COMMISSIONER OF INCOME TAX Vs. ROY DURLABHJI

JUDGEMENT

(1.) THE Revenue has prayed for the following question of law to be directed to be called for from the Income-tax Appellate Tribunal :

(2.) THE reference application under Section 256(1) of the Income-tax Act, 1961, was dismissed on the ground that the additions which were made by the Income-tax Officer were finally deleted by the Income-tax Officer and the order of the Income-tax Appellate Tribunal was challenged under Section 256(2) of the Act before this court. THE reference application submitted by the Revenue with regard to the additions had already been dismissed and learned counsel for the Revenue has informed that the matter has not been taken to the apex court and, therefore, the order passed by the Income-tax Appellate Tribunal deleting the additions has become final. In the present case, the Income-tax Appellate Tribunal has set aside the penalty on the ground that the additions have already been deleted and, therefore, no penalty can be levied. THE reference application was also dismissed under Section 256(1) on the same ground. Since the matter with regard to the additions made in the quantum appeal no longer survives, it is not an appropriate case where a direction should be given to the Income-tax Appellate Tribunal for making a reference under Section 256 in respect of penalty. As the matter of penalty is qua tax and there is no liability to tax, no penalty can be levied.