TaxTMI 
TaxTMI 
2019 (4) TMI 1115
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....EE 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 76,34,170/- @100% of the alleged tax on assessed income, with....
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....enalty 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 penalty notice under Section 274 of the Act without specifying whether the penalty is initiated for concealment of income or for furn....
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....ts 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, 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 ....
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....rred 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, do not tantamount to concealment of income or furnishing of inaccurate particulars of income. Grounds of appeal in ITA No. 755/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 confirmi....
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....ent 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 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 in....
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....llenged 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 the Appellant made complete disclosure in the notes accompanying the return of income. 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 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. 7. That on the facts and circumstances....
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....vy 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 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, therefor....
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....sessee 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. He further assailed the penalty u/s 271(1)(c) of IT Act by the AO on the ground that it was barred by limitation. In support of this, he filed information collected under Right to Information Act, regarding date of service of order of ITAT in quantum appeals; on Income Tax Department. Moreover, the Ld Counsel for the assessee also submitted that the penalty levied u/s 271(1)(c) of IT Act contending that the penalty levied u/s 271(1)(c) of IT Act deserves to be deleted also for the fact that in the notices u/s 271(1)(c) of IT Act t....
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....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 Bombay High Court has held: "5. In fact, the admission of an appeal in quantum proceedings, if arising on a pure interpretation of law or on a claim for deduction in respect of which full disclosure has been made, may, five rise to a possible view, that admission of appeal in the quantum proceedings would suggest no penalty can be imposed as it is a debatable issue." 4.1) It was in the context of a situation in which Tribunal's order in quantum proceedings was perverse, that the Hon'ble High Court held: "It cannot be a universal rule that once an appeal from the....