COMMISSIONER OF INCOME TAX vs. SHARDA MOTORS INDUSTRIES LTD

ITA - 595 / 2010HC Delhi24 May 20101 pages

For Petitioner: SANJEEV SABHARWAL

AI SummaryDismissed

What did the High Court hold?

The High Court held that where an issue is debatable and two views are plausible, a penalty cannot be imposed. This is stated as a well-settled proposition of law. The Court found no merit in the Revenue's appeal, agreeing with the ITAT's conclusion that the penalty was not leviable due to the debatable nature of the issue. The appeal was therefore dismissed in limine. The specific provision under which the penalty was sought to be imposed is not mentioned in the judgment, nor is the quantum of the disputed amount.

What were the facts?

The Revenue, Commissioner of Income Tax, filed an appeal before the High Court of Delhi against an order dated 6th May, 2009, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT's order was in relation to ITA No. 2880/Delhi/2008 for the Assessment Year 2003-2004. The appeal concerns the imposition of a penalty. The High Court noted that the ITAT had considered the issue to be debatable, with two possible opinions, and consequently held that no penalty could be imposed.

What were the issues?

1. Whether the penalty could be imposed when the issue was debatable and two opinions were plausible? (Question of law, turning on the provisions related to penalty imposition). Assessee's contentions: The judgment does not record any specific contentions made by the assessee before the High Court. However, it implies that the assessee would have supported the ITAT's finding that the issue was debatable. Revenue's contentions: The Revenue appealed the ITAT's order, implicitly arguing that the penalty was rightly imposed or that the issue was not debatable to the extent that it precluded penalty imposition. The judgment does not detail the specific arguments presented by the Revenue beyond their appeal against the ITAT's decision.

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . . ITA 595/2010 . . COMMISSIONER OF INCOME TAX ..... Appellant Through Mr.Sanjeev Sabharwal, Adv. . versus . . SHARDA MOTORS INDUSTRIES LTD ..... Respondent Through . . CORAM: HON?BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MADAN B. LOKUR . O R D E R 24.05.2010 . . The present appeal preferred by the Revenue is directed against the order dated 6th May, 2009 passed by the Income Tax Appellate Tribunal (for short ?the Tribunal?) in ITA No. 2880/Delhi/2008 for the Assessment Year 2003-2004 On a perusal of the order passed by the Tribunal it is clear as crystal that the Tribunal has expressed the view that the issue in question was a debatable one inasmuch as two opinions are possible. . ITA No. 595/2010 page 1 of 2 In view of the aforesaid, the Tribunal has held that the penalty could not be imposed. It is a well settled proposition of law that where an issue is debatable and two views are plausible, penalty cannot be imposed. Thus, we find no merit in this appeal and, accordingly, the same stands dismissed in limine. . CHIEF JUSTICE . . . . . MAY 24, 2010 MADAN B. LOKUR, J kapil . . . . . . . . . . . . . . . . . . . . . ITA No. 595/2010 page 2 of 2 .

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