2017 (3) TMI 269 - HC - Income Tax

Tribunal's Penalty Deletion Upheld for AY 2006-07

The Commissioner of Income Tax-21 Versus M/s. Advaita Estate Development Pvt. Ltd.

The High Court upheld the Tribunal's decision to delete the penalty under section 271(1)(c) for Assessment year 2006-07. The Court considered the ... Penalty u/s 271(1)(c) - Held that:- Tribunal in Nayan Builders and Developers Pvt. Ltd [2011 (3) TMI 46 - ITAT MUMBAI] had deleted the penalty only on the ground that as substantial question of law had been admitted by this Court in quantum proceedings the issue is debatable. - Decided in favour of assessee. Issues:- Challenge to the deletion of penalty under section 271(1)(c) by the Tribunal for Assessment year 2006-07.Analysis:1. The Revenue challenged the impugned order of the Tribunal which deleted the penalty imposed under section 271(1)(c) for the respondent-assessee. The Tribunal's decision was based on the appeal admitted by the High Court on substantial questions of law regarding the addition of a certain amount under Section 68 of the Act. The Tribunal relied on previous decisions to hold that the admission of an appeal in quantum proceedings signifies a debatable issue, not warranting any penalty.2. The Revenue's argument was that the Tribunal's decision in a previous case was distinguishable as the High Court had specifically mentioned that no case was made out for the imposition of a penalty. However, the respondent's counsel pointed out that the Tribunal's decision to delete the penalty in the previous case was solely based on the issue being debatable, as indicated by the admission of the appeal on substantial questions of law.3. The Court referred to its previous judgments in similar cases, including Nayan Builders and Developers Pvt. Ltd., where it was held that the admission of an appeal in quantum proceedings was proof of a debatable issue, thus justifying the deletion of the penalty. The Court concluded that the proposed question did not raise any substantial question of law and dismissed the appeal, upholding the Tribunal's decision to delete the penalty.4. Therefore, based on the precedents and the rationale behind the Tribunal's decision, the High Court dismissed the appeal by the Revenue challenging the deletion of the penalty under section 271(1)(c) for the Assessment year 2006-07, with no order as to costs.