2017 (9) TMI 745 - HC - Income Tax

Court condones appeal delay, upholds penalty deletion under Income Tax Act. Dismissal due to lack of substantial legal questions.

The court condoned the delay in filing appeals in ITA No. 595/2017 and ITA No. 725/2017. In relation to the penalty under Section 271(1)(c) of the Income ... Penalty under Section 271(1)(c) - whether advance against depreciation (AAD) can be taxed under Section 28(1)? - Held that:- Assessee did not press its appeal before the ITAT. The issue was in fact decided in favour of a similarly placed party by the Supreme Court in its decision in National Hydroelectric Power Corpn. Ltd. v. Commissioner of Income Tax [2010 (1) TMI 281 - SUPREME COURT]. This was obviously a debatable issue that did not warrant penalty. Recovery of transmission charges - ITAT noticed adequate disclosure had been made by the Assessee in Note Nos. 14(D) and 17 of the audited accounts of the Assessee. Therefore, there was no failure on the part of the Assessee to make a complete disclosure. In the facts and circumstances, the impugned order of the ITAT deleting the penalty under Section 271 (1) (c) of the Act, cannot be said to be erroneous. Issues:1. Delay in filing appeals in ITA No. 595/2017 and ITA No. 725/20172. Penalty under Section 271(1)(c) of the Income Tax Act, 1961 for AY 2005-06 and AY 2006-07Delay in Filing Appeals:The judgment addresses the delay in filing appeals in ITA No. 595/2017 and ITA No. 725/2017. The court, for reasons stated in the applications, condones the delay in filing these appeals, disposing of the applications accordingly.Penalty under Section 271(1)(c) of the Income Tax Act:The appeals concern the penalty under Section 271(1)(c) of the Income Tax Act, 1961 for AY 2005-06 and AY 2006-07. The issues discussed in the quantum proceedings were the disallowance of advance against depreciation (AAD) for AY 2006-07 and the recovery of transmission charges for AY 2005-06.The ITAT noted that the Assessee did not press its appeal on the AAD issue, which was decided in favor of a similarly placed party by the Supreme Court. The ITAT found this to be a debatable issue that did not warrant a penalty under Section 271(1)(c) of the Act.Regarding the recovery of transmission charges, the ITAT observed that the Assessee had made adequate disclosure in the audited accounts, indicating no failure on the Assessee's part to disclose relevant information. Consequently, the ITAT's decision to delete the penalty under Section 271(1)(c) of the Act was upheld, with the court finding no substantial question of law arising. As a result, the appeals were dismissed.This summary provides a detailed analysis of the judgment, covering the issues of delay in filing appeals and the penalty under Section 271(1)(c) of the Income Tax Act for the relevant assessment years.