TaxTMI 
TaxTMI 
2019 (4) TMI 1115
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....ri Amit Katoch, Sr. DR ORDER PER ANADEE NATH MISSHRA, AM These are the appeals filed by the assessee against the orders each dated 22.11.2018 of Ld. Commissioner of Income Tax (Appeals)- 42, New Delhi ['CIT (A)' for short] in Appeal Nos. 765/Del/2019 (Assessment Year: 2001-02), 693/Del/2019 (Assessment Year: 2001-02), 757/Del/2019 (Assessment Year: 2008-09), 756/Del/2019 (Assessment Year: 2007-08), 755/Del/2019 (Assessment Year: 2006-07), 754/Del/2019 (Assessment Year: 2005-06), 692/Del/2019 (Assessment Year: 2004-05), 758/Del/2019 (Assessment Year: 2004-05). 1.1) Grounds of appeal in ITA No. 765/Del/2019 are as under: 1. That on the facts and 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. 76,34,170/- 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 Ld. CIT(A) erred in not adjudicating Ground 2.1 in the Form No. 35 filed by the Appellant before the Ld. CIT(A) wherein the Appellant challenged the action of the Ld. AO in levying Penalty of INR ....
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.... 9. 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. Grounds of appeal in ITA No. 693/Del/2019 are as under: 1. That on the facts and 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. 34,29,630/- 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 Ld. AO erred in passing the penalty order under Section 271(1)(c) of the Act which are wholly without jurisdiction and clearly barred by limitation inasmuch as the same have been passed beyond the period of limitation prescribed under Section 275(1)(a) of the Act. 3. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the initiation of penalty by way of issue of ....
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.... jurisdiction and clearly barred by limitation inasmuch as the same have been passed beyond the period of limitation prescribed under Section 275(1)(a) of the Act. 3. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the initiation of penalty by way of issue of penalty notice under Section 274 of the Act without specifying 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 AY 2011-12. 6. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the levy of penalty, ....
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....preciating 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 AY 2011-12. 6. 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 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 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, d....
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....n which penalty has now been levied. 8. 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. Grounds of appeal in ITA No. 754/Del/2019 are as under: 1. That on the facts and 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. 31,34,100/- 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 Ld. AO erred in passing the penalty order under Section 271 (1)(c) of the Act which are wholly without jurisdiction and clearly barred by limitation inasmuch as the same have been passed beyond the period of limitation prescribed under Section 275(1)(a) of the Act. 3. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding t....
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....(1)(c) of the Act which are wholly without jurisdiction and clearly barred by limitation inasmuch as the same have been passed beyond the period of limitation prescribed under Section 275(1)(a) of the Act. 3. That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not adjudicating Ground 2.1 in the Form No. 35 filed by the Appellant before the Ld. CIT(A) wherein the Appellant had challenged the action of the Ld. AO in levying penalty @300% (of INR 28,93,600) of the amount of tax sought to be evaded in computation of tax, while in the impugned order itself, the Ld. AO stated to levy penalty @ 100% (of INR 9,64,660) of the tax sought to be evaded. 4. That on the facts and circumstances of the case and in law, the CIT(A) erred in upholding the initiation of penalty by way of issue of penalty notice under Section 274 of the Act without specifying whether the penalty is initiated for concealment of income or for furnishing of inaccurate particulars of income. 5. 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 th....
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....pecifying 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 AY 2011-12. 6. 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 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 uphol....
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.... 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 prescribed to the assessee, the assessee has preferred an appeal in this Court under Section 260A of the Act which has also been admitted and substantial question of law framed. This itself shows that the issue is debatable. For these reasons, we are of the opinion that no question of law arises in the present case. This appeal is accordingly dismissed." 2.1) Ld. Counsel for assessee further drew our attention to the order of ITAT, Delhi Benches, Delhi in the case of GE Energy Parts Inc. and others vs. DCIT in which the aforesaid order of Hon'ble Delhi High Court in the case of Liquid Investment and Trading Company (supra) was considered and on identical facts, the penalty levied u/s 271(1)(c) of IT Act was deleted. Thus, he submitted that in the present appeals the issue regarding penalty u/s 271(1)(c) of IT Act is squarely covered in favour of the assessee by aforesaid orders of Hon'ble Delhi High Court and ITAT, Delhi Benches in the cases of Liquid Investment and Trading Company (supra) and GE Energy Parts Inc. respectively. ....
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....l. 3) We have heard both sides attentively. We have perused materials on record carefully. We have considered the judicial precedents brought to our notice by the two sides. We are aware of an earlier decision of Coordinate Bench of ITAT, Delhi in the case of ACIT vs. Moradabad Toll Road Co. Ltd. in [2016] 68 Taxmann.com 411 (Delhi Trib.) / [2015] 42 ITR (T) 280 (Delhi Trib.) in which also the aforesaid case of Liquid Investment and Trading Company (supra) was considered and relying on the same it was held that no penalty u/s 271(1)(c) of IT Act could be imposed on debatable issue. To quote from this order it was held by ITAT, Delhi in the case of ACIT vs. Moradabad Toll Road Co. Ltd. (supra): "6. ... ... where the assessee has preferred an appeal u/s 260A of IT Act which has also been admitted and substantial question of law framed, this difference shows that the issue is debatable. In our considered view no penalty u/s 271(1)(c) of IT Act could be imposed on a debatable issue." 4) The reliance placed by the Ld. DR on PCIT vs. M/s Shree Gopal Housing and Plantation Corporation (supra) does not help the case of Revenue because even in that case also, the Hon'ble B....