TMI Blog2014 (7) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue pointed out that tribunal has deleted penalty only on the ground that High Court having admitted assessee's appeal, issue can be stated to be debatable. Issue notice for final disposal, returnable on 26.7.2011. 3. In response to notice issued, learned counsel, Shri Soparkar appeared for the respondent assessee. We have heard the learned counsel appearing for both side. We propose to dispose of the Tax Appeal finally by this order for which purpose, above noted question is framed as substantial question of law for our determination. 4. As can be gathered from the question itself, the issue pertains to penalty under Section 271(1)(c) of the Income Tax Act,1961 ( the Act for short) imposed by the Assessing Officer and confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 23.11.2007 in ITA Nos.1076, 1077 and 1089/Ahd/1998 of the ITAT, the issue as to whether income from Minal Service station can be assessed in the hands of the assessee, becomes debatable. When two views, are possible, no penalty can be imposed is a principle that has been enunciated in the decision in the case of CIT v. P. K. Narayanan [1999] 238 ITR 905 and CIT Vs HMA Udyog P. Ltd., 211 CTR 543(Del). A plea or claim which is held by the Hon'ble High Court to give rise to a substantial question of law, cannot be treated to be frivolous or mala fide as to attract levy of penalty under Section 271(1)(c) of the Income Tax Act. 6. From the above portion of the order of the Tribunal, it can be seen that the sole ground on which the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, factum of the High Court admitting the quantum of appeal would be a relevant ground while examining the question of penalty. 10. Having, thus, heard learned counsel for the parties, we reiterate that the sole ground on which the Tribunal deleted the penalty was that with respect to the quantum additions, the assessee had approached the High Court and High Court had admitted the appeal framing substantial questions of law for consideration. In view of the Tribunal, this would indicate that the issue was debatable and that therefore, no penalty under Section 271(1)(c) could be imposed. 11. We are of the opinion that the Tribunal erred in deleting the penalty on this sole ground. Admission of a Tax Appeal by the High Court, in majori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the Tribunal as expressed in the present impugned order viz. that 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. 13. This is precisely what has been done by the Tribunal in the present case. Order of the Tribunal, therefore, cannot be sustained. Question framed is answered in favour of the Revenue and against the assessee. Order of the Tribunal is reversed. Since apparently the assessee had raised other contentions also in support of the appeal before the Tribunal, the proceedings are remanded before the Tribunal for fresh consideration and dispos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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