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2015 (7) TMI 746 - HC - Income TaxPenalty proceedings under Section 271(1)(c)- ITAT held that the order of the AO does not spell out the reasons for levying of penalty - Held that - The Court is not inclined to interfere with the impugned order of the ITAT. The fact that the Assessee company was under liquidation at the time the penalty proceedings was initiated is not in dispute. It is also noted by the ITAT in the impugned order that the Assessee was not undertaking any business from the AY 1997-98 onwards. In the circumstances the Court is not persuaded to hold that the impugned order of the ITAT gives rise to any substantial question of law which requires to be examined.
Issues:
Appeal against penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961 for delay in filing appeal, justification for delay due to company going into liquidation, adequacy of reasons for levying penalty, whether impugned order of the ITAT raises substantial question of law. The judgment deals with an appeal challenging a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, against a company that went into liquidation. The Income Tax Appellate Tribunal (ITAT) had upheld the penalty order, prompting the appeal. The company's affairs were under the control of the Official Liquidator (OL) when the penalty was imposed by the Assessing Officer (AO). The Commissioner of Income Tax (Appeals) (CIT (A)) had also affirmed the penalty order, citing unsatisfactory reasons for the delay in filing the appeal. The ITAT, however, in its order, acknowledged the justifiable reasons for the delay in filing the appeal given the company's liquidation status. It further noted that the AO's penalty order lacked clarity on the reasons for imposing the penalty. The High Court, after considering the arguments, declined to interfere with the ITAT's decision. It recognized that the company was indeed undergoing liquidation during the penalty proceedings and had ceased business activities from the assessment year 1997-98 onwards. The Court found no substantial question of law arising from the ITAT's order that warranted further examination. Consequently, the Court dismissed the appeal against the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, for the delay in filing the appeal, given the circumstances surrounding the company's liquidation and cessation of business activities.
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