TaxTMI 
TaxTMI 
TaxTMI 
2013 (2) TMI 744
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....-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARMA, A.M. For the Appellant : Shri Pankaj Shah and Shri G. J. Shah, CAs For the Respondent : Shri R. A. Verma, Sr. DR O R D E R PER R. C. SHARMA, A.M. This is an appeal filed by the assessee against the order passed by the CIT(A) dated 19th July, 2011, for the assessment year 2004-05, in the matter of imposition of penalty u/s 271(1)(c) of the Income-tax Act, 1961. 2. Rival contentions have been heard and records perused. In the instant case, the assessee is engaged in manufacturing of textile machinery from aluminium scrap. During the ....
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....9;ble Supreme Court in the case of Hero Vinod vs. Sheshamal, AIR 2006 S.C. 2234, wherein it was held that "substantially question of law involves a debatable legal issue." Our attention was also invited to various citations of judgments as contained at page 2 of synopsis in support of the proposition that this principle has been impliedly followed in these cases, where it is held that no penalty can be levied if issue is admitted by the Hon'ble High Court as it automatically becomes debatable. The ld. Authorized Representative further contended that no satisfaction has been recorded in the assessment order by the Assessing Officer, therefore, no penalty can be levied, in view of the decision of Indore Bench in the case of Sarita Agarwal....
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....ubmitted by ld. Authorized Representative that there was full and adequate disclosure by the assessee and no penalty is called for in such case. Precise contentions of Mr. Shah was as under :- a. Purchases and amount payable to parties was fully disclosed in profit and loss account and balance sheet and the same were audited u/s 44AB of the Act. b. Name, addresses and Bank account details of creditors were furnished to the Assessing Officer. Also all payments for purchases were made through account payee cheques. (Patna HC in the case of Addl CIT vs. Bahri Bros. P.Ltd.,(154 ITR 244) has held that the very fact that all the transactions were entered into between the parties through account payee cheque makes the question of identity....
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....ttam Tiwari ( 3 SCC 179) (Full Bench) S. C. "A question of law on which there is great divergence of judicial opinion will be substantial question of law."(Para 6)- Rimmalapudi S. Rao ( AIR 1951 Mad 969) (Mad H.C.). "if there is room for reasonable doubt or difference of opinion on the question, then it would be a substantial question of law." (Para 11) Rimmalapudi S. Rao ( AIR 1951 Mad 969) (Mad H.C.). In Sir Chunilal'a case, the Constitution Bench expressed agreement with the following view taken by a Full Bench of the Madras High Court in Rimmalapudi Subba Rao vs. Noony Veeraju (Sir Chunilal case, SCR p. 557) AIR 1951 Mad 969, (1951) - When a question of law is fairly arguable, where there is room for difference of opinion on it or wh....
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....ders of the authorities below and also deliberated on the judicial pronouncement cited by the ld. Authorized Representative during the course of hearing before us. I.T.A.T., Indore Bench in the case of Late Mohd.Anwar Khan vs. ITO, in I.T.A.No. 343/Ind/2011 have held as under :- "3. We are consistently taking the view that where substantial question of law has been accepted by the Hon'ble High Court, the issue becomes debatable, therefore, no penalty can be imposed for such addition. I.T.A.T. in its order passed in I.T.A.No. 329/Ind/2012 dated 29th January, 2013, in the case of Surendra Singh Thakur vs. ITO, for the assessment year 1996-97 has observed as under :- "8. It is clear from the order of the Hon'ble High Court that they ....
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....uch addition by appellate authorities." 9. Furthermore, Hon'ble Delhi High Court in the case of CIT vs. Liquid Investment Limited, I.T.A.No. 240/2009 vide its order dated 5.10.2010 has clearly held that where High Court has accepted substantial question of law u/s 260A, this itself shows that issue is debatable. Accordingly, no penalty was imposable u/s 271(1)(c) of the Income-tax Act, 1961. Hon'ble Supreme Court in the case of Santosh Hosiery, Civil Appeal No. 1117 of 20001 in its order dated 3rd February, 2001, ob served that " To be substantial, a question of law must be debatable." Hon'ble Supreme Court while deciding as to what is substantial question of law has held that same must be debatable. 10. In the instant case, t....