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2015 (6) TMI 326 - HC - Income TaxPenalty under section 271(1)(c) - disallowances under section 40(a)(i) and income of Head Office / Branch Office - ITAT deleted penalty levy - Held that:- On the merits of the disallowances have not been accepted and the special Bench had to be constituted to resolve the legal issue. All this indicates that there were two views possible on the issue and before it was settled by a special Bench decision of the Tribunal. Thus, on a debatable point and legal issue, a penalty could not have been imposed and the ingredients of section 271(1)(c) of the Income Tax Act are not attracted in such cases. This is essentially a finding of fact and clearly emerging from the admitted position. In the circumstances, the Tribunal's direction to delete the penalty does not raise any substantial question of law. - Decided in favour of assessee.
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