PCIT Vs Golden Peace Hotels And Resorts Pvt. Ltd. (Supreme Court of India)
Summary: The supplied material records a Supreme Court order in which the Supreme Court declined to interfere and dismissed the Special Leave Petition. The same supplied material also contains the underlying Bombay High Court judgment concerning the deletion of penalty levied under Section 271(1)(c) of the Income Tax Act, 1961.
Before the Bombay High Court, the Revenue sought admission of its appeal on the question whether the Tribunal was correct in deleting the penalty under Section 271(1)(c). The Revenue submitted that the revised returns showed disclosures made piecemeal and relied upon Mak Data (P.) Ltd. v. Commissioner of Income Tax, contending that such disclosure did not relieve the assessee from penalty. The Revenue also relied upon references in the assessment order to concealment and/or inaccurate particulars.
Read Bombay HC Judgment in this case: Bombay High Court Dismisses Revenue Appeal on Defective Penalty Notice
The assessee, on the other hand, submitted that there was no finding of concealment or furnishing of inaccurate particulars. It further pointed out that the notice dated 30/09/2016 had been issued in printed form without striking off the inapplicable portion identifying whether the penalty proceedings concerned concealment of particulars or furnishing of inaccurate particulars. Reliance was placed on Commissioner of Income Tax-11 v. Shri Samson Perinchery and Principal Commissioner of Income Tax v. New Era Sova Mine.
The Bombay High Court noted that both the Commissioner (Appeals) and the ITAT had categorically found no record of satisfaction by the Assessing Officer that the assessee had concealed income or furnished inaccurate particulars. The Court regarded such satisfaction as a sine qua non for initiation of penalty proceedings and held that, in its absence, the authorities had correctly ordered dropping of the penalty proceedings.
The High Court further considered its Division Bench decisions in Samson Perinchery and New Era Sova Mine. It observed that a penalty notice must clearly indicate whether the case involves concealment of particulars of income, furnishing of inaccurate particulars of income, or both. Where a printed form is used, the inapplicable portions must be struck off. In the present case, the notice dated 30/09/2016 had not done so.
The High Court therefore found no ground for interfering with the impugned order. It also declined to accept the Revenue’s reliance on MAK Data (P.) Ltd. in the peculiar facts, noting both the defective notice and the absence of a finding or satisfaction concerning concealment or furnishing of inaccurate particulars.
The High Court additionally recorded that in Tax Appeal No. 24 of 2019, based on identical facts and involving the same substantial question of law, it had declined to admit the appeal. Following that order, it likewise declined to admit the present appeal, held that no substantial question of law arose, and dismissed it.
The supplied Supreme Court portion then records only that the Supreme Court did not see any reason to interfere. The Special Leave Petition was accordingly dismissed, and any pending application was also disposed of. The supplied material does not set out any further Supreme Court reasoning or an independent determination of the Section 271(1)(c) issue.
Thus, on the supplied material, the Supreme Court’s disposition left the Bombay High Court’s dismissal undisturbed. The decisive reasoning concerning the defective notice and absence of recorded satisfaction is expressly contained in the underlying Bombay High Court judgment; the Supreme Court order itself simply records that it saw no reason to interfere and dismissed the Special Leave Petition.
Cases Discussed
- Mak Data (P.) Ltd. v. Commissioner of Income Tax, (2013) 38 Taxman.com 448 (SC) — considered by the Bombay High Court in relation to the Revenue’s contention concerning piecemeal disclosure and penalty; the Court declined to accept the contention in the peculiar facts because the notice was defective and there was no finding or satisfaction concerning concealment or inaccurate particulars.
- Commissioner of Income Tax-11 v. Shri Samson Perinchery, (2017) 392 ITR 4 — relied upon by the assessee and applied by the Bombay High Court concerning the requirement that the penalty notice clearly identify the applicable limb.
- Principal Commissioner of Income Tax v. New Era Sova Mine, 2019 SCC OnLine Bom 1032 — considered by the Bombay High Court on the requirement to strike off inapplicable portions of a printed penalty notice and clearly indicate the nature of the satisfaction.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
We do not see any reason to interfere in the matter.
The Special Leave Petition is, accordingly, dismissed. Pending application, if any, also stand disposed of.
