Commissioner of Income Tax, Kanpur vs Swastic Biscuits Manufacturing Co.

The present appeal has been filed u/s 260-A of the Income Tax Act, 1961 (hereinafter referred to as the Act) against the order of the Tribunal dated 26th November, 1999 relating to the assessment year 1989-90. In the present appeal the Commissioner of Income Tax, Kanpur has raised the following questions of law, which according to him are substantial questions of law arising out of the order of the Tribunal: 1. Whether on the fact and in the circumstances of the case the Income Tax Appellate Tribunal was correct in law in holding that no penalty u/s 27ID of the Income Tax Act, 1961 was leviable for the assessment year 1989-90?

Whether on the fact and in the circumstances of the case the Income Tax Appellate Tribunal was correct in law in allowing the assessee''s appeal by holding that no penalty u/s 271D of the Income Tax Act, 1961 was leviable in the case of the assessee for the assessment year 1989-90 without properly appreciating the facts and the circumstances of the case and the legal provisions of sections 269SS and 271D of the Income Tax Act, 1961 and without giving any specific reason for the conclusions drawn by it?

It appears that the respondent assessee had raised loans amounting to Rs. 3,59,500 to be paid to U.P. Financial Corporation for getting attachment of the factory premises. As the loans which raised violated the provisions of Sections 269SS of the Act penalty proceedings u/s 271D of the Act was initiated and the Assessing Officer imposed a sum of Rs. 3,59,500 as penalty which was reduced to Rs. 1,77,500by the Commissioner of Income Tax (Appeals). The Tribunal by the impugned order has deleted the penalty.

We have heard Sri Shambhu Chopra, learned standing counsel for the Revenue and Sri Pawan Shree Agarwal, has stated that he has received instructions on behalf of the respondent assessee.

We find that the Commissioner of Income Tax (Appeal) while deleting the penalty had given cogent reasons and accepted the explanation offered by the respondent assessee. Section 273B provides that penalty u/s 27 ID could not be imposed if the assessee shows reasonable cause. In the case the reasonable cause shown by the assessee been accepted partly by the Commissioner of Income Tax (Appeals) and also by the Tribunal.

We are, therefore, of the considered opinion that the questions raised herein cannot be said to be the substantial questions of law arising out of the order of the Tribunal, inasmuch as the findings recorded by the Commissioner of Income Tax (Appeals), and concurred by the Tribunal are based on appreciation of evidence and materials on records and findings of fact. The appeal is, therefore, dismissed in limine.