2009 (7) TMI 60 - HC - Income Tax

High Court overturns Tribunal, remands penalty decision under Income Tax Act for fresh review.

The High Court of Punjab and Haryana allowed the revenue's appeal against the Income Tax Appellate Tribunal's decision to delete a penalty imposed under ... Penalty u/s 271(1)(c) – retrospective amendment – insertion of Explanation 4 - The assessee declared loss but during assessment, the Assessing Officer did not accept the extent of loss claimed and addition was made to the income. Proceedings were also initiated for penalty. Finally, penalty was levied – ITAT set aside the penalties – matter remanded to ITAT The High Court of Punjab and Haryana heard an appeal by the revenue against a decision made by the Income Tax Appellate Tribunal. The appeal was in reference to a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 1995-96. The Tribunal had deleted the penalty, citing a judgment in Virtual Soft Systems Ltd v. CIT, which was subsequently overruled by the Supreme Court in Commissioner of Income Tax v. Gold Coin Health Food Pvt Ltd. The High Court allowed the appeal, set aside the Tribunal's order, and remanded the matter back to the Tribunal for a fresh decision. The tax effect involved in the case was Rs.10,70,000, exceeding the monetary limits for filing an appeal before the High Court. The parties were directed to appear before the Tribunal for further proceedings on 7.12.2009.