2019 (3) TMI 1830

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....39;ble High Court in the case of Nayan Builders and Developers without appreciating the fact that the ITAT has confirmed penalty on similar facts in the case of Emblem Fashion Wear Exports Pvt. Ltd. vs. Income Tax Officer 4(1)(4), ITA No.2101/M/2012 holding that penalty is imposable as explanation offered by the assessee was both false and not bona fide and is guilty of a dishonest conduct ?" 2. The Respondent ­ Assessee is an individual. He has filed return of income tax for the Assessment Year 2006­2007. The assessment of his return gave rise to disallowance of exemption under Section 54F of the Income Tax Act, 1961 ('the Act', for short). The Assessee had transferred the tenancy rights in a premises for consideration o....

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....e order of the Tribunal deleting the penalty on the aforesaid ground and has remanded the matter to the Tribunal to consider the appeal afresh in accordance with law and on its own merits. "10. Having, thus, heard learned counsel for the parties, we reiterate that the sole ground on which the Tribunal deleted the penalty was that with respect to the quantum additions, the assessee had approached the High Court and the High Court had admitted the appeal framing substantial questions of law for consideration. In view of the Tribunal, this would indicate that the issue was debatable and that, therefore, no penalty under section 271(1)(c) could be imposed. 11. We are of the opinion that the Tribunal erred in deleting the penal....

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....of deciding validity of a penalty order. This is only to put the record straight in so far as the opinion that the Tribunal as expressed in the present impugned order, viz., that upon mere admission of a tax appeal on quantum additions, is an indication that the issue is debatable one and that, therefore, penalty should automatically be deleted without any further reasons or grounds emerging from the record. 13. This is precisely what has been done by the Tribunal in the present case. The order of the Tribunal, therefore, cannot be sustained. The question framed is answered in favour of the Revenue and against the assessee. The order of the Tribunal is reversed. Since apparently the assessee had raised other contentions also in sup....