M/S. SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 3(3)1, MUMBAI, MUMBAI

ITA 527/MUM/2026Status: DisposedITAT Mumbai15 April 2026AY 2015-168 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the issue regarding the deductibility of lease premium was admitted as a substantial question of law by the Hon'ble High Court, it indicated a debatable issue. Therefore, the penalty under section 271(1)(c) was not leviable.

What were the facts?

The assessee claimed deduction for amortized lease premium, which was disallowed as capital expenditure. Subsequently, penalty proceedings under section 271(1)(c) were initiated. The assessee argued that the issue was debatable as a substantial question of law was admitted by the High Court.

What were the issues?

Whether penalty under section 271(1)(c) can be levied on an issue that is debatable and has been admitted as a substantial question of law by the High Court.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 143(3),Section 115-JB,Section 158A,Section 260A,Section 14A

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Income Tax Appellate Tribunal, “F” BENCH, MUMBAI

Before: SHRI SANDEEP SINGH KARHAILSHRI BIJAYANANDA PRUSETH

For Appellant: Ms. Vinita Shah, AR
For Respondent: Shri Anurag Tripathi, SR. AR

PER SANDEEP SINGH KARHAIL, J.M.

1.

The assessee has filed the present appeals against the separate impugned orders of even date 28/11/2025, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], which 2 ITA Nos.526 & 527/Mum/2026 (A.Ys 2014-15 & 2015-16)

in turn arose from the penalty order passed under section 271(1)(c) of the Act, for the assessment years 2014-15 and 2015-16. 2. Since both the appeals per

The order continues below.

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