COMMISSIONER OF INCOME-TAX VS RAJIV UDYOG
1999 P T D 2264
[227 I T R 209]
[Madhya Pradesh High Court (India)]
Before A. R. Tiwari and N. K. Jain, JJ
COMMISSIONER OF INCOME-TAX
Versus
RAJIV UDYOG
Miscellaneous Civil Case No.277 of 1993, decided on 08/04/1996.
Income-tax---
----Reference---Penalty---Concealment of income---Addition of sales tar refunded agreed to by assessee---Wrong claim to deduction under S.80J-- Tribunal holding that there was no concealment and claim for deduction was made bona fide---Tribunal justified in cancelling penalty---No question of' law arises---Indian Income Tax Act, 1961, Ss.256(2) & 271(1)(c).
Penalty under section 271(1)(c) of the Income Tax Act, 1961, was levied on the assessee on account of agreed addition of sales tax refund and .j wrong claim to section 80J relief in the sixth year. The Commissioner of Income-tax (Appeals) held that the assessee was under a bona fide belief that the sales tax refund was liable to be passed on to its constituents from whom it was collected, and that similarly,-the assessee made a bona fide claim for deduction under section 80J for the assessment year 1983-84 because that was the fifth year of existence of the assessee which had come into existence in 1979-80 and before that it was a proprietary concern. In view of these facts the Commissioner of Income-tax (Appeals) cancelled the penalty and this was upheld by the Tribunal. On a reference application under section 256(2):
Held, dismissing the application, that the order of the Tribunal was based on appreciation of facts and did not give rise to any question of law.
CIT v. Ashoka Marketing Ltd. (1976) 103 ITR 543 (scl and CIT v. Kotrika Venkataswamy and Sons (1971) 79 ITR 499 (SC) ref.
D.D. Vyas for the Commissioner.
R. C. Kochatta for the Assessee.
JUDGMENT
A. R. TIWARI J.---The applicant (Commissioner of Income-tax, Bhopal) has filed this application under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), seeking a direction to the Tribunal to state a case and refer the proposed question as extracted below on rejection of the application registered as R.A. No.241/Ind. of 1992 for the assessment year 1983-84 on February 8, 1993, arising out of the order passed by the Tribunal on July 27, 1992, in I.T.A. No.681/Ind of 1989 for our consideration and opinion:
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in cancelling penalty levied under section 271(1)(c) for concealment of sales tax refund received by the assessee and for wrong claim of deduction under section 80J in the sixth year of industrial undertaking?"
The facts lie in a narrow compass.
Penalty of Rs.85,000 was levied under section 271(1)(c) of the Act against the non-applicant-assessee. This was deleted by the First Appellate Authority on appreciation of facts on record. On appeal by the Revenue, the Tribunal concurred with the finding of the First Appellate Authority and held that penalty is not leviable as it was not a case of concealment. Dissatisfied, the applicant filed an application under section 256(I) of the Act which was rejected on February 8, 1993. Thereafter, the applicant has filed this application under section 256(2) of the Act.
We have heard Shri D. D. Vyas, learned counsel for the applicant, and Shri R. C. Kochatta, learned counsel for the non-applicant.
We have perused the order of the Tribunal passed on July 27, 1992, in I.T.A. No.681/Ind of 1989. The Tribunal took the view as under:
"Rival parties are heard and the relevant record seen. This is a case of levy of penalty on an agreed addition of Rs.26,137 representing sales tax refunded to the assessee, but the assessee taking the same to its balance-sheet under a bona fide belief that the amount of refund in turn was liable to be passed on to its constituents from whom it was collected. The mere fact that the assessee had agreed to this amount being treated as its income did not constitute an act of concealment on the part of the assessee and, therefore, the learned Commissioner of Income-tax (Appeals) rightly took the view that no penalty could be imposed therefore We also agree with the view of the learned commissioner of Income-tax (Appeals) that the claim for deduction under section 80J was made by the assessee in a bona fide manner looking to the fact that the assessment year involved, i.e., 1983-84, was in fact the fifth year of the existence of the assessee which had come into existence from the assessment year 1979-80 while before that it was the proprietary concern of Shri Motilal. Therefore, in our view, the learned Commissioner of Income-tax (Appeals) again took the correct view in holding that there could be no charge of concealment against the assessee on this count either. We find no merit in this appeal."
As is luculent, the conclusion is based on appreciation of facts. The Tribunal reached a categorical finding that there was no concealment and that the claim for deduction was made in a bona fide manner. It is held in CIT v. Ashoka Marketing Ltd. (1976) 103 ITR 543 (SC) and CIT v. Kotrika Venkataswamy and Sons (1971) 79 ITR 499 (SC) that an order based on appreciation of facts does not give rise to a referable question of law. The same is the position in the instant case.
Accordingly, we find this application devoid of merit and dismiss the same with no order as to costs. Counsel fee for each side is, however, fixed at Rs.750, if certified.
M.B.A./2048/FCApplication dismissed.