2006 (12) TMI 556 - HC - Income Tax

Summary

Issues involved: Appeal against order passed by Income Tax Appellate Tribunal regarding penalty under Section 271-D of the Income Tax Act.

Summary:
The High Court of Punjab & Haryana heard an appeal by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT) regarding the penalty under Section 271-D of the Income Tax Act. The main contention was that the penalty proceedings under Section 271-D were separate from the order passed by the Commissioner of Income Tax (Appeals) and should not have been deleted by the ITAT. The CIT (Appeals) had set aside the original assessment orders for the appellant, directing denovo assessments for both years. The High Court held that once the original assessment orders were set aside, including the penalty under Section 271-D, they would not survive. The department's order under Section 271-D would practically submerge due to the CIT (Appeals) order for denovo assessment. The respondent argued that fresh assessment orders were passed following the CIT (Appeals) direction, without reference to the penalty under Section 271-D. The High Court found no substantial questions of law and dismissed the appeal.

In conclusion, the High Court upheld the decision of the ITAT to delete the penalty under Section 271-D, as it was deemed to be part of the original assessment orders that were set aside for denovo assessments. The appeal by the Revenue was dismissed as no substantial legal questions were found to arise from the case.