CIT vs. GOSWAMIS CREDITS & INVESTMENTS LTD

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 603/2012 . . . CIT ..... Appellant . Through Mr. Sanjeev Sabharwal, sr. standing counsel with Ms. Gayatri Verma, Adv. . . . versus . . . GOSWAMIS CREDITS and INVESTMENTS LTD ..... Respondent . Through Ms. Kavita Jha and Mr. Somnath Shukla, Advs. . . . CORAM: . HON'BLE MR. JUSTICE S. RAVINDRA BHAT . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 16.10.2012 . . . The revenue is aggrieved by the order dated 29.4.2011 of the ITAT in ITA No.5093/Del/2010 whereby the Tribunal set aside the penalty imposed upon the assessee. Question of law sought to be urged is whether the said order is contrary to Section 271(1)(c). The assessee had filed its return declaring a loss of `24,29,650/-; this was assessed under Section 143(3). The Assessing Officer framed assessment on 1.12.2006. In doing so, the Assessing Officer disallowed an amount of `65,97,597/- under Section 14A. This disallowance was confirmed by the Tribunal. The Assesisng Officer also initiated penalty proceedings for concealment of income under Section 271(1)(c) and imposed the impugned penalty. The matter reached the Tribunal. The Tribunal by the impugned order relied upon its decision in DCIT Vs/ Nalwa Investments Ltd. and held that the present case was covered by that order and accordingly allowed the assessee?s appeal stating that the question of disallowance was a debatable one, and therefore no penalty was imposable. . . . 2. This Court has considered the submissions. It is brought to the notice of the Court that in ITA 68/2012 i.e. CIT Vs. Jindal Equipment Leasing and Consultancy Services Ltd., (the assessee in that case being a sister concern of the present assessee) a similar order was set aside; the Court had then observed as follows: . ?5. The assessee in support of its contention had relied upon CIT versus Raeeva Lochan Kanoria, (1994) 208 ITR 616 (Cal.), CIT versus Indian Bank Limited, (1965) 56 ITR 77 (SC), CIT versus Maharashtra Sugar Mills Limited, (1971) 82 ITR 452 (SC) and Rajasthan State Warehousing Corporation versus CIT, (2000) 242 ITR 450 (SC). . 6. The CIT (Appeals) and the tribunal have considered the aforesaid explanation given by the assessee to justify their claim why no disallowance was mandated under Section 14A in the present case. They have accepted that the explanation given by the assessee was genuine and bona fide. The contention of the respondent assessee may have been rejected in the quantum proceedings but when deciding whether or not penalty for concealment should be imposed, the justification and explanation why the assessee had made the claim, is to be examined. Disallowance under the said Section have been subject matter of debate and different views have been expressed. A legal contention which was plausible and merited consideration was raised. Accordingly, the appellate authorities have applied the explanation to Section 271(1)(c) of the Act. Looking at the nature of explanation offered and the provision in question i.e. Section 14A, which was incorporated by the Finance Act, 2001 with retrospective effect from 1st April, 1962, we do not think in the present case any substantial question of law arises in view of the factual matrix involved. Accordingly, the appeal is dismissed.? . ?? . 3. For the reasons mentioned above, no exception can be taken to the impugned order of the Tribunal. The same is in line with the order of the Jindal Equipment Leasing and Consultancy Services Ltd. (quoted above). No substantial question of law arises for consideration. Appeal is therefore is dismissed. . . . . . S. RAVINDRA BHAT, J . . . . . . . R.V.EASWAR, J . OCTOBER 16, 2012 . vld . . . . . $ 5 .