COMMISSIONER OF INCOME TAX Vs. HINDUSTAN HYDRAULICS

JUDGEMENT

(1.) The following question of law has been referred at the instance of the Revenue for the opinion of this court by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated May 31, 1996, in I.T.A. No. 304(ASR)/91 for the assessment year 1977-78:

(2.) Learned counsel for the Revenue submitted that the Assessing Officer as well as the Commissioner of Income-tax (Appeals) in the quantum proceedings had adjudicated the issue against the assessee and in such circumstances, the Tribunal was not justified in deleting the penalty.

(3.) On the other hand, learned counsel for the assessee besides supporting the order passed by the Tribunal relied upon the judgments in CIT v. Calcutta Credit Corporation Ltd., 1987 166 ITR 29 (Cal.), CIT v. Manilal Tarachand, 2002 254 ITR 630 (Guj.), CIT v. Late G.D. Naidu, 1987 165 ITR 63 (Mad.), CIT v. SSP P. Ltd., 2008 302 ITR 43 (P & H) and CIT v. Reliance Petroproducts P. Ltd., 2010 322 ITR 158 (SC) to submit that since the assessee had furnished the report of M/s. Blue Star Ltd. wherein it was stated that the machinery was erected and installed in February, 1977, the findings recorded by the authorities were not correct though on the basis of report submitted by M/s. A.B.C. Consultants Ltd. in the assessment proceedings, it was held that the machinery was erected and installed during the period relating to the assessment year 1978-79. It was further argued that the penalty of Rs. 1,54,083 imposed on the assessee by the Assessing Officer and upheld by the Commissioner of Income-tax (Appeals) was unjustified. Support was drawn from the following findings recorded by the Tribunal: