TMI Blog2018 (10) TMI 1439X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 4,88,61,772/- u/s 36(i)(viia) and disallowance of the interest payment made by the assessee to its head office by following the special bench order in case of ABN AMBRO BANK vs. ADIT (2010 (12) TMI 340 - CALCUTTA HIGH COURT) is sustainable or not. So when the issue as to disallowances is still debatable no penalty can be levied and as such penalty imposed in this case is liable to be deleted on this score only. Even on merit when we examine the assessment order as well as penalty order, the revenue has not come up with any allegation that there is concealment of income or furnishing of inaccurate particulars of income rather simple allegation made by the revenue is that the assessee has claimed incorrect deduction u/s 36(i)(viia) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i [ Ld. CIT(A) ] erred in law and facts by sustaining the penalty imposed on the appellant vide order dated 30-3- 2009 passed under section 271(1)(c) of the Income tax Act, 1961 ( the Act ) for Assessment year 1996-97 without appreciating the facts that the penalty order is barred by limitation as per the proviso to Sec 275(1 )(A) of the Act. Hence, impugned order is void ab initio in the eyes of law and need to be struck down. 2. The Ld. CIT(A) has grossly erred in law by confirming the imposition of penalty of ₹ 20,39,73,947/- under section 271(1)(c) of the Act without giving any reasons for the same and in absence of any finding recorded by any authority of concealment of income or furnishing in-accurate particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that such approval is mandatory for passing any order for imposing penalty. As such approval does not appear to have been sought, hence the order passed by Ld. CIT(A) sustaining penalty is void ab initio and invalid in the eyes of law and hence should be quashed. 7. The Ld.CIT(A) is not justified in sustaining penalty u/s 274 read with 271 for concealment of income without assigning any reasons, without application of mind and purely on conjectures and surmises. 2. Briefly stated that facts necessary for adjudication of the controversy at hand are : Assessee is a non-resident banking company having branches in India which constitute a Permanent Establishment (PE) of the assessee within the meaning of Article 5 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to disallowance of ₹ 4,88,61,772/- out of deduction claimed by the assessee u/s 36(i)(viia) and disallowance of ₹ 32,20,00,000/- on account of interest paid to the head office made by the AO and confirmed by Ld. CIT(A) as well as the Tribunal is still debatable as the appeal is pending before Hon ble Delhi High Court. On the other hand, the Ld. DR for the revenue filed comprehensive submissions by relying upon decision rendered by Hon ble Supreme Court and Hon ble High Court of Delhi cited as : Southern Technologies (320 ITR 577), Reliance Petroproducts (P.) Ltd. 322 ITR 158 (SC), Jaswinder Singh Ahuja [2013] 351 ITR 262 (Delhi), Liquid Investment ITA no. 240/2009 dated 05.10.2010 Delhi (HC). Ld. DR further relied upon order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ..with the approval of the RBI and hence was exempt from tax in accordance with the provisions of section ..(15)(iv)(fa) of the Income Tax Act, 1961 and hence did not attract tax deduction at source provisions ? 7. Perusal of the aforesaid substantial questions of law framed by Hon ble High Court of Delhi in the appeal against the assessment order on the basis of which this penalty has been levied shows that it is still debatable if the disallowance of ₹ 4,88,61,772/- u/s 36(i)(viia) and disallowance of the interest payment made by the assessee to its head office by following the special bench order in case of ABN AMBRO BANK vs. ADIT343 ITR 81 (CAL) is sustainable or not. So when the issue as to disallowances is still d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave furnished inaccurate particulars of his income. The meaning of the word particulars used in section 271(1)(c) would embrace the detail of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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