Mere admission of Appeal by High Court sufficient to cancel penalty U/s. 271(1)(c) of the Income Tax Act, 1961

Before Shri R.S.Syal, AM and Smt.Asha Vijayaraghavan, JM

ITA No. 2379/Mum/2009 : Asst.Year 1997- 98

Appellant by : Shri Sanjiv M.Shah
Respondent by : Shri Hari Govind Singh

O R D E R

Per R.S.Syal, AM :

This appeal by the assessee arises out of the order passed by the CIT(A) on 20.01.2009 confirming the penalty of Rs.37,32,777 imposed by the AO u/s.271(1)(c) of the Act in relation to assessment year 1997-98.

2. Shorn off unnecessary details it is an admitted position from both the sides that the penalty has been finally upheld qua the addition of Rs.1,04,76,050 towards income from Spectrum Corporate Services Ltd. assessed in this year, dis allowance of brokerage of Rs.10,79,221 and dis allowance of legal fees of Rs.2,00,000. It is seen that the Tribunal has upheld these additions in quantum proceedings for which the penalty has been held to be imposable. The learned A.R. has placed on record the judgement of the Hon’ble jurisdictional High Court in Income Tax Appeal No.23 68 of 2009 admitting inter alia the following two questions:-

“Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in holding that the deposit Rs. 1,04,76,050/- received from Spectrum is exigible to tax in the Assessment Year 1997-98?