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2014 (7) TMI 89 - HC - Income TaxPenalty u/s 271(1)(c) of the Act – Quantum additions - Whether the Tribunal is right in reversing the order passed by CIT(A) and deleting penalty levied u/s 271(1)(c) of the Act, in spite of the fact that the addition made in both the AYs were on the basis of seized documents establishing the fact of running an undisclosed business, taxing the income from which has been confirmed by the Appellate Tribunal – Held that:- The Tribunal erred in deleting the penalty - Admission of a Tax Appeal by the High Court, in majority cases, is exparte and without recording even prima facie reasons - Whether ex-parte or after by-parte hearing, unless some other intention clearly emerges from the order itself, admission of a Tax Appeal by the High Court only indicates the Court's opinion that the issue presented before it required further consideration - It is an indication of the opinion of the High Court that there is a prima facie case made out and questions are required to be decided after admission. Mere admission of an appeal by the High Court cannot without there being anything further, be an indication that the issue is debatable one so as to delete the penalty u/s 271(1)(c) of the Act even if there are independent grounds and reasons to believe that the assessee’s case would fall under the mischief envisaged in the Clause (c) of Sub-Section (1) of Section 271 of the Act - unless there is any indication in the order of admission passed by the High Court simply because the Tax Appeal is admitted, would give rise to the presumption that the issue is debatable and that therefore, penalty should be deleted - 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 – the order of the Tribunal is set aside and remitted back for fresh consideration – Decided in favour of Revenue.
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