IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.139 of 1986 Date of decision: 16.12.2008 The CIT, Jalandhar -----Applicant Vs. M/s Bhai Shamsher Singh and sons, Mukatsar --Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE L.N.MITTAL Present: Ms. Savita Saxena, Standing Counsel for the revenue. Mr. Rohit Sud, Advocate for the assessee. Adarsh Kumar Goel,J. On 16.10.2008, following order was passed:- “The Income Tax Appellate Tribunal, Amritsar Bench has referred following question of law under Section 256(1) of the Income Tax Act for opinion of this Court:- ‘Whether on the facts and in the circumstances of the case, the ITAT is right in law in confirming the order of CIT(A) who cancelled penalty of Rs.23000/- ITR No.139 of 1986 imposed under section 271(1) (c) specially when the assessment itself is pending adjudication on reference under section 256 (1) filed by the revenue?” Counsel for the parties state that in the same assessment year, another reference was made in respect of the assessee being ITR No.16 of 1985, which has been decided by this Court on 20.3.1989. The Assessing Officer during the course of assessment, initiated penalty proceedings. Before the Tribunal, there was difference of opinion between two members and based on opinion of majority, proceedings were held to be barred by limitation. Question referred to this Court, inter alia, was whether the order of the Tribunal was based on opinion of majority. This Court held that since the Judicial Member has left the question of limitation undecided, the question to be decided by the third member was whether the question of limitation was required to be decided or not. The matter was remitted back to the Tribunal. 2 ITR No.139 of 1986 In view of above, it would be appropriate that decision of the Tribunal on remand is ascertained and decision on this reference would be necessary only if in quantum proceedings, the decision is against the assessee. Adjourned to 22.10.2008.” Learned counsel for the parties state that in quantum proceedings, decision was against the assessee and thus, the question whether imposition of penalty should be upheld, will have to be decided by the Tribunal on merits. Accordingly, we remand the matter to the Tribunal for a fresh decision on the issue of imposition of penalty. The reference is disposed of. (Adarsh Kumar Goel) Judge December 16, 2008 (L.N.Mittal) ‘gs’ Judge 3