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2018 (2) TMI 604 - HC - Income TaxPenalty u/s 271(1)(c) - undisclosed income - two partners had admitted such undisclosed income by filing revised computation of their income, declaring therein their share of the aforesaid amount as their undisclosed income? Held that:- It cannot be a universal rule that once an appeal from the order of the Tribunal has been admitted in the quantum proceedings, then, ipso facto the issue is a debatable issue warranting deletion of penalty by the Tribunal. There could be cases where the finding of the Tribunal in quantum proceedings deleting addition could be perverse, then, in such cases, the admission of appeal in quantum proceedings would indicate that an appeal against deletion of penalty on the above account will also warrant admission. In the penalty appeal, it would not be appropriate to widen the scope of controversy in the quantum appeal which after hearing the parties had not admitted it on this question as it was not insisted upon at the hearing of the appeal in the quantum proceedings. This appears to be so, as otherwise, we would have dealt with this question at that time as we are now dealing with it, as the Revenue insists on this question. Considerations for imposition of penalty are undoubtedly different from considerations which would come into play while deciding the appeal in quantum proceedings. In case, if the respondent assessee succeeds in the quantum proceedings, no occasion to impose penalty upon the assessee can arise. However, in case the Revenue succeeds in the quantum proceedings, then that by itself will not necessarily invite penalty. It would still be open to the respondent assessee to urge that in the facts and circumstances of the case, no penalty is imposable.
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