Deputy Commissioner Of Income Tax vs Aditya Chemicals Ltd.
2001 Latest Caselaw 283 Del

ORDER

Keshaw Prasad, A.M.:

These appeals, preferred by the revenue as well as by the assessed, are directed against Commissioner (Appeals)'s order, dated 16-1-1992, relating to assessment year 1989-90. The assessed has challenged the partial confirmation of penalty under section 271(1)(c) whereas the revenue has challenged the relief granted by the Commissioner (Appeals).

2. For the assessment year in question the assessed filed its return of income showing loss of Rs. 2.36 crores and the assessment was completed at a loss of Rs. 1.21 crores. The assessing officer initiated penalty proceedings for concealment of income and issued notice under section 274 read with section 271 of the Act. The assessed submitted reply and after considering the same the assessing officer levied a penalty of Rs. 1.68 crores. On appeal Commissioner (Appeals) confirmed the penalty to the extent of Rs. 56.01 lakhs and cancelled the penalty of balance amount. Both the assessed and the revenue are in appeal against the order of the Commissioner (Appeals).

2. For the assessment year in question the assessed filed its return of income showing loss of Rs. 2.36 crores and the assessment was completed at a loss of Rs. 1.21 crores. The assessing officer initiated penalty proceedings for concealment of income and issued notice under section 274 read with section 271 of the Act. The assessed submitted reply and after considering the same the assessing officer levied a penalty of Rs. 1.68 crores. On appeal Commissioner (Appeals) confirmed the penalty to the extent of Rs. 56.01 lakhs and cancelled the penalty of balance amount. Both the assessed and the revenue are in appeal against the order of the Commissioner (Appeals).

3. We have heard the rival submissions. It is a case of assessed who filed return showing loss and assessment was completed at reduced amount of loss. The Hon'ble Punjab & Haryana High Court in the case of CIT v. Prithi Pal Singh & Co. (1990) 183 ITR 69 (P&H) has concluded that in a case where returned income and assessed income is loss then no penalty for concealment of income under section 271(1)(c) is leviable. The Hon'ble Supreme Court has dismissed the appeal filed by the department (reported as CIT v. Prithipal Singh & Co. (2001) 20 DTC 664 (SC) : (2001) 166 CTR (SC) 187 and this fact has been conceded by the learned departmental Representative who has simply prayed that reference to the decision of Hon'ble Karnataka High Court in the case of P.R. Basappa & Sons v. CIT (2000) 16 DTC 370 (Karn-HC) : (2000) 243 ITR 776 (Karn) may be made in which the view is contrary to the view of Punjab & Haryana High Court referred to above. However, the fact remains that Hon'ble Supreme Court has confirmed the view taken by the Honble Punjab & Haryana High Court and has become trite law on the subject. Accordingly, no penalty under section 271(1)(c) could be imposed on the facts and circumstances of the case. Accordingly penalty under section 271(1)(c) confirmed by the Commissioner (Appeals) is cancelled. Consequently, the appeal filed by the revenue has no force and the same is also dismissed.

3. We have heard the rival submissions. It is a case of assessed who filed return showing loss and assessment was completed at reduced amount of loss. The Hon'ble Punjab & Haryana High Court in the case of CIT v. Prithi Pal Singh & Co. (1990) 183 ITR 69 (P&H) has concluded that in a case where returned income and assessed income is loss then no penalty for concealment of income under section 271(1)(c) is leviable. The Hon'ble Supreme Court has dismissed the appeal filed by the department (reported as CIT v. Prithipal Singh & Co. (2001) 20 DTC 664 (SC) : (2001) 166 CTR (SC) 187 and this fact has been conceded by the learned departmental Representative who has simply prayed that reference to the decision of Hon'ble Karnataka High Court in the case of P.R. Basappa & Sons v. CIT (2000) 16 DTC 370 (Karn-HC) : (2000) 243 ITR 776 (Karn) may be made in which the view is contrary to the view of Punjab & Haryana High Court referred to above. However, the fact remains that Hon'ble Supreme Court has confirmed the view taken by the Honble Punjab & Haryana High Court and has become trite law on the subject. Accordingly, no penalty under section 271(1)(c) could be imposed on the facts and circumstances of the case. Accordingly penalty under section 271(1)(c) confirmed by the Commissioner (Appeals) is cancelled. Consequently, the appeal filed by the revenue has no force and the same is also dismissed.

4. In the result, the appeal filed by the assessed is allowed and that of revenue is dismissed.

4. In the result, the appeal filed by the assessed is allowed and that of revenue is dismissed.