Joint Commissioner of Income Tax (Assessment) vs Panchratna Hotels Pvt. Ltd.

D.A. Mehta, J.—The appellant Revenue has proposed the following two questions:

(1) Whether the hon''ble Income Tax Appellate Tribunal was right in law and on facts in cancelling the penalty levied u/s 271(1)(c) of the Income Tax Act on the ground that no penalty can be levied when assessed income is loss ignoring the provision of Explanation 4 to Section 271(1)(c)?

(2) Whether the hon''ble Income Tax Appellate Tribunal was right in law and on facts in holding that there was no concealment on the part of the respondent?

Heard Mr. K.M. Parikh, the learned standing counsel for the appellant.

As can be seen from the impugned order of the Tribunal dated September 5, 2002, the Tribunal has followed the assessee''s own case for the assessment years 1989-90 and 1990-91, i.e., after introduction of Explanation 4 below Section 271(1)(c) of the Income Tax Act, 1961, and come to the conclusion that if the finally assessed income is a loss, no penalty is leviable and Explanation 4 does not get attracted in such a situation. This decision of the Tribunal came up by way of reference application filed by the Revenue and the said application was rejected by the High Court, against which SLP has also been dismissed by the Supreme Court, vide decision reported in [1995] 212 ITR 60.

In the present case, the Tribunal has further found on facts that no penalty is leviable merely on the basis of estimated addition relating to cost of construction and profits in respect of business receipts. Similarly, even with regard to disallowance of investment allowance in relation to the hotel building, the Tribunal has found that no penalty for concealment is leviable.

In these circumstances, in the absence of any infirmity in the impugned order of the Tribunal, no question of law, much less a substantial question of law, arises from the order. The appeal is accordingly dismissed.