TaxTMI 
TaxTMI 
2019 (3) TMI 69
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...., the same are being disposed of by way of composite order to avoid repetition of discussion. 2. The appellant, M/s. GE Energy Parts Inc. (hereinafter referred to as 'the assessee') by filing the present appeal, sought to set aside the impugned order dated 31.07.2018 passed by Ld. CIT (Appeals)-42, New Delhi qua the Assessment Year 2001-02 on the grounds inter alia that :- "1. That on the facts and in circumstances of the case and in law, the Commissioner of Income-tax (Appeals) ["CIT(A)"] erred in confirming the action of the Assessing Officer ("AO") in levying penalty of Rs. 24,93,590/- under Section 271(1)(c) of the Income tax Act, 1961 (the "Act"). 2. That on the facts and circumstances of the case and in law, the CIT(A) erred in u....
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....ich penalty has now been levied. 7. That on the facts and circumstances of the case and in law, the CIT(A) erred in confirming the levy of penalty under section 271(1)(c) of the Act on the basis of profits attributed to the alleged PE of the Appellant, which was based on estimation, and, therefore, do not tantamount to concealment of income or furnishing of inaccurate particulars of income." 3. The appellant, M/s. GE Wind Energy Gmbh (hereinafter referred to as 'the assessee') by filing the present appeal, sought to set aside the impugned order dated 22.11.2018 passed by Ld. CIT (Appeals)-42, New Delhi qua the Assessment Year 2006-07 on the grounds inter alia that :- "1. That on the facts and circumstances of the case and in law, the C....
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....aw, the CIT(A) erred in upholding the levy of penalty, without appreciating that the Hon'ble High Court having admitted the appeal of the Appellant for the same AY on a substantial question of law qua existence of a permanent establishment, the issue was prima facie debatable, on which no penalty could have been levied. 7. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the levy of penalty, without appreciating that penalty under Section 271 (1)( c) of the Act had been deleted in the case of Rolls Royce, which formed the bedrock and sole basis of the addition made by the AO, on which penalty has now been levied. 8. That on the facts and circumstances of the case and in law, the CIT(A) erred ....
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....whether the penalty is initiated for concealment of income or for furnishing of inaccurate particulars of income. 4. That on the facts and circumstances of the case and In law, the CIT(A) erred In alleging that the Appellant had concealed particulars of income, without appreciating that the Appellant made complete disclosure in the notes accompanying the return of income. 5. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the levy of penalty, without appreciating that on identical facts, penalty had been deleted by the predecessor of the CIT(A) in the case of GE Caledonian Ltd. and GE Aviation Service Operation LLP for the A Y 2011-12. 6. That on the facts and circumstances of the case and in ....
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....ice u/s 274 read with section 271(1)(c) of the Act. Declining the contentions raised by the assessee, AO proceeded to conclude that the assessee has not disclosed full material facts regarding the issue of Permanent Establishment (PE) in India attributable to the activities carried out from this PE and has thereby concealed the particulars of its income. Consequently, AO levied the penalty of Rs. 24,93,590/-, Rs. 20,85,545/-, Rs. 20,20,281/- & Rs. 59,52,684/- in AYs 2001-02, 2006-07, 2007-08 & 2008-09 respectively @ 100%. 6. Assessee carried the matter before the ld. CIT (A) by way of appeals who has confirmed the penalty levied by AO by dismissing the appeals. Feeling aggrieved, the assessee has come up before the Tribunal by way of fili....
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....ributing as high as 35% of the profits to the alleged marketing activities and thereafter, attributing 75% of such 35% profits to the alleged PE of the Appellant in India?" 9. From the order passed by Hon'ble High Court (supra), it has become clear that the question as to whether the assessee is having fixed place PE in India is "debatable one" and in these circumstances, penalty levied by the AO is not sustainable in the eyes of law. 10. In view of what has been discussed above, since substantial question of law has been framed by Hon'ble High Court on the issue if the assessee is having fixed place PE in India, which is the basis of levying/confirming the penalty u/s 271(1)(c) of the Act, the issue becomes debatable, hence penalty u/s 2....