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2018 (2) TMI 604

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 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. .....

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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 of ₹ 1 crore was the assessee's undisclosed income, without appreciating the fact that its 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? (ii) 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 account of unaccounted cash receipts on sal .....

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o question of entertaining an appeal in respect of deletion of penalty can arise. In support, reliance was placed upon the decision of this Court in Commissioner of Income Tax Vs. M/s. Nayan Builders and Developers (Income Tax Appeal No.415 of 2012), decided on 8th July, 2014. Our attention was also invited to the order dated 18th March, 2011 of the Tribunal in the case of M/s. Nayan Builders and Developers (supra) where the Tribunal had deleted the penalty on the ground that as this Court has admitted 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 .....

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le issue. However, 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. 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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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. (c) Thus, we dismiss question no.(iii) in view of the fact that the above question was not admitted by us while admitting the Income Tax Appeal No.536 of 2015 in quantum proceedings. 8. Needless to state that 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 succe .....

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