ORAVEL STAYS LIMITED,4TH FLOOR SPAZE PALAZO, SECTOR-69, GURGAON H.O GUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-6, NEW DELHI, ITO CIVIC CENTRE MINTO ROAD, AJMERI GATE

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ITA 4789/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2016-172 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that penalty under Section 271(1)(c) is not leviable in this case, relying on the Supreme Court judgment in Checkmate Services Pvt. Ltd. The penalty order was deleted.

What were the facts?

The assessee's appeal was against a penalty order under Section 271(1)(c) of the Income Tax Act, arising from the disallowance of employees' contribution to ESI. The issue was considered debatable.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when the underlying issue is debatable and has been settled by a Supreme Court judgment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH, ‘H’: NEW DELHI

Before: MS. MADHUMITA ROY & SHRI KRIWANT SAHAY

Hearing: 27.07.2026Pronounced: 27.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘H’: NEW DELHI BEFORE MS. MADHUMITA ROY, JUDICIAL MEMBER AND SHRI KRIWANT SAHAY, ACCOUNTANT MEMBER ITA No.4789/Del/2026 [Assessment Year: 2016-17] Oravel Stays Ltd., Vs. DCIT, 4th Floor, Spaze Palazo, Sector- Central Circle-6, 69, Gurgaon, Haryana-122001 New Delhi-110055 PAN No.AABCO6063D Appellant Respondent Appellant by Sh. Manju Sabarwal, Advocate, Sh. Manish Kumar, Advocate & Sh. Drona Negi, Advocate Respondent by Sh. Sudip Majumdar, Sr. DR Date of Hearing 27.07.2026 Date of Pronouncement 27.07.2026 ORDER PER MADHUMITA ROY, J.M.: The matter relates to order passed by the ld. CIT(A) u/s 271(1)(c) of the Act arising out of the order of penalty passed by the Ld. AO on account of disallowance of employees contribution/ESI. The issue since debatable and the legal position in this regard that penalty u/s 271(1)(c) of the Act is not leviable under this facts and circumstances of the matter, the ld. AR relied upon a judgment passed by the Hon’ble Supreme Court in the case

of Checkmate Services Pvt. Ltd. Vs. CIT reported in (2023) 143 taxmann.com 178 (SC). Such fact of issue being settled by the judgment passed by the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra) has not be able to be controverted by the ld. DR. We have further considered the judgment passed by the Co-ordinate bench in Ansal Housing Ltd. Vs. ACIT in ITA No. 1158/Del/2024 wherein on the identical facts and circumstances of the matter relying upon the judgment passed by the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra), the penalty order levied u/s 271(1)(c) of the Act was deleted. 2. Thus considering the entire aspect of the matter in the identical facts and circumstances of the case, since the issue on which the order impugned u/s 271(1)(c) of the Act is found to be datable, the same is not sustainable in the eyes of law and thus deleted.

3.

Appeal preferred by the assessee is allowed. Order pronounced in the open court on 27.07.2026. Sd/- Sd/- [KRINWANT SAHAY] [MADHUMITA ROY] ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27.07.2026 Subodh Kumar, Sr. P. S.* Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi Page | 2

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