PATEL CONSTRUCTION CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN Income Tax Reference No.290 of 1984, the nine questions of law have been referred by the Income Tax Appellate Tribunal to this Court for opinion under section 256(2) of the Income Tax Act, 1961 at the instance of the assessee for three assessment years viz. 1967-68, 1968-69 and 1969-70 challenging the legality of levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 for a sum of Rs.30,000/-, Rs.48,000/- and Rs.6,000/- respectively. In Income Tax Reference No. 135 of 1980, the legality of the penalty levied under section 271(1)(c) for assessment years 1965-66 and 1966-67, amounting to Rs.27,049/- and Rs.2,127/- respectively has been challenged. In Income Tax Reference No.135 of 1980, the revenue has come in reference only on the point whether the penalty was correctly levied under the law in force at the time of filing the revised return. When the matter came up for hearing on earlier occasions, we asked the learned counsel for the parties whether they were interested in pursuing these references which pertain to assessment years 1965-66 to 1969-70 and since the amount involved in each year is not relatively that big. The learned Counsel for the assessee stated before us on those occasions that the assessee having already paid the amount of penalty long back, would not have liked to go ahead with the litigation after a long lapse of more than 30 years but for the prosecution pending against the partners of the assessee firm on the basis of the alleged concealment which is also the basis for the levy of penalty, the legality of which is subject matter of challenge in this reference. At that time, we asked the revenue to ascertain as to what happened of the prosecution during the last 30 years and if nothing has taken place, whether they were interested in pursuing the prosecution. The matters were left at that point.

(2.) AFTER two years when the matters have come up, we are informed by the learned Counsel for the assessee that so far as the assessee is concerned, the partners of the assessee firm have already been discharged in March 1996. A copy of the order of discharge has been given to us which is taken on record and marked 'X' for identification. The learned Counsel for the assessee submits that to the knowledge of the assessee, no revision has been filed by the revenue against the above order of discharge dated 29th March 1996. He further submitted that the assessee will not pursue the reference if the revenue does not take further the order of discharge passed by the Trial Court. We asked the learned Counsel for the revenue to tell us the decision of the revenue in this regard. Dr.Balasubramaniun, learned Counsel for the revenue, fairly stated before us that the prosecution having been lodged in the year 1982 and the accused persons having been discharged by the Magistrate after long 15 years under section 245 of the Criminal Procedure Code, no further action has been taken in the matter and assures that in view of the facts and circumstances of the case and in particular the facts that the prosecution was launched in the year 1982 and the discharge was made in the year 1996, no further proceedings will be taken in that behalf. In view of the above statement, the learned Counsel for the assessee does not want to press the Income Tax Reference No.290 of 1984 and the questions referred at the instance of the assessee in Income Tax Reference No.135 of 1980.

(3.) THE learned Counsel for the parties have agreed that the controversy in the above reference stands concluded against the revenue by the decision of the Supreme Court in the case of Brij Mohan Vs. Commissioner of Income Tax, New Delhi, reported in 120 ITR 1 SC and a series of decisions rendered thereafter, following the ratio of the same. In view of the above legal position, answer to the above question is self evident. In the facts and circumstances set out above, both the references are not pressed and the questions referred to us are accordingly returned unanswered. References are accordingly disposed of. No costs.