Click Here For Best Books On Taxation & Law. Upto 60% Off On Select Titles. Free Shipping & Pay On Delivery!
 

Click Here To Subscribe To Our Free Newsletter

Home › All Judgements › CIT vs. M/s Sidhartha Enterprises (Punjab & Haryana High Court)

CIT vs. M/s Sidhartha Enterprises (Punjab & Haryana High Court)

Posted on by editor
COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: July 16, 2009 (Date of publication)
AY:
FILE:
CITATION:

Click here to download the judgement (sidhartha_enterprises_dharmendra_271_1_c_penalty.pdf)

UOI vs. Dharmendra Textile 306 ITR 277 (SC) on 271 (1) (c) penalty distinguished

The assessee claimed set off of capital loss against profits of business, which was disallowed and penalty proceedings u/s 271 (1) (c) for ‘furnishing inaccurate particulars’ was imposed. The CIT (A) and ITAT deleted the penalty by holding that set off was wrongly claimed on account of counsel’s negligence and penalty was not leviable. The department argued before the High Court that even if the set-off of capital loss against business profits was by negligence or mistake, the fact remains that the particulars of income furnished were not correct and willful concealment not being an essential requirement for levy of penalty u/s 271(1)( c) as held by the Supreme Court in UOI vs. Dharmendra Textile Processors 306 ITR 277, penalty could not be deleted. HELD, rejecting the plea:

The judgment in Dharmendra Textile cannot be read as laying down that in every case where particulars of income are inaccurate, penalty must follow. What has been laid down is that qualitative difference between criminal liability u/s 276C and penalty u/s 271(1) ( c) had to be kept in mind and approach adopted to the trial of a criminal case need not be adopted while considering the levy of penalty. Even so, the concept of penalty has not undergone change by virtue of the said judgment. Penalty is imposed only when there is some element of deliberate default and not a mere mistake. In view of the finding that the furnishing of inaccurate particulars was simply a mistake and not a deliberate attempt to evade tax, penalty was not leviable.

See Also: UOI vs. Rajasthan Spinning (Supreme Court), CIT vs. Haryana Warehousing (Punjab & Haryana High Court), ACIT vs. VIP Industries (ITAT Mumbai) and Kanbay Software vs. DCIT (ITAT Pune)

Related Posts:

  • CIT vs. Chetak Enterprises Pvt. Ltd (Supreme Court) It is manifest that all properties, movable and immovable (including actionable claims) belonging to or vested in a company at the date of its registration would vest in the company as incorporated under the Act. In other words, the property acquired by a promoter can be claimed by the company…
  • Punjab Cricket Association vs. ACIT (ITAT Chandigarh) The assessee is regularly following commercial activity by commercially exploiting its property and rights to hold matches and thereby earning huge income, hence the said activity can not be said to be incidental activity rather the commercial exploitation of the match is one of the main activity of the assessee,…
  • ITO (TDS) vs. The Distt. Manager, Punjab State Warehousing Corporation (ITAT Chandigarh) Though, before the milling of the paddy, the Government / procurement agencies remain the owner of the paddy, however, the moment the paddy is milled, the Government / procurement agencies lose their ownership and control over the paddy and the by-product but have right only on the ‘milled rice’ for…
  • V.R.Enterprises vs. ITO (ITAT Mumbai) The assessee was in possession of primary purchase documents and the payments to the suppliers was through banking channels. The assessee had established corresponding sales before Ld. AO. The books of accounts were audited wherein quantitative details of stock was provided. We are of the considered opinion that there could…
  • Arun Arya Vs. ITO (J&K High Court) When a calculating tax dodger finds it a profitable proposition to carry on evading taxes over the years, if the only risk to which he is exposed is a monetary penalty in the year in which he happens to be caught. The public in general also tends to lose faith…
  • S. Rajalakshmi vs. ITO (Bombay High Court) The reopening of assessment u/s 147 on the basis of information in the form of observations of ITAT is on sound footing and which constitutes a tangible material for the purpose of reopening as the assessee did not file her return of income as required u/s 139(1) of the Act…

Related Judgements

  1. Krishna Lifestyle vs. UOI (Bombay High Court) 

    (i) While the arrears of the State have priority over private debts owed to ordinary or unsecured creditors, this priority does not extend over secured creditors (subject to statutory exception). The fact that the tax arrears are recoverable as arrears … Krishna Lifestyle vs. UOI (Bombay High Court)…
  2. Sales Tax Practitioners vs. State (Bombay High Court) 

    S. 61 of the MVAT which confers right to do audit to CAs and excludes Advocates and STPs is neither discriminatory, arbitrary or unreasonable and consequently not unconstitutional. Only CAs are competent to perform audit functions having regard to the expertise achieved as a result of their academic knowledge…
  3. CIT vs. Jai Parabolic Springs (Delhi High Court) 

    the Supreme Court held that the assessee was not entitled to claim a deduction by way of a letter filed before the AO without filing a revised return. However, this judgement is limited to the power of the AO to entertain a claim for deduction otherwise than by revised…
  4. P.R.P. Granites vs. ACIT (Madras High Court) 

    Where the AO issued a show-cause notice alleging that the Appellant was not an “new undertaking” eligible for deduction u/s 10B but in the assessment order denied deduction on the different ground that the activity of the assessee did not constitute “manufacturing” without considering any of the several judgements…
  5. CIT vs. Inder V. Nankani (Bombay High Court) 

    Where the assessee made a VDIS declaration in which diamonds were disclosed and he later claimed that the moneys received by him were the sale proceeds of the said diamonds which could not be taxed but the AO held that the sale was fictitious as the second purchaser to…