TMI Blog2009 (7) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... SIKRI and VALMIKI J.MEHTA, JJ. Ms. Prem Lata Bansal, Advocate with Mr. Paras Chaudhry, Advocate and Ms. Anshul Sharma, Advocate, for the Appellant. Mr. R.M. Mehta, Advocate, for the Respondent. JUDGMENT A. K. SIKRI , J. (ORAL) - The assessee had entered into a settlement with its workmen under Section 18(1) of the Industrial Disputes Act. As per the settlement, lump sum payment was made to the workers. The assessee/respondent herein had filed return of income for the assessment year 2001-02 declaring a loss of Rs.44,37,666/-. The return was processed under Section 143(1)(a) of the Income Tax Act. Subsequently, the case was taken up for scrutiny and notices under Section 143(2) were issued on 29.10.2002 by the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d amount to concealment of income and initiated penalty proceedings under Section 271(1)(c) of the Income Tax Act. After issuing notice to the assessee under the aforesaid provision and hearing his objections thereto penalty order dated 30.07.2004 was passed by the Assessing Officer imposing penalty of Rs.12,63,048/-. 4. We may note at this stage that the assessee had accepted the assessment orders whereby deduction of aforesaid amount paid by the assessee to its workers was allowed under Section 35DDA of the Act. However, the assessee challenged the penalty order on the ground that the requirements of Section 271(1)(c) of the Act were not fulfilled and the penalty proceedings were illegally initiated by the Assessing Officer and conse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a host of other judgments which followed thereafter. Therefore, on any count, the penalty is not sustainable and hence we uphold the order of the CIT (Appeals) cancelling the same." 6. Reason given by the I.T.A.T. that in the assessment order, no satisfaction is recorded by the Assessing Officer as to concealment by the assessee and setting aside the order on that ground, relying upon the judgment in the case of Ram Commercial Enterprises 246 ITR 56, no more remains valid in view of legislative amendment in Section 271 by the Finance Act, 2008. By this amendment, sub-section 1(B) is inserted to Section 271 of the Income Tax Act retrospectively with effect from 1st April, 1989 as per which it is not necessary for the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial Disputes Act would cover only those employees who are 'workmen' within the meaning of Section 2(s) of the Industrial Disputes Act' and it would not include non workmen/other employees. Guided by these considerations, Voluntary Retirement Scheme is normally introduced with benevolent objective to give extra benefits to the employees who come forward and opt for such a scheme by taking much more benefits which otherwise may not be available to such employees under the law. Section 35 DDA of the Act covers such a situation. In the present case, what we find from the orders of the Assessing Officer as well as C.I.T. (Appeals) that assessee is engaged in the business of manufacturing of cement pipes and fittings, agricultural activities a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im was to be allowed under Section 37(1) of the Act or it was allowable under Section 35DDA of the Act. In such circumstances, even if the Assessing Officer ultimately held that claim could be allowed only under Section 35DDA, we are of the view that it was not a case where the assessee had concealed the income or had furnished inaccurate particulars. In fact as observed by the C.I.T.(Appeals) and as well as by I.T.A.T. complete disclosure was made by the assessee in this behalf. 9. We are, therefore, of the opinion that ingredients of Section 271(1)(c) of the Act are not satisfied in the present case and the findings arrived at by the two authorities below, which are concurrent, are findings of facts on this aspect. No substantial que ..... X X X X Extracts X X X X X X X X Extracts X X X X
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