Cit Vs. Laxmandas Nandlal

Cit vs Laxmandas Nandlal

Type Court Judgment Court Madhya Pradesh Decided Aug 27, 2004

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Citation: sooperkanoon.com/511584
Court: Madhya Pradesh High Court
Decided On: Aug 27, 2004
Case Number: IT Reference No. 47 of 1999 27 August 2004
Subject: Direct Taxation

Case Summary

AI-generated summary - not the official court judgment text.

Counsels: R.L. Jain, for the Revenue. Head Note: INCOME TAX Reference--QUESTION OF LAWPenalty under section 271BHeld: Question as to whether the explanation offered by an assessee for delay in filing audit report constitutes sufficient cause or not, could not be gone into in proceedings under section 256(2) becaus...

Key legal issue: Direct Taxation

Parties & Advocates

Appellant / Petitioner

Cit

Advocate R.L. Jain, <i>for the Revenue.</i>

Respondent

Laxmandas Nandlal

Legal References

Reported In: [2005]142TAXMAN353(MP)

Excerpt

.....under section 271bheld: question as to whether the explanation offered by an assessee for delay in filing audit report constitutes sufficient cause or not, could not be gone into in proceedings under section 256(2) because same is a question of fact and not a question of law. income tax act, 1961 s.256(2) income tax act, 1961 s.271b in the madhya pradesh high court, indore bench a.m. sapre and ashok kumar tiwari, jj. - section 2(f): [dipak misra, k.k. lahoti & rajendra menon, jj] service tax - packaging and bottling of liquor whether amounts to manufacture within meaning of section 2(f) of central excise act 1944? finance act 932 of 1994), section 65 (76 b) (as amended on 16.6.2005) - held, the first limb of the inclusive definition of the manufacture under section 2(f) of central excise act has a very wide connotation. as the definition clause lays down an inclusive facet, the term manufacture has to be construed in a natural and plain manner and would include any process incidental or ancillary to the completion of a manufactured product. keeping in view the context in which the term manufacture has been used, it would take in its fold incidental and ancillary process in the manufacture or finishing of any manufactured product. it does not leave any room for doubt that an allied process should be integral and inextricable part of manufacture of completeness and presentability of the manufactured product. section 65(76b) of finance act used the words but it does not include. thus it is a definition which has the inclusive as well as exclusive facet. by virtue of the same it may include certain things and exclude others. it is well settled principle of law that a definition is not to be read in isolation and has to read in context of phrase which it defines, releasing that function of a definition is to give precision and certainty to the word or phrase which would otherwise be vague and uncertain. regard being had to the exclusionary fact in the..........to the high court for its opinion. accordingly, the reference application made by the revenue under section 256(1) of the act before the income tax appellate tribunal was dismissed, holding that the questions proposed are essentially questions of fact. it is this order against which or consequent upon which, this application has been presented by the revenue by taking recourse to the provisions of section 256(2) of the act praying for calling of the questions proposed by the revenue to be answered by this court.3. heard shri r.l. jain, learned counsel for the applicant.4. these are the questions which the revenue has proposed for being answered by this court on a reference being called from the tribunal under section 256(1) of the act:-'(i) whether on the facts and circumstances of the case and in law the hon'ble income tax appellate tribunal was legally justified in deleting the penalty levied under section 271b of the income tax act in this case ?(ii) whether on the facts and in the circumstances of the case, and in law the relief allowed by the income tax appellate tribunal by way of deletion of penalty under section 271b was not contrary to and inconsistent with the material on record and therefore liable to be reversed as perverse being based on presumptions instead of evidence ?'5. having heard learned counsel for the petitioner and having perused record of the case, we are of the opinion that no referable question arises in this case and the question really involved in the case, is question of fact. accordingly, tribunal did not commit any error when it declined to make a reference to this court.6. basically, the question before the taxing authority and which travelled upto the tribunal was in relation to not filing of the audit report by the assessee within the time stipulated. it is on account of this default, the proceedings under section 271b ibid., were initiated against the assessee. the question was accordingly examined by the taxing authority.....

Full Judgment

ORDER

A.M. Sapre, J.

The decision rendered in this case shall also govern disposal of I.T.R. Nos. 30,50 and 51 of 1999 because, all these Income Tax References involve common question and secondly, they arise out of common order between the same parties. The only difference being that they arise out of the different assessment years.

2. This is an application made by the revenue CITunder section 256(2) of the Income Tax Act consequent upon the dismissal of their application made under section 256(1) of the Act by the Tribunal in R.A. Nos. 110 to 112/IND/98, which in turn arises out of an order passed by the Tribunal dated 23-4-1998 in I.T,A. Nos. 304 to 306/ IND/94 pertaining to the assessment years 1988-89 to 1990-91. By impugned order, the learned Members of the Income Tax Appellate Tribunal were of the view that the questions proposed by the revenue do not involve any question of law which is capable of being referred to the High Court for its opinion. Accordingly, the reference application made by the revenue under section 256(1) of the Act before the Income Tax Appellate Tribunal was dismissed, holding that the questions proposed are essentially questions of fact. It is this order against which or consequent upon which, this application has been presented by the revenue by taking recourse to the provisions of section 256(2) of the Act praying for calling of the questions proposed by the revenue to be answered by this court.

3. Heard Shri R.L. Jain, learned counsel for the applicant.

4. These are the questions which the revenue has proposed for being answered by this court on a reference being called from the Tribunal under section 256(1) of the Act:-

'(i) Whether on the facts and circumstances of the case and in law the Hon'ble Income Tax Appellate Tribunal was legally justified in deleting the penalty levied under section 271B of the Income Tax Act in this case ?

(ii) Whether on the facts and in the circumstances of the case, and in law the relief allowed by the Income Tax Appellate Tribunal by way of deletion of penalty under section 271B was not contrary to and inconsistent with the material on record and therefore liable to be reversed as perverse being based on presumptions instead of evidence ?'

5. Having heard learned counsel for the petitioner and having perused record of the case, we are of the opinion that no referable question arises in this case and the question really involved in the case, is question of fact. Accordingly, Tribunal did not commit any error when it declined to make a reference to this court.

6. Basically, the question before the Taxing Authority and which travelled upto the Tribunal was in relation to not filing of the audit report by the assessee within the time stipulated. It is on account of this default, the proceedings under section 271B ibid., were initiated against the assessee. The question was accordingly examined by the Taxing Authority after obtaining the explanation from the assessee. The Tribunal, while deciding the second appeal, held that the explanation offered by the assessee is genuine, bona fide and consequently, audit reports filed by the assessee were taken on record for making assessment of the assessee though filed late, as the reasons for delay explained were found satisfactory.

7. In our opinion, the questions, referred supra proposed by the revenue do not involve any question of law. The explanation offered by assessee was accepted by the Tribunal. The Tribunal had the jurisdiction to accept the explanation offered by the assessee and it was rightly accepted. This court cannot go into the question i.e., as to whether the explanation offered by an assessee constitute sufficient cause or not in proceedings under section 256(1) of the Act We, therefore, agree with the observations made by the learned Members of the Tribunal while dismissing the application made by the revenue under section 256(1) of the Income Tax Act and hold that this application does not involve any referable question of law so as to call the same from Tribunal for being answered by this court on merits.

8. As a consequence, the application fails and is hereby dismissed. No costs.

Same Court & Year Madhya Pradesh · 2004 Same Parties Cit vs Laxmandas Nandlal Same Subject Direct Taxation

Direct Taxation