No penalty can be levied merely on the basis of provisional assessment

[AMIT BAJAJ ADVOCATE]

Rajasthan High Court in a very important case namely ACTO vs Jain Hardware Stores has held that no penalty can be levied in the provisional assessment as for leving penalty definite findings and conclusions and many things have to be proved, therefore penalty cannot be levied merely on the basis of provisional assessment.

 

The High Court while dismissing the revision petition of the State held as under:

 

"After going through the orders impugned, I am of the opinion, that the Tax Board as well as the DC (A) have rightly deleted the penalty imposed by the AO taking into consideration the fact that merely on the basis of provisional assessment, penalty is not leviable. There is no basis for such imposition after all for imposition of penalty Assessing Officer has to come to a definite finding and conclusion and many things have to be proved, imposition of penalty is a serious matter and cannot be imposed in a casual or summary manner like in the present case therefor, on the basis of provisional assessment, an estimation penalty cannot be levied and it has rightly been deleted. I do not find any illegality, irregularity and perversity, in the orders passed by the Tax Board as well as by the DC(A), as such, no interference is called for by this Court as no question of law is involved."

 

Full judgement is as under:

 

Assistant Commercial Taxes Officer, Ward-I, Ajmer Versus M/s. Jain Hardware and Mill Stores, Ajmer [2014 (10) TMI 67 - RAJASTHAN HIGH COURT]