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TMI Blog2019 (5) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty proceedings u/s 271 (1)( c) may be initiated separately. Therefore, there is no specific charge in the assessment order with respect to the satisfaction about the fault committed by the assessee. The quantum appeals have been admitted by the honourable Delhi High Court [ 2013 (8) TMI 1108 - DELHI HIGH COURT] , therefore even if the lower authorities have concurrently decided an issue taking same view, the issue becomes debatable. On such a debatable issue penalty cannot be levied. We also found that the ld CIT (A) has correctly relied up on the decision of Honourable supreme court in case of Reliance petro products Limited [ 2010 (3) TMI 80 - SUPREME COURT] in deleting the penalty as held that otherwise it would be that in every case of return where the claim made by the assessee is not accepted by the assessing officer for any reason it will invite the penalty u/s 271 (1) (C) which is not the intention of the legislature. Therefore we confirm the order of the learned CIT A in deleting the penalty levied u/s 271 (1) ( C ) - Decided in favour of assessee. - ITA No. 6094, 6095 and 6096/Del/2013 - - - Dated:- 28-5-2019 - Shri Amit Shukla, Judicial Member A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the nature of FTS liable to tax in India, as held consistently by both the appellate authorities, and not amenable to two possible views. The fact that further appeal before High Court has been filed by the assessee referring a Substantial Question of Law is no bar to the levy of penalty as held in the case of Apex Urban Co-op Bank of Maharashtra Goa Ltd [judgment dated 18.09.2013 of Hon ble ITAT, Mumbai in ITA No. 3003/Mum/2013], 1(d) The Ld CIT(A) has erred in relying upon the decision of the Hon ble High Court in the case of M/s Reliance Petroproducts [(2010) 322 ITR 158] in deleting the penalty, not appreciating the fact that the ratio of the said case is applicable only in cases where there is a bona fide difference of opinions with regard to admissibility of a claim and all material facts related thereto and disclosed in the ITR voluntarily by the assessee and not the cases where the claim of the assessee is patently untenable and material facts related thereto are not voluntarily disclosed. 3. Brief facts of the case shows that assessee is a company Incorporated under the Singapore companies act on 21/3/2000. The business of Assessee Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that it does not have a permanent establishment in India and further its income is also not chargeable to tax under the provisions of Income Tax Act. The learned assessing officer noted that in pursuance of the terms of the agreement it is evident that payment was made to the assessee for rendering of technical services involved in production of live television signals for international quality meeting the specification and which was acceptable to the international broadcaster for the coverage of international cricketing events to be played in the territory conducted by the board of control for Cricket in India during the period February 2002 to 2004. According to the AO the provision of the services is technical and highly specialized job which requires substantial amount of knowledge, experience as well as supporting sophisticated equipments. He noted that as assessee is specialized in providing the services which is evident from the prequalification bid filed by it before Prashar Bharti. He also noted that assessee has been managing all international cricket television rights for Cricket for the year 2000 2006 including the entire production of ICC World Cup 2003 and all other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipts lies in India. Accordingly he charged to tax INR 8032331/ as business income of the assessee. Accordingly he held that total gross fee received from Prasar Bharti of INR 5 2626383/ is chargeable to tax in India at the rate of 20% amounting to INR 10525276/ and further total income from receipts outside India of INR 8032331/ was also chargeable to tax at the rate of 48 % amounting to INR 3855518/ . Accordingly total tax payable was determined at INR 1 4380794/ . Consequently assessment order u/s 143 (3) of the income tax act was passed on 21/2/2005. Similar Orders were also passed for assessment year 2003 04 and 2004 05 subject to the amounts mentioned in respective years. 7. The assessee preferred appeals before the Commissioner of income tax (Appeals) - XXIX, New Delhi, who dismissed those appeals by a common order dated 27/3/2008 for all the 3 years. 8. The assessee preferred the appeal before the coordinate bench who vide order dated 30/9/2011 held that a. Assessee does not have a permanent establishment in India during these 3 years. b. Advertisement revenue has no attribution to India and in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the order of the coordinate bench. Assessee was asked to submit its reply to that. 12. Assessee explained that all the particulars of income had been correctly disclosed in its return of income. The taxability of its receipts arises due to the difference of opinion between the assessee and the Department and therefore this cannot be regarded as concealment or furnishing inaccurate particulars of income. The assessee also supported its arguments by various decisions of the coordinate benches, honourable high courts and honourable Supreme Court and argued that these judgments are binding on the authorities below. 13. The learned AO rejected the explanation of the assessee noted that assessee has never offered its income for taxation in India knowing fully well that it ought to do so. Therefore it cannot now plead ignorance. The assessee was also assisted by the battery of legal and tax experts. He further noted that assessee is still maintaining that its income is not taxable in spite of finding of 2 appellate authorities to the contrary. He further noted that assessee s taxable income would have gone untaxed had it not been picked up for the scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said case is applicable only in cases where there is a bona fide difference of opinion with regard to admissibility of claim and all material facts related thereto are disclosed in the income tax return voluntarily filed by the assessee. Here assessee did not file any voluntary return of income. He therefore submitted that the order of the learned CIT A it deserves to be set aside and the order of the learned assessing officer needs to be restored. 18. We have carefully considered the rival contention and perused the orders of the lower authorities. The learned assessing officer levied penalty holding that the payment received from Prashar Bharti is the income in the nature of fees for technical services. On looking at the assessment order passed u/s 143 (3) of the income tax act the assessing officer has treated the same income as fees for technical services as per page number 7 of the assessment order. The total income accrued to the assessee of INR 5 2626383/ is taxable at the rate of 20% as held by the assessing officer. However we do not find in the assessment order itself that AO has recorded any satisfaction with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO in his order u/s 197 (1) took the view that there exists service PE and receipts are in the nature of business income. The appellant filed its return of income declaring nil taxable income. The returns were accompanied by audited financial statements and entire receipts from Prasar Bharati were disclosed therein. The appellant appended a note in the return of income wherein it has been claimed that its receipts are business income and as it has no permanent establishment in India and therefore business income is not taxable in India. Therefore it is seen that the appellant has disclosed all the material facts necessary for its assessment. However, characterization of receipt and existence of permanent establishment in India remains contentious issues which travelled from AO to honourable Delhi High Court. Therefore at the most, it can be said that two views were possible with regard to characterization of income and existence of permanent establishment and the appellant has taken one of the plausible views. 5.3 The AO has invoked the provisions of explanation 1 to section 271 (1) (c) but has not established how the present case is covered by those provisions. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi High Court in ITA number 240/2009 in COMMISSIONER OF INCOME TAX VS LIQUID INVESTMENT LTD wherein it has been held that when the substantial question of law has been admitted by the honourable High Court for its adjudication the issue becomes debatable. In the present case also the quantum appeals have been admitted by the honourable Delhi High Court therefore, even if the lower authorities have concurrently decided an issue taking same view, the issue becomes debatable. On such a debatable issue penalty cannot be levied. We also found that the ld CIT (A) has correctly relied up on the decision of Honourable supreme court in case of Reliance petro products Limited (322 ITR 158 ) in deleting the penalty. The Honourable Supreme Court has held that otherwise it would be that in every case of return where the claim made by the assessee is not accepted by the assessing officer for any reason it will invite the penalty u/s 271 (1) (C) which is not the intention of the legislature. Therefore respectfully following the decision of the honourable Delhi High Court in CIT vs liquid investment Ltd (supra), we confirm the order of the learned CIT A in deleting the penalty levied u/s 271 (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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