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2023 (8) TMI 293 - HC - Income TaxPenalty u/s 271(1)(c) - addition on account of the ALV of vacant commercial/self-occupied assets - Assessee argument was that since it was a debatable issue, and, hence, the plausible view, penalty could not have been levied u/s 271(1)(c) - tribunal sustained the view taken by the CIT(A) that penalty ought not to be imposed - HELD THAT - It is not in dispute that the penalty notice did not indicate, clearly, as to which limb of Section 271(1)(c) was triggered for initiation of penalty proceedings against the respondent/assessee. It is possible, in a given case, that both limbs are attracted; however, even that aspect was not made clear in the notice issued by the AO u/s 271(1)(c) of the Act. See Pr Commissioner of Income Tax-3 v Ms. Minu Bakshi 2022 (7) TMI 1307 - DELHI HIGH COURT . We are also aligned to the view that the issue involved was debatable at the relevant point in time, which took a different turn only when this court delivered its judgment in Ansal Housing Finance Leasing Co. Ltd. 2012 (11) TMI 323 - DELHI HIGH COURT Decided in favour of assessee.
Issues Involved:
1. Condonation of delay in re-filing the appeal. 2. Challenge to the order of the Income Tax Appellate Tribunal regarding penalty imposition under Section 271(1)(c) of the Income Tax Act, 1961. Condonation of Delay in Re-filing the Appeal: An application was filed seeking condonation of a 320-day delay in re-filing the appeal by the appellant/revenue. The respondent/assessee had no objection to the delay being condoned. The court allowed the application and disposed of it accordingly. Challenge to Penalty Imposition Order: The appeal in question pertained to the Assessment Year 2011-12. The appellant/revenue contested the order passed by the Income Tax Appellate Tribunal regarding the deletion of a penalty amounting to Rs. 1,71,40,000 imposed under Section 271(1)(c) of the Income Tax Act, 1961. The appellant had previously challenged the order of the Commissioner of Income Tax (Appeals) dated 16.05.2017. The respondent/assessee initially declared income in the Return of Income (ROI) as Rs. 1,20,19,74,162, later revised to Rs. 1,19,91,36,679. Following scrutiny assessment, the income was assessed at Rs. 1,25,87,20,383, with additions made for ALV and disallowance of amortized cost of land concerning wind power projects. The CIT(A) directed the deletion of the addition related to land cost but upheld the ALV addition. Subsequently, penalty proceedings were initiated against the respondent/assessee without specifying the grounds. The penalty order of Rs. 1,71,40,000 was imposed, leading to an appeal to the CIT(A) and then to the Tribunal. The Tribunal and CIT(A) both agreed that the issue was debatable, and the penalty notice lacked clarity on the grounds for penalty imposition. The appellant/revenue argued against this view, but the court upheld the decisions, dismissing the appeal as no substantial question of law arose for consideration. Separate Judgement: No separate judgment was delivered by the judges in this case.
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