TMI Blog2021 (2) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... alty proceedings cannot lie. There is no finding that any details supplied by the Assessee in its return were found to be incorrect, erroneous or false. In fact, as noted in the impugned order dated 26th December, 2017, CIT(A) has categorically observed that no evidence had been brought on record to adduce that furnishing of inaccurate details had been done by the Assessee wilfully, in order to avoid the payments of tax, or to conceal the particulars of income. Dealing with a similar issue, the Supreme Court in Commissioner of Income Tax, Ahmedabad Vs. Reliance Petroproducts Pvt. Ltd. [ 2010 (3) TMI 80 - SUPREME COURT] wherein held merely because the Assessee had claimed the expenditure, which claim was not accepted or was not acceptabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tha was not incidental to the objects of the trust and invoked the provisions of section 11(4A) of the Act, and denied the benefit of exemption. The Assessee succeeded in Appeal before the CIT(A), and also in appeal filed by the revenue before ITAT, wherein the order of CIT(A) was affirmed. However, in further appeal preferred by the Revenue under section 260A of the Act, this court vide order dated 20th November, 2012, set aside the orders of the ITAT and confirmed the stand of the AO in the following words:- We hold that the Assessee trust is not eligible for exemption because the Katha business was itself not held under trust, it would produce and anomalous or discriminatory result inasmuch as all that is required is for the settler ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that in subsequent decision of this Court, the earlier order relied upon by the Revenue has been disturbed as the matter has been restored to the file of AO to examine the aspect of allowability of expenditure and depreciation in accordance with law. He submits that the issue is debatable and further in view of the facts noted above it cannot be held that incorrect particulars have been given by the Assessee. 8. We have considered the rival contentions of the parties. It is clear that the penalty proceedings are arising as an outcome of the assessment proceedings, which is still being debated upon. If the issue is debatable, penalty proceedings cannot lie. Law on this subject is well settled and this court, as recently as on 22nd Dece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was debatable. The relevant portion of the orders in CIT Vs. Liquid Investment Ltd. (supra) and CIT Vs. Thomson Press India Ltd. (supra) is reproduced hereinbelow:- A) Order dated 5th October, 2010 passed by this Court in CIT Vs. Liquid Investment Ltd. (supra) :- Both the CIT(A) as well as the ITAT have set aside the penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 on the ground that the issue of deduction under Section 14A of the Act was a debatable issue. We may also note that against the quantum assessment where under deduction under Section 14A of the Act was prescribed to the Assessee, the Assessee has preferred an appeal in this Court under Section 260A of the Act which has als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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