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Principal Commissioner of Income Tax-2, Mumbai Versus M/s. Shree Gopal Housing & Plantation Corporation, Mumbai

2018 (2) TMI 604 - BOMBAY HIGH COURT

Penalty 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 o .....

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ntum 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 th .....

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e Tax Act, 1961 (the Act) challenges the order dated 10th February, 2015 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order is in respect of Assessment Year 2006-07. 2. The Revenue has urged the following questions of law for our consideration : (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied u/s 271(1)(c) by the Assessing Officer, on addition as endorsed by the CIT(A), that the amount .....

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e of plots? (iii) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the penalty levied u/s 271(1)(c) by the Assessing Officer, on addition as endorsed by the CIT(A), that the amount of ₹ 1 crore was the assessee's undisclosed income, without appreciating that by doing so that the Tribunal has contradicted ins own findings in the case of the partners, since in the case of the partners, the Tribunal has itself endorsed the disclo .....

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It is further pointed out that an appeal being Appeal No.136 of 2015 from the order dated 7th November, 2014 of the Tribunal in quantum proceedings has been admitted by this Court on 12th December, 2017. Therefore, no appeal against an order deleting penalty will lie to this Court in view of the fact that the admission of appeal in quantum proceedings by itself indicates that the question does give rise to a debatable issue. Therefore, no occasion to impose any penalty can arise. Consequently, n .....

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dmitted an appeal in quantum proceedings on substantial question of law, evidences that the issue is debatable. Thus, not warranting any penalty. 4. We find that the decision of this Court in Nayan Builders (supra) upholding the order of the Tribunal proceeded on the basis that no case was made out for imposition of penalty and the same was rightly set aside by the Tribunal. Further, the order of the Tribunal against which the above appeal in Nayan Builders (supra) was filed by the Revenue, clea .....

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f rule that in case where this Court admits an appeal relating to quantum proceedings ipso facto i.e. without anything more, the penalty order get vitiated. Thus, the question of entertaining an appeal from an order imposing / deleting penalty would have to be decided on a case to case basis. There can be no universal rule to the effect that no penalty, if quantum appeal is admitted on a substantial question of law. 5. In fact, the admission of an appeal in quantum proceedings, if arising on a p .....

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uld 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. 6. Regarding question no.(i) and (ii) : (a) In the present facts, we note that the impugned order of the Tribunal has deleted the penalty only because in the order dated 7th November, 2014 in the quantum proceedings t .....

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which could lead to the appeal on deletion of penalty not being entertained. (c) In the facts of this case, we are of the view the deletion of penalty whether justified or not would depend upon the result in the quantum appeal namely Income Tax Appeal No.536 of 2015, in which question nos. (i) and (ii) with regard to the quantum i.e. similar to question nos. (i) and (ii) herein in relation to penalty has been raised. (d) We, therefore, admit this appeal on substantial questions of law set out a .....

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