THE COMMISSIONER OF INCOME TAX vs. MACHINO PLASTIC LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . 01.11.2010 . Present: Mr. Sanjeev Sabharwal and Mr. Utpal Saha, Advocates for the Appellant. . . + ITA No.1659/2010 . The penalty order passed by the Assessing Officer was set aside by the CIT (Appeals) which order has been confirmed by the ITAT inter alia on the ground that the issued raised was debatable and no inaccurate particulars were furnished by the assessee as is cleared by the following discussions:- ?We have considered the rival submissions. We find that in the penalty proceedings the assessee requested for keeping in abeyance the penalty proceedings for the reason that the major addition has been challenged in further appeal before the Tribunal. However, this request was rejected. We find that the disallowance of interest by invoking provisions of section 14A has been deleted by us vide our order in ITA No.1686/Del/2006 of even date. Accordingly, the disallowance cannot be considered to be income in respect of which inaccurate particulars are filed. Therefore, the penalty on the said disallowance does not survive. . As regards penalty on account of disallowance of prior period expenditure, it is seen that the dispute is not with reference to allowability of claim as such but only the year of allowability thereof. The learned Commissioner has noted that the issue is debatable and there was complete Disclosure by the assessee in respect of such expenditure claimed. Since this finding has not been found to be incorrect, it cannot be said that the assessee has either concealed particulars of his income or has furnished inaccurate particulars of income. Accordingly, the penalty under Section 271 (I)(c) cannot be levied merely because the disallowance has been upheld.? . ITA No.1659/2010 Page 1 of 2 . . . . We are, therefore, of the opinion that no substantial question of law arises, hence appeal is dismissed. A.K. SIKRI, J. . SURESH KAIT, J. NOVEMBER 01, 2010 mr . . . . . . . . . . . . . . . . . . . . . . . . . . ITA No.1659/2010 Page 2 of 2 . #5