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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SH. R.S. SYAL & SMT. BEENA A. PILLAI
ORDER Per Beena A. Pillai, Judical Member Present penalty appeal has been filed by revenue against order dated 28/10/16 passed by Ld. CIT (A)-7 on following grounds of appeal:
1. On the facts and under the circumstances of the case, the Ld. CIT(A) has erred in law in deleting the penalty of Rs. 5,53,00,980/- u/s 271(1)(c). Since the addition made u/s 14A of the Act read with rule 8D(iii) of Rs. 16,26,97,795/- was also sustained by the Ld. CIT(A).”
Brief facts of the case are as under : Assessee filed its return of income on 30/09/10 declaring total income of Rs.54,72,99,13,873/-which was revised on 28/03/12 declaring income of Rs.51,56,93,06,854/-. The case was selected for scrutiny and notice under section 143(2) was issued to assessee. Ld.AO under section 143(3) passed the assessment order by computing disallowance under section 14A read with Rule 8D at Rs.1,71,24,78,792/-. He worked out the disallowance as per rule 8D(i) at Nil, 8D(ii) at Rs.154,97,80,997/-and 8D(iii) at Rs.16,26,97,795/-.
Against the disallowance made by Ld.AO, assessee preferred appeal before Ld.CIT(A) who vide order dated 18/02/14 granted partial relief to assessee by sustaining the addition of Rs.16,26,97,795/- under 8D(iii). 4. Penalty proceedings under section 271(1)(c) of the Act was initiated for furnishing inaccurate particulars of income. Ld.AO passed penalty order by living hundred percent penalty on tax on the said disallowance under section 14 A. 5. Aggrieved by the order of Ld.AO, assessee preferred appeal before Ld.CIT(A). Ld.CIT(A) observed that assessee had filed all requisite details and there was no concealment of any material facts. He opined that there was no intention of assessee to conceal income or evade tax. Ld.CIT(A) deleted the penalty on the explanation furnished by assessee being satisfactory and that the bona fides could not be doubted.
3 (Punjab National Bank) 6. Aggrieved by the order of Ld. CIT (A) revenue is in appeal before us now.
At the outset, Ld.AR submitted that the appeal against the addition sustained by Ld.CIT(A) in the quantum is pending before this tribunal. However considering the debatable in nature of the issue involved we are of the considered opinion that penalty appeal could be separately heard.
Ld.Sr.DR in support of his arguments supported the order passed by Ld.AO.
On the contrary, Ld.AR submitted that the penalty has been levied without there being any error on behalf of assessee re- furnishing of inaccurate particulars or concealment of any material facts. He submitted that assessee had furnished all relevant facts and explanation regarding the claim during the assessment proceedings. It was submitted by Ld. AR that disallowance under section 14 A has always been debatable and contentious. He placed reliance upon the decision of Hon’ble Delhi High Court in the case of CIT vs Liquid Investments in dated 05/10/10, wherein Hon’ble court had observed that deduction under section 14 A of the act was a debatable issue.
We have perused the submissions advanced by both the sides in the light of the records placed before us.
In the assessment order Ld.AO has not been able to establish regarding any concealment of material facts or furnishing of inaccurate particulars by assessee. It is observed that disallowance has been made by considering the figures, that were duly disclosed 4 (Punjab National Bank) in the return and statement of accounts of assessee. Under such circumstances we do not find any infirmity in the orders passed by Ld. CIT (A) in deleting the penalty levied. Accordingly we dismiss the grounds raised
by revenue.
12. In the result appeal filed by the revenue stands dismissed. Order pronounced in the open court on 14th August, 2018.