TaxTMI 
TaxTMI 
2020 (12) TMI 1082
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.... been deleted. 2. Since both the present appeals arise out of a common impugned order and raise identical questions of law, the same are being decided vide this common order. 3. Briefly stated, the facts of the present case are that the assessing officer had passed the assessment under Section 153A read with Section 143(3) of the Act, which was challenged by the respondent-assessee before the appellate authorities and ultimately an appeal being ITA No. 948/2016 was filed before this Court wherein, vide order dated 18th July, 2017, the appeal of the assessee was admitted for assessment year 2004-05. The relevant portion of the order dated 18th July, 2017 is reproduced hereinbelow:- "1. Admit. 2. Having heard learned counsel for the parties, the following questions are framed for determination: "(i) Did the ITAT err in confirming the order passed under Section 153A of the Income Tax Act, 1961 for AY 2004-05 and was there any incriminating material qua the appellant/ Assessee justifying the said assessment? (ii) Was the ITAT correct in law in upholding the addition of Rs. 6,27,02,640/- to the returned income on an estimation of profits upholdi....
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.... of any incriminating material, (2) on merits of the addition of gross profit and investment initially allegedly made. Therefore, for assessment year 2004-05 it is apparent that Hon'ble high court has admitted the appeal of the assessee on legal grounds as well as on the merits of the case. Similarly for assessment year 2005-06 the Hon'ble High Court has admitted the appeal of the assessee on the ground that whether the coordinate bench is correct in confirming the additions made by the Ld. assessing officer by rejecting the books of accounts under section 145 (3) of the act or not. Hence it is apparent that appeal of the assessee has been admitted on the issue of invocation of the provisions of section 145 (3) as well as on the merits of the addition. Therefore, it is apparent that for both the assessment years the Hon'ble High Court has admitted the appeal of the assessee on merits as well as on legal grounds. The Hon'ble Bombay High Court in case of CIT Vs. Advaita Estate Development Private Limited in ITA No. 1498 of 2014 dated 17/2/2017 has dealt with the issue that when the Hon'ble high court admits the appeal of the assessee whether on such additions/disallow....
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....in Nayan Builders and Developers Pvt. Ltd (supra) had deleted the penalty only on the ground that as substantial question of law had been admitted by this Court in quantum proceedings the issue is debatable. It was on the basis of the aforesaid reasoning of the Tribunal in Nayan Builders and Developers Pvt. Ltd. (supra), that this Court held that no penalty is imposable. Thus the distinction sought to be made by Mr. Tejveer Singh does not assist the Revenue, as it does not exist. 8. In view of the decision taken by this Court in Nayan Builders and Developers Pvt. Ltd (supra) as well as in Aditya Birla Power Co. Ltd. (supra) the proposed question does not give rise to any substantial question of law. Thus not entertained." 11. The Hon'ble Delhi High Court in CIT versus liquid investments limited in ITA No. 240/2009 is also held that when the assessee has preferred an appeal under Section 260A of the act which has also been admitted as substantial question of law, this itself shows that the issue is debatable and for this reason the penalty under section 271(1)(c) is not leviable. The same view was reiterated by the Hon'ble Delhi High Court in case of CIT Vs....
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....ch the Hon'ble Supreme Court has dismissed the special leave petition of the revenue in 73 Taxmann.com 248, we also hold that when in the show cause notice the Ld. assessing officer has failed to create a specific charge and which has also not been specified in the assessment order the penalty cannot be levied under section 271(1)(c) of the act. The Ld. departmental representative could not show us any other contrary decision on this issue. In the result on this ground also the penalty deserves to be cancelled. 13. As we have already cancelled the penalty orders on two different submissions of the assessee, we do not deal with other issues raised as now they are purely academic in nature. 14. In view of the above facts, we direct the Ld. assessing officer to delete the penalty under section 271(1)(c) of the act for both the assessment years and reverse the finding of the Ld. CIT (A). In the result appeal of the assessee for both the years are allowed." 8. Mr. Deepak Anand, learned standing counsel for the appellant states that the ITAT has erred in deleting the penalty without appreciating the fact that the additions made by the assessing officer had been c....