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2019 (5) TMI 1316 - AT - Income TaxPenalty u/s. 271(1)(c) - denial of exemption under s.11 & 12 - difference of opinion regarding applicability of proviso to section 2(15) r.w.s. 13(8) of the Act in respect of such cricket bodies and consequently the action of the assessee is to be regarded as bonafide - whether penalty action can be taken against the assessee while fastening liability to tax as a result of any retrospective amendment in law especially when the assessee could not foresee such law at the time of filing of return of income? - HELD THAT:- Coordinate Bench in a detailed and voluminous order in Gujarat Cricket Association [2019 (1) TMI 1522 - ITAT AHMEDABAD] after taking note of several judicial decisions holding the field in this regard came to the conclusion that proviso to section 2(15) has been wrongly invoked against such cricket bodies. Thus, where the issue towards applicability of proviso to section 2(15) which seeks to restrict and exclude the exemption under s.11 & 12 itself has been approved in favour of assessee, one cannot say that the issue is free from doubt, to say the least. A question arises as to whether an assessee can be imputed with clairvoyance where some amendment has been brought with retrospective effect whereby tax liability is sought to be imposed on assessee. In the instant case, section 13(8) of the Act has been enacted by Finance Act, 2012 with retrospective effect from 01/04/2009. As per aforesaid enactment, benefit of section 11 & 12 will not be available to the assessee where such assessee is in receipt of income which falls under proviso to clause (15) of section 2 of the Act. Admittedly, the aforesaid amendment seeking to deny benefit of s.11 to the assessee was not in existence at the time of filing of return of income. The action of the AO fails on both counts, namely; (i) the penalty is rightly held to be not applicable where the issue involved is so complex and debatable and the assessee had adopted a view which is quite plausible and endorsed favourably by judicial precedents at many instances. (ii) The income arising on retrospective applicability of section 13(8) inserted by Finance Act, 2012 i.e. at a time when the returns for all the assessment years in question were already filed by assessee cannot attract penalty by any stretch of imagination. We thus, find no infirmity in the action of the CIT(A) in deleting the penalty in all the three appeals of the Revenue.
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