisen mainly on account of interest on the amount due to the bank, who had already instituted a suit for the recovery of the loan amount. Merely because the assessee was contesting the suit filed by the bank on various grounds including the plea of limitation, it cannot be said that making a claim in respect of the interest payable to the bank tantamounts to furnishing of inaccurate particulars in respect of the said claim. It is obvious even from the format of the question that apart from the said stand of the assessee in the suit, no other material or. circumstance has been brought on record by the assessing officer which may lead to the conclusion that the assessee had concealed the particulars of its income by furnishing inaccurate particulars thereof. The Tribunal has confirmed the order of the Commissioner (Appeals) holding that the act of the assessee in making the aforesaid claim does not warrant imposition of penalty under section 271(1)(c) of the Act. This is a concurrent finding of fact by the two appellate authorities and in our view the question proposed is not one of law.
We do not find any infirmity in the order of the Tribunal declining to make reference on the afore noted question. The petition is accordingly dismissed.
