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2017 (1) TMI 1372 - ITAT DELHIPenalty under section 271 (1) (c ) - Deduction u/s 80P (2)(a) (i) - Whether the assessee is eligible for deduction under section 80 P (2) (D) relating to income derived from investment in other cooperative societies? - Availability of deduction of expenses under section 57 regarding income from other sources - Held that:- It is a case where penalty has been levied by the assessing officer on a issue in respect of which Hon’ble Delhi High Court in assessee’s own case for the relevant assessment year under consideration had sent back the issue for re-adjudication before Ld. CIT (A), by framing specific question of law in respect of the deduction claimed by the assessee. When the Hon’ble High Court has framed substantial question of law, it becomes apparent that the addition is certainly debatable. The framing of a substantial question of law by Hon’ble High Court lends credence to the bona fides of the assessee in claiming deduction. Once it turns out that the claim of assessee could have been considered for deduction as per instructions, which is not completely debarred at all, the mere fact of confirmation of the disallowance of deduction would not per se lead to imposition of penalty. Since the addition in respect of which penalty has been levied by the authorities below has been held by the Hon’ble High Court to be involving a substantial question of law, in our considered opinion, penalty is not exigible under this section. We therefore are inclined to delete the penalty. - Decided in favour of assessee
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