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2019 (3) TMI 134 - AT - Income TaxPenalty u/s 271(1)(c) - assessee has not disclosed full material facts regarding the issue of Permanent Establishment (PE) in India attributable to the activities carried out from this PE and has thereby concealed the particulars of its income - HELD THAT:- Undisputedly, assessment orders framed by the AO have been upheld by the CIT (A) as well as by the Tribunal, who have held that GE Overseas entities have PEs in various forms and these are fixed place PE, Office PE, construction PE and agency PE and in case of oil and gas business, involves in installation and commissioning would also constitute construction PE and since the assessee has earned global profit of 10% on the sales made to the customer in India, the income chargeable to tax as attributable to the PE was computed at 3.5% of the sales made. The question as to whether the assessee is having fixed place PE in India is “debatable one” and in these circumstances, penalty levied by the AO is not sustainable in the eyes of law. Identical issue has been decided in favour of the assessee. Since substantial question of law has been framed by Hon’ble High Court on the issue if the assessee is having fixed place PE in India, which is the basis of levying/confirming the penalty u/s 271(1)(c) the issue becomes debatable, hence penalty u/s 271(1)(c) is not leviable. - Decided in favour of assessee.
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