SHANTI ENTERPRISE Vs. ASSISTANT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) By this petition filed under Article 226 of the Constitution of India, the petitioner has prayed to issue writ of certiorari or any other appropriate writ to quash and set aside the order of respondent No.2 - Commissioner of Income Tax -I at Annexure -L rejecting the revision petition filed by the petitioner under Section 264 of the Income Tax Act, 1961 ("the Act" for short)on the ground that the petitioner had not made out sufficient cause for condonation of delay in filing the revision application; and has also prayed to quash the order levying penalty under Section 271 (1)(c) of the Act at Annexure A, dated 12.3.2010, and has sought further direction against respondent No.1 to refund the penalty amount of Rs.1,13,32,499.00 with interest.

(2.) As per the facts stated in the petition, the petitioner filed his return of income declaring loss of Rs.4,63,776.00 for the Assessment Year 2005 -06. The Assessing Officer completed assessment under Section 143(3) of the Act on 31.12.2007 by making addition of Rs.3,01,58,459.00 on account of suppression of sales and Rs.8,11,000.00 on account of unproved sales return. The above said order of assessment was unsuccessfully challenged by the petitioner before the Commissioner of Income Tax (Appeals). The petitioner then filed appeal before the Income Tax Appellate Tribunal ("the Tribunal" for short). Pending the appeal before the Tribunal, the assessing Officer imposed upon the petitioner penalty of Rs.1,13,32,499.00 by order dated 12.3.2010 under Section 271(1)(c) of the Act on the ground of concealing particulars of income or furnishing inaccurate particulars of such income by the petitioner. The Tribunal allowed the appeal of the petitioner by order dated 22.2.2011. However, the amount of penalty was recovered from the petitioner by giving adjustment against the refund available to the petitioner of the tax paid for the F.Y. 2003 -2004. The respondents then preferred appeal before this Court against the order of the Tribunal. This Court dismissed the said appeal by order dated 13.9.2012. The petitioner thus became entitled to refund of the penalty with interest. The petitioner through its Chartered Accountant wrote many letters to refund the penalty. However, since no action was taken, the petitioner preferred revision application under Section 264 of the Act against the order of penalty. The revision application came to be rejected on the ground of delay. The petitioner has contended that since the petitioner succeeded before the Tribunal against the order of assessment, by virtue of provisions of Section 275(1A) of the Act, the respondents were required to delete the penalty and refund the amount of penalty.

(3.) The petition is opposed by affidavit in reply mainly stating that the petitioner had made request to cancel the penalty only on 3.8.2012 and by that time, more than six months had already lapsed after the order of the Tribunal and, therefore, no order cancelling penalty could have been made under Section 275(1A) of the Act. It is further stated that the petitioner was though served with the order of penalty, still however, to cover up the lapse on the part of the petitioner of not preferring revision application within the time limit, the petitioner came out with false story of non service of the order of penalty. It is stated that the revision application under Section 264 was required to be filed within one year from the date of communication of the order of penalty, however, same was filed after long delay for which no explanation was provided, therefore, there was no error in rejecting the revision application.