PR. COMMISSIONER OF INCOME TAX 2 BHOPAL vs. M/S R.K. GUPTA CONTRACTORS AND ENGINEERS PVT. LTD.

ITA-89-2016 (PR. COMMISSIONER OF INCOME TAX 2 BHOPAL Vs M/S R.K. GUPTA CONSTRACTORS AND ENGINEERS PVT. LTD.) 11-01-2017 HIGH COURT OF MADHYA PRADESH PRINCIPAL SEAT AT JABALPUR ITA NO.89/2016 Pr. Commissioner of Income Tax-2 Vs. M/s R. K. Gupta Contractors & Engineers Pvt. Ltd. ITA NO.90/2016 Pr. Commissioner of Income Tax-2 Vs. M/s R. K. Gupta Contractors & Engineers Pvt. Ltd. ITA NO.93/2016 Pr. Commissioner of Income Tax-2 Vs. M/s R. K. Gupta Contractors & Engineers Pvt. Ltd. ITA NO.95/2016 Pr. Commissioner of Income Tax-2 Vs. M/s R. K. Gupta Contractors & Engineers Pvt. Ltd. Present: Hon’ble Shri Rajendra Menon, Acting Chief Justice & Hon'ble Smt. Anjuli Palo, J. __________________________________________________ Shri Sanjay Lal, learned counsel for the appellants. ______________________________________________ J U D G M E N T ( 11.1.2017 ) These are Revenue's Appeal under Section 260-A of the Income Tax Act, 1961, challenging orders passed by the Income Tax Appellate Tribunal, Indore Bench, Indore, in the matter of interfering with the proceedings initiated for imposing penalty under Section 271(1)(C) of the Income Tax Act. 2. As common questions of law and facts are involved in all these four appeals, they are being disposed of by this common order. 3. The order passed by the Assessing Officer was interfered with by the Commissioner, Appeals and challenging the order of Commissioner, (Appeal), the appeal was filed before the Tribunal by the Revenue. With reference to assessment year 2005-2006 to 2008-2009, various assessment orders were passed and deduction claimed under Section 80(1)(a)(4) of the Income Tax Act was disallowed by the Assessing Officer, the Appellate Authorities and the Tribunal. Challenging the dis- allowance, appeals were filed by respondent assessee under Section 260-A of the Income Tax Act in the High Court. Substantial questions of law were framed and the appeals after admission were pending consideration before the Appellate forum. In the meanwhile, as proceedings for imposing penalty were initiated under the provisions of Section 271(1)(c) and ultimately when penalty were imposed by the Assessing Officer at the instance of respondent -assessee, matter traveled to the Commissioner, Appeal and the same having been allowed at the instance of Revenue, matter was agitated with Tribunal and the Tribunal after taking note of various aspects of the matter, came to the conclusion that penalty could not be imposed when the appeal under Section 260A has been admitted in the matter of addition made or deduction permissible under Section 80(1)(a)(4) and after taking note of certain judgments of the Tribunal and the Bombay High Court in the case of Nayan Builders and Developers Pvt. Ltd. Vs. The Taxing Authorities, concurrent finding s are recorded by the Commissioner (Appeal) and the Tribunal, they came to the conclusion that when an appeal involving a substantial question of law was pending consideration before the High Court, the addition became a debatable one and when the addition was debatable and subjudice before the Appellate Authority, penalty under Section 271(1)(c) of the Income Tax Act could not be levied as the admission of appeal and the substantial question of law framed credence to the bonafide of the assessee to say that there was no deliberate concealment. Accordingly, following the judgment of the Bombay High Court and consistent orders of the Appellate Tribunal in this regard, the appeals filed by the Revenue were dismissed and the orders passed by the Commissioner, Income Tax Appeal, Bhopal, was upheld. 4. The findings recorded by the Commissioner, Income Tax Appeal was to the extent that as the question of deduction was pending consideration in the appellate forum, therefore, penalty imposed should be canceled. 5. We find that the aforesaid view taken by the Tribunal, to say that till decision on the appeal by the High Court the bonofide of the assessee in claiming the deduction cannot be disputed, the Commissioner, Income Tax Appeals and the Tribunal have not committed any error and in dismissing the appeal of revenue on such consideration, no error has been committed nor any substantial question of law arises warranting consideration. 6. Accordingly, finding no ground to interfere into the matter, all these appeals stand dismissed. (RAJENDRA MENON) ACTING CHIEF JUSTICE (SMT. ANJULI PALO) JUDGE mrs. mishra