PRINCIPAL COMMISSIONER OF INCOME TAX-05, MUMBAI vs. M/S VODAFONE WEST LTD. (MERGED WITH VODAFONE MOBILE SERVICES LTD.)
What did the High Court hold?
The High Court held that no substantial question of law was involved, let alone requiring interpretation. The court noted the procedural history where the addition made by the AO was set aside by the CIT(A) and affirmed by the ITAT. Furthermore, a subsequent remand to the AO, in light of the decision in Commissioner of Income Tax vs. Bharti Hexacom (2014), was also decided in favour of the assessee. The assessee's argument that no penalty could be imposed without a finding of concealment or contumacious conduct, given the setting aside of the addition on merits, was implicitly accepted by the court's finding that no substantial question of law arose. The appeal filed by the Revenue was therefore dismissed.
What were the facts?
The appeal was filed by the Principal Commissioner of Income Tax-05, Mumbai (Revenue) against M/s Vodafone West Ltd. (Assessee). The Assessing Officer (AO) made an addition, which was set aside by the Commissioner of Income Tax Appeal (CIT(A)). The Income Tax Appellate Tribunal (ITAT) affirmed the CIT(A)'s order. Subsequently, when the matter reached the High Court, the Revenue's appeal was remanded to the AO in light of the decision in Commissioner of Income Tax vs. Bharti Hexacom (2014). This issue was also decided in favour of the assessee.
What were the issues?
1. Whether there is a substantial question of law requiring interpretation by the High Court, given that the addition made by the AO was set aside by the CIT(A) and affirmed by the ITAT, and the subsequent remand issue was also decided in favour of the assessee. Assessee's contention: The assessee argued that since the addition, including the quantum, was set aside on merits, there could be no imposition of penalty unless there was a finding of concealment or contumacious conduct. Revenue's contention: The judgment records that the learned Senior Standing Counsel for the Department fairly informed the court about the procedural history and the decisions in favour of the assessee. No specific argument was recorded for the Revenue regarding the existence of a substantial question of law.
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Cause title — parties, addresses and appearances
O R D E R %
2026
Learned Senior Standing Counsel for the Department fairly informs that addition made by the Assessing Officer (AO) has been set aside by the Commissioner of Income Tax Appeal CIT (A), and the same has been affirmed by the Income Tax Appellate Tribunal in the appeal filed by the Department.
He further informed that when the matter came to this Court, the Department’s appeal was remanded to the Assessing Officer in the light of The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 08/07/2026 at 11:57:26
In response whereof, Mr. Sachit Jolly, learned Senior Counsel appearing for the respondent-assessee, at the outset, submitted that when the addition including quantum itself has been set aside on merits, there cannot be any question of imposition of penalty unless there is a finding of concealment or contumacious conduct.
Having heard the learned counsel for the parties, we do not find any question of law, much less any substantial question of law being involved requiring interpretation.
The appeal, therefore, fails.
All pending applications stand disposed of.
DINESH MEHTA, J.
RAJNEESH KUMAR GUPTA, J. JULY 6, 2026 neelam/rajshree This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 08/07/2026 at 11:57:26
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