Commissioner of Income Tax vs Pardesh Dass Jain

Ashok Bhan, J.—The Commissioner of Income Tax, Haryana, Rohtak, has filed this petition u/s 256(2) of the Income Tax Act, 1961, for issuing a mandamus directing the Income Tax Appellate Tribunal, Delhi Bench, New Delhi, to refer the following question of law, along with the statement of the case, to this court for its opinion :

"Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in confirming the order of the Commissioner of Income Tax (Appeals) in cancelling the penalty of Rs. 60,812 imposed u/s 140A(3) of the Income Tax Act, 1961, especially when the petition filed by the Department u/s 256(2) has been admitted by the Punjab and Haryana High Court, Chandigarh, in respect of chargeability of tax at normal rates on the income earned from short-term capital gains on the sale of equity shares of Oswal Agro Mills Ltd. ?"

By our order of even date passed in a quantum case in Income Tax Cases Nos. 89 to 93 of 1991-- Commissioner of Income Tax Vs. Sangya Jain, , we have already held that a referable question of law does arise from the order of the Tribunal and directed the Tribunal to refer the question of law to this court for its opinion along with the statement of the case.

The Tribunal, in its order passed u/s 256(1) of the Act, observed ;

"The very fact that the Tribunal has decided the issue relating to applicability of the provisions of Section 115E in favour of the assessees establishes the bona fides of the assessees in calculation of the tax payable u/s 140A."

The order of penalty was in a way a consequential order passed by the Tribunal in view of the findings recorded by it in the quantum case.

Accordingly, we are of the opinion that the question of law does arise from the order of the Tribunal and we direct the Tribunal to refer the following question of law, along with the statement of the case, to this court for its opinion :

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in confirming the order of the Commissioner of Income Tax (Appeals) in cancelling the penalty u/s 140A(3) of the Income Tax Act, 1961 ?"