Penalty not to be levied if quantum appeal is admitted by High Court

S. 271(1)(c): If the quantum appeal is admitted by the High Court, it means that the issue is debatable and penalty cannot be levied. Argument of the Dept that Nayan Builders 368 ITR 722 (Bom) does not lay down this proposition is not correct

The Revenue had filed an appeal from the order of the Tribunal in Nayan Builders and Developers Pvt. Ltd. (supra) deleting the penalty. This appeal being CIT vs. Nayan Builders and Developers [(2014) 368 ITR 722] was not entertained by this Court. It upheld the view of the Tribunal that the imposition of penalty was not justified as admission of appeal in quantum proceeding on this issue as substantial question of law was proof enough of the issue being debatable. The aforesaid decision in Nayan Builders and Developers Pvt.Ltd (supra) was also followed by this Court in CIT-8 vs. Aditya Birla Power Co. Ltd. in Income Tax Appeal No. 851 of 2014 rendered on 2nd December, 2015

P.C. :

1. This Appeal under section 260A of the Income Tax Act, 1961 (the ‘Act’) by the Revenue challenges the impugned order dated 27th August, 2013 passed by the Income Tax Appellate Tribunal (the ‘Tribunal’). The impugned order relates to the Assessment year 2006-07.

2. The Revenue urges the following question of law for our consideration:-

Please become a Premium member. If you are already a Premium member, login here to access the full content.