AI Drafter 
TaxTMI 
TaxTMI 
2016 (4) TMI 810
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....-2(2), Mumbai u/s. 271(1)(c) of the Act vide his order dated 31.01.2013. 2. The only issue in this appeal of the assessee is against the order of CIT(A) confirming the levy of penalty by the A.O. u/s. 271(1)(c) of the Act. The assessee has raised following three grounds: '1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming penalty of Rs. 64.82.653/- u/s 271(1)(c) of the Act levied by the Assessing Officer. The learned CIT(A) ought to have accepted the contention of the Appellant that it had neither furnished inaccurate particulars of its income nor concealed its income and that, at the highest, the subject matter of rejection of claim was a case of a debatable issue on which two v....
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....e assessee also relied upon the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Indusind Bank Ltd. in Income Tax Appeal No. 1293 of 2012 wherein the Hon'ble High Court has accepted the proposition that wherever substantial question of law is admitted, the Tribunal was right in deleting the penalty levied by AO on disallowance of depreciation on lease transactions. The Hon'ble High Court, vide order dated 24.09.2014 held as under: - "2] With their assistance, we have gone through the concurrent findings on the point of deletion of penalty. In para 5.2 of the order of the Commissioner of Income Tax (Appeals), it has been held that there is disallowance of depreciation made by the Assessing Officer in the assess....
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....on lease transaction as the only substantial question of law. For all these reasons, we do not find that the Tribunal's order is either perverse or vitiated by any error of law apparent on the face of the record. There is no merit in the Appeal. It is, accordingly, dismissed. No costs." Similarly, the Hon'ble Delhi High Court in CIT vs. Liquid Investment and Trading Co. in ITA No. 240 of 2009 dated 04.10.2010 has laid down a similar proposition by observing as under: - "Both the CIT(A) as well as the ITAT have set aside the penalty imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 on the ground that the issue of deduction under section 14A of the Act was a datable issue. We may also note that....
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....dismissed the appeal at the admission stage, albeit after admitting the same, it cannot be said that the issue was debatable." He also relied on the decision of Hon'ble Gujarat High Court in the case of Dharamshi B. Shah 51 Taxmann.com 274 wherein it was held that the penalty u/s. 271(1)(c) of the Act cannot be deleted on the sole ground of admission of assessee's appeal and framing of substantial question of law by the Hon'ble High Court. Hon'ble High Court held as under: "8. Identical question came to be considered by the Division Bench of this Court in Tax Appeal No.606/23010 and in paragraph 10 to 13 the Division Bench of this Court has observed as under and has quashed and set aside the order of the tribunal delet....
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.... if there are independent grounds and reasons to believe that the assessee's case would fall under the mischief envisaged in the Clause (c) of Sub-Section (1) of Section 271 of the Act. In other words, unless there is any indication in the order of admission passed by the High Court simply because the Tax Appeal is admitted, would give rise to the presumption that the issue is debatable and that therefore, penalty should be deleted. 12. This is not to suggest that no such intention can be gathered from the order of Court even if so expressed either explicitly or in implied terms. This is also not to suggest that in no case, admission of a Tax Appeal would be a relevant factor for the purpose of deciding validity of a penalty order. T....