Court Allows Delay in Appeal Re-filing; Dismisses Revenue Challenge on Rs. 1.71 Crore Penalty Due to Unclear Notice.

The HC allowed the condonation of a 320-day delay in re-filing the appeal, as the respondent/assessee had no objection. The appellant/revenue's challenge against the ITAT's order deleting a penalty of Rs. 1,71,40,000 under Section 271(1)(c) of the Income Tax Act, 1961, was dismissed. The court found no substantial question of law, as both the ITAT and CIT(A) agreed the penalty notice was unclear and the issue debatable. No separate judgment was issued.

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Issues Involved:
1. Condonation of delay in re-filing the appeal.
2. Challenge to the order of the Income Tax Appellate Tribunal regarding penalty imposition under Section 271(1)(c) of the Income Tax Act, 1961.

Condonation of Delay in Re-filing the Appeal:
An application was filed seeking condonation of a 320-day delay in re-filing the appeal by the appellant/revenue. The respondent/assessee had no objection to the delay being condoned. The court allowed the application and disposed of it accordingly.

Challenge to Penalty Imposition Order:
The appeal in question pertained to the Assessment Year 2011-12. The appellant/revenue contested the order passed by the Income Tax Appellate Tribunal regarding the deletion of a penalty amounting to Rs. 1,71,40,000 imposed under Section 271(1)(c) of the Income Tax Act, 1961. The appellant had previously challenged the order of the Commissioner of Income Tax (Appeals) dated 16.05.2017.

The respondent/assessee initially declared income in the Return of Income (ROI) as Rs. 1,20,19,74,162, later revised to Rs. 1,19,91,36,679. Following scrutiny assessment, the income was assessed at Rs. 1,25,87,20,383, with additions made for ALV and disallowance of amortized cost of land concerning wind power projects.

The CIT(A) directed the deletion of the addition related to land cost but upheld the ALV addition. Subsequently, penalty proceedings were initiated against the respondent/assessee without specifying the grounds. The penalty order of Rs. 1,71,40,000 was imposed, leading to an appeal to the CIT(A) and then to the Tribunal.

The Tribunal and CIT(A) both agreed that the issue was debatable, and the penalty notice lacked clarity on the grounds for penalty imposition. The appellant/revenue argued against this view, but the court upheld the decisions, dismissing the appeal as no substantial question of law arose for consideration.

Separate Judgement:
No separate judgment was delivered by the judges in this case.

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