Jammu & Kashmir High Court - Srinagar Bench
Pr. Commissioner Of Income Tax vs J & K Power Development Corporation on 15 October, 2024
Author: Sanjeev Kumar
Bench: Sanjeev Kumar
Serial No. 12
Regular Cause List
HIGH COURT OF JAMMU & KASHMIR AND LADAKH
AT SRINAGAR
ITA 7/2019
Pr. Commissioner of Income Tax ...Appellant/Petitioner(s)
Through: Mr. Umar Rashid Wani, Advocate
Vs.
J & K Power Development Corporation ...Respondent(s)
Limited
Through: Mr. Ab. Rashid Malik, Sr. AAG with
Mr. Mohd Younis Hafiz, Advocate
CORAM:
HON'BLE MR. JUSTICE SANJEEV KUMAR, JUDGE.
HON'BLE MR. JUSTICE RAJESH SEKHRI, JUDGE.
ORDER
15.10.2024
1. This appeal, filed by the Principal Commissioner of Income Tax,
Jammu, under Section 260-A of the Income Tax Act, 1961, is directed against an
order dated 27th July, 2019, passed by the Income Tax Appellate Tribunal,
Amritsar Bench (the "Tribunal") in ITI No. 339(ASR)/2016, filed by the
respondent, for the assessment year 2011-12
2. From the perusal of the proceedings sheet, it transpires that this appeal
is not formally admitted. However, this Court vide order dated 12 th July, 2023,
had proposed to take substantial questions of law for consideration at the time of
final hearing, are proposed by the appellant in the Memo of Appeal.
3. Having heard learned counsel for the parties and perused the material
on record, we are of the considered opinion that the questions of law proposed in
the Paragraph No. 3 of the Memo of Appeal are not the substantial questions of
law which require determination in the instant appeal. Most of the questions
framed are questions of fact. We, however, find that the only question of law that
needs determination in this case is as under:
"Whether the proceedings for imposition of
penalty under Section 271(1)(c) of the Income Tax Act,
1961, can be vitiated if the satisfaction be derived by the
Assessing Authority or the Joint Commissioner (Appeals)
or the Commissioner (Appeals) or the Principal
Commissioner/ Commissioner, as the case may be, during
the course of any proceedings under the Income Tax Act,
is referable to both the limbs of clause (c) i.e.,
concealment of the particulars of the income and
furnishing of incorrect particulars of such income together
and in the alternative."
4. We have heard learned counsel for the parties on the aforesaid issue
and have gone through the judgment under appeal. In terms of Section 271(1) (c)
of the Income Tax Act, 1961, penalty proceedings can be initiated provided the
Assessing Officer or the Joint Commissioner (Appeals) or Commissioner
(Appeals) etc., as the case may be, is satisfied that any person has inter alia
concealed the particulars of the income or furnished the incorrect particulars of
such income. Before taking the penalty proceedings to logical end, the Assessee
is also required to be put on notice for offering his explanation to such
concealment or furnishing incorrect particulars of such income etc.
5. The Tribunal has on facts found that the notice which was served upon
the Assessee for seeking his explanation was not clear and unambiguous. The
Assessing Authority concerned had not recorded its satisfaction with regard to
one of the two limbs or on both the limbs indicated in clause (c) of sub-section 1
of Section 271. The notice issued to the Assessee was a composite notice
intimating the Assessee that he was liable to be proceeded for imposition of
penalty for having concealed the particulars of his income/ for having furnished
incorrect particulars for such income.
6. The Assessing Authority was itself not clear, whether it was a case of
concealment of particulars of income by the Assessee or his failure to furnish
correct particulars of such income. The Assessee too was deprived of a clear
opportunity to give the explanation in view of the confusion created by the
Assessing Authority itself. It is in these circumstances, the Tribunal, after relying
upon the several precedents, came to the conclusion that it was a case where the
Assessee had not given the proper opportunity to offer his explanation and,
therefore, the impugned order of imposition of penalty was vitiated being in
violation of the principles of natural justice. The Tribunal also found fault with
the requisite satisfaction which the Assessing Authority was required to arrive at
before initiating the penalty proceedings. We fully concur with the view taken by
the Tribunal. We, however, find that the Tribunal while accepting the appeal of
the respondent and setting aside the impugned order of penalty did not give
liberty to the Income Tax Authorities to issue fresh notice in accordance with
law.
7. Be that as it may, the order impugned before us does not suffer from
any illegality and, therefore, there is no case made out for interference with the
judgment of the Tribunal. This appeal is, therefore, found without any merit and
the same is accordingly dismissed. However, we leave it open to the appellants
to proceed against the respondent, if it is required, strictly in accordance with
law.
(RAJESH SEKHRI) (SANJEEV KUMAR)
JUDGE JUDGE
SRINAGAR:
15.10.2024
"Mir Arif"
