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TMI Blog2015 (3) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... n the substantial questions of law as have been quoted above, would make it apparent that the additions made were debatable. The Tribunal has thus rightly held that the admission of substantial questions of law by the High Court leads credence to the bona fide of the assessee and therefore, the penalty is not exigible under Section 271(1)(c) of the Act. Merely because the claim of the assessee has been rejected by the revenue authorities would not make the assessee liable for penalty. The Apex Court in Reliance Petroproducts ( 2010 (3) TMI 80 - SUPREME COURT ) also held that "merely because the assessee had claimed the expenditure, which claim was not acceptable to the revenue, that by itself would not, in our opinion, attract the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as another sum of ₹ 26,00,000/- was disallowed under Section 68 of the Act, and also the interest given on the loans was disallowed (totaling amount to ₹ 33,90,940/-). The disallowance was confirmed on merits by the Commissioner of Income Tax (Appeals). The appeal of the assessee before the Tribunal was also dismissed. The assessee then filed an appeal before the High Court, which has been admitted on 04.06.2012 (being ITA No.282/2011) on the following substantial questions of law: (A) Whether on the facts and circumstances of the case, the Hon ble Tribunal was right in law in upholding the action of the Learned Respondent under section 147 when the mandatory conditions for exercise of such powers did not exist and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.2006 against the respondent-assessee under Section 271(1)(c) of the Act. Vide order dated 25.10.2011 penalty of ₹ 13,42,000/- was levied for concealment of income. The appeal filed by the assessee challenging the order of penalty was allowed by the Commissioner of Income Tax (Appeals). Challenging the said order, the Revenue filed an appeal before the ITAT which has also been dismissed by order dated 14.02.2014. Aggrieved by the said orders, this appeal has been filed wherein a prayer has been made in deciding the following questions of law: 1. Whether on the facts and circumstances of the case, the Tribunal is right in law in holding that the issues are debatable is correct and the penalty under Section 271(1)(c) is not exigible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as per a person properly instructed in law and is not completely debarred at all, the mere fact of confirmation of disallowance would not per se lead to the imposition of penalty. 8. The assessee in the present case had disclosed all the materials on which it was claiming deduction. The matter as to whether the deduction was to be given or not, was taken up by the revenue authorities and it was held that certain deductions claimed by the assessee were to be disallowed. It is not disputed that the questions regarding the disallowance of the deductions claimed by the assessee is under consideration by the High Court, as the appeal filed by the assessee has been admitted, on the substantial questions of law which have been reproduced her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be given to the assessee has yet not been finalized, as on those very questions, the appeal filed by the assessee has been admitted by the High Court and the said questions are thus yet to be finally answered. In the aforesaid circumstances, there would always be a doubt in the mind of the assessee with regard to the correctness of the disallowance claimed by it. 13. Penalty can be imposed under Section 271(1)(c) of the Act for concealment of particulars of income or furnishing inaccurate particulars of such income. The extract of the relevant provisions of Section 271(1)(c) of the Act is reproduced below: 271(1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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