Commissioner of Income Tax vs J.K. Synthetics Ltd.

Dr. M.K. Sharma, J.—This is an application filed by the Revenue seeking for review of and recalling the order dt. 13th Nov., 1995, passed by this Court in ITC No. 132 of 1990 and ITC No. 133 of 1990, dismissing the reference applications preferred by the Revenue under s. 256(2) of the IT Act, 1961, relevant to the asst. yrs. 1967-68 and 1972-73.

Mr. Rajendra appearing for the Revenue submits that there is an error apparent on the face of the record in the order dt. 13th Nov., 1995, and, Therefore, the said order requires to be reviewed by recalling the order. Drawing our attention to the findings recorded by the Tribunal in its order in the quantum appeal in respect of the asst. yr. 1967-68 to the effect that the use of the machinery by another person was not disclosed by the assessed and, Therefore, the assessed was responsible for the underassessment of its Income Tax for the asst. yr. 1967-68 which occurred by reason of the omission or failure to disclose fully and truly all the material facts necessary for its assessment for that year, he submits that the conclusion arrived at by the Tribunal in the penalty proceedings to the effect that there was no finding of the Tribunal for the asst. yrs. 1967-68 and 1972-73 that the claims made by the assessed were not bona fide or that there was any fraud or gross or willful neglect on its part are on the face of it erroneous and perverse.

On the other hand, Mr. Monga, appearing for the assessee, submits that there is no error apparent on the face of the record nor the findings recorded by the Tribunal in the penalty proceedings were in any way perverse or erroneous. According to him, by way of this review application, the Revenue seeks to get the entire matter reheard on the merits, which is not permissible and beyond the scope of a review application.

We have given our careful consideration to the submissions made by learned counsel for the parties and have also perused the records connected with the present review application. On a perusal of the records we, in fact, find that the aforesaid appreciation recorded by the Tribunal in the quantum appeal, relates to the asst. yr. 1967-68 and not to the asst. yr. 1972-73, which fact is also conceded by learned counsel for the Revenue. In view of the aforesaid concession and also the facts staring at our face the review application on the basis of the submission of Mr. Rajendra could at best be related to the asst. yr. 1967-68 and in no case the same could be related to the asst. yr. 1972-73.

Now coming to the prayer of review made by the Revenue in respect of the asst. yr. 1967-68, in our judgment on 13th Nov., 1995, we on examination of record, and in the light of the findings recorded by the Tribunal in the penalty proceedings relevant to the asst. yr. 1967-68 that the assessed had discharged its onus to prove that the difference was not owing to fraud or gross or willful neglect, came to the conclusion that the said findings recorded by the Tribunal are findings of fact and that no question of law could be said to have arisen there from. On a scrutiny of the record, we find that in fact the Tribunal has recorded such a concluded finding of fact both for the asst. yrs. 1967-68 and 1972-73 that in the quantum appeal there was no finding of the Tribunal that the claims made by the assessed were not bona fide or that there was any fraud or gross or willful neglect on its part. So far as the findings of the Tribunal in the quantum appeal for the asst. yr. 1967-68 are concerned, the same were recorded in order to justify the reopening of the assessment for the said assessment year. However, the proceedings for imposition of penalty and assessment proceedings are two separate and independent proceedings and, Therefore, separate and distinct provisions have been enacted in the statute for initiation of the same. Under the provisions of s. 271(1), a person becomes liable to pay penalty within the term and language of cl. (a) or (b) or (c). Therefore, the findings recorded by the Tribunal in the quantum appeal cannot be said to be decisive and concluded factor in the penalty proceedings.

The Tribunal in the penalty proceedings has recorded a concluded finding of fact that there is no finding in the quantum appeals for the asst. yrs. 1967-68 and 1972-73, that there was lack of bona fides or that there was any fraud, gross or willful neglect on the part of the assessee. A careful perusal of the findings of the Tribunal would make it apparent that in fact there is no such finding in the quantum appeal of the assessed for the asst. yr. 1967-68. There is also no finding of the Tribunal in the quantum appeal that the Explanation of the assessed is in any way false. It is also to be noted that in the penalty proceedings the Tribunal has not found that the assessed had concealed the particulars of its income or had furnished inaccurate particulars of its income. Therefore, it cannot be said that there is any error apparent on the face of the record as was sought to be made out by learned counsel for the Revenue. It is also to be noted that for the asst. yrs. 1968-69 and 1970-71, the assessments of the assessed were reopened, still this Court declined to call for a reference in the penalty proceedings initiated against the assessee.

In the result, this review application has no merit and is accordingly, dismissed, but without any costs.