Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH: ‘C’: NEW DELHI
Before: SHRI S.K. YADAV & SHRI B.R.R. KUMAR
This appeal is filed by the Assessee against the order of Ld. CIT(A)-23, New Delhi, dated 13.10.2017 pertaining to A.Y. 2012-13 wherein the assessee has raised the following grounds of appeal:-
“1. That on the facts and circumstances of the case and in law, the order passed by Learned Commissioner of Income Tax (Appeals) ("CIT(A)")/ Learned Assessing Officer ("AO") is bad in law and void ab- initio.
That on the facts and circumstances of the case and in law, CIT(A)/AO erred in holding that appellant had concealed or furnished inaccurate particulars of income. While doing so CIT(A)/AO also erred in appreciating the fact that a) the Form ITR-6 (i.e., Income tax return form applicable to the case of the Appellant) filed by the Appellant online on the online portal of the Income tax department is a paperless return form which does not contain any space for writing any notes or providing any explanation with respect to the Income-tax position taken by the Appellant in the return of income. b) when the case of the Appellant was picked up for scrutiny assessment, the Appellant submitted a relevant facts of the case and explained, through its various submissions, the tax position taken b the Appellant in the return of income is as per the law.
That on the facts and circumstances of the case and in law, CIT(A)/AO erred in not appreciating the fact that penalty and assessment proceedings are distinct and separate proceedings. Further, that that the appellant had never agreed at any stage of penalty proceedings with the tax position adopted by the AO.
4. That on the facts and circumstances of the case and in law, CIT(A)/ AO erred in considering the non-filing of further appeal as acceptance of demand raised and not appreciating the fact that the said action was in pursuant to buy peace of mind and to avoid litigation.
5. That on the facts and circumstances of the case and in law, CIT(A)/AO has erred in relying upon certain judicial precedents which are not applicable to the case of the present Appellant and distinguishable from the facts applicable to the Appellant's case.
The imposition of penalty made by CIT(A) is grossly unjustified, erroneous and unsustainable and needs to be deleted.
7. The appellant desires leave to add to or alter, by deletion, substitution or otherwise, any or all of t above grounds of objections, at any time before or during the hearing of the Appeal.
The appellant submits that the above grounds are independent and without prejudice to one another.
. Hilton International LLC. Further, the assessee also filed Additional Grounds of appeal on 10th April, 2.
2018 as under:-
“Additional grounds:
8. That on facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in not appreciating that no penalty is imposable on debatable issue on which two difference interpretations of a legal provision is possible and the Appellant adopted one of the view based on favorable judicial precedents.
That on factas and in the circumstances of the case and in law, the Ld.CIT(A) erred in ignoring the fact that in subsequent years on similar facts, no penalty is levied on the Appellant.
It is submitted that the aforesaid additional grounds of appeal are purely legal in nature and does not involve any fresh investigation into facts of the case. The Appellant by way of this application craves leave of the Hon’le Bench to raise the aforesaid additional ground.
In view of the decision of the Hon’ble Supreme Court in the case of Jute Corporation of India vs. CIT: 187 ITR 688 and the discretion vested with your Honour under Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963, it is prayed that the aforesaid additional grounds of appeal may kindly be admitted and adjudicated on merits.
The Appellant trusts that its request shall be acceded to.”
2.1 Since, the issue involved a question of law arising from the facts which are on record, the Additional Grounds are hereby admitted.
3. The only effective ground taken by the appellant is against the levy of penalty u/s 271(1)(c) of the Act.
Brief facts of the case are that, the assessee is a Limited Liability Company come up as Non-Resident of India (NRI) and does not have any PE in India. The assessment was completed by making addition on account of FTS/FIS.
Consequently, the penalty u/s 271(1)(c) has been levied. During the hearing, it was submitted that in the subsequent years (A.Ys. 2013-14 and 2014-15), on similar facts, no penalty was levied by the Department and for the Assessment Year 2015-16, the Revenue has initiated a penalty proceedings which have been subsequently dropped.
The Ld. AR has produced the relevant order sheet copy of the Assessment record while dropping the penalty proceeding for the Assessment Year 2015-16. He further argued that as per the order of ITAT Delhi in the case of M/s Inspectorate Singapore Pte. Ltd. Vs. ADDIT, Circle 1(2) International Taxation (ITAT Delhi- Wherein it was held that the consideration paid by the Indian customers cannot be regarded as ‘fee for technical services’ and since there was no transfer of technology involved in the services extended by the assessee, the consideration for such services could not be taxed under Article 12(4)(b) of the DTAA.
The Ld. AR relied on the following Judgments in the case of:- • Sir Shadilal Sugar & General Mills Ltd. vs. CIT (168 ITR
705)(SC) • Rai Industrial Power Pvt. Ltd. vs. DCIT (ITA 4862/Del/2013)
5.1 The Ld. AR has also brought to our notice the Judgment in the case of Bacardi Martini India Limited (288 ITR 585) (Del), wherein it was held that, no penalty is imposable on debatable issue on which two different legal interpretations are possible and the Appellant adopted one of the views based on favorable judicial precedents.
6. The Ld. DR has relied on the order of the Ld. CIT(A), and argued based on the Judgment in the case of Zoom Communication Pvt. Ltd. 327 ITR 510 and Mac Data Pvt. Ltd. 38 taxmann.com 448 (2013), that it is a fit case for levy of penalty.
We have heard both the parties and gone through the material available on record. The Revenue has not levied penalty, on the similar issue in the subsequent years and in fact dropped the penalty proceedings initiated in the year 2015-16 and also keeping in view, the similar issue, which has been decided in favour of the assessee in the case of M/s Inspectorate Singapore Pte. Ltd. Vs. ADDIT (supra), we hereby delete the penalty levied by the AO.
In the result, appeal of the assessee is allowed.
Order pronounced in the open court on 06/7/2018