In a recent ruling the division bench of the Punjab & Haryana High Court refused to interfere the order of the Appellate Tribunal deleting the penalty imposed on the assessee under section 271(1)(a) of the Income Tax Act.
The Court confirmed the order in which the Tribunal found that the default was on the basis of the legal opinion of a professional and the act of the assessee doesn’t have any impact on the tax collection.
In the instant case, the petitioner-assessee was a company hadclaimed the set off of its business income of Rs. 1.85 crores against the brought forward business losses of the earlier years. Consequently, penalty under section 271(1)(a) were imposed on the assessee. The Appellate Tribunal, on appeal deleted the penalty by finding that the assessee had set off the claim according to the legal opinion from the office of the Chartered accountant.The order was challenged by the Revenue before the High Court.
While confirming the order, the bench comprising of Chief Justice S.J Vazifdar and Justice Deepak Sibal observed that “the loss was allowed to be carried forward in the assessment year, namely, assessment year 2002-2003. Inter alia, in these circumstances, the Tribunal found as a matter of fact that the letter dated 13.12.2006 was voluntary and not merely because a notice had been issued under Section 143(2) of the Act. This is a perception on the basis of the facts of the case and warrants no interference.”
The Court also found that the order need not be reversed as there is no financial implication on account of the change in the basis of the claim.
Read the full text of the Judgment below.
