ITO, NEW DELHI vs. M/S. OMNIGLOBE UNFORMATION TECHNOLOGIES (INDIA) PVT. LTD., DELHI

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ITA 3808/DEL/2013Status: DisposedITAT Delhi23 December 2015AY 2005-063 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the Hon'ble High Court later ruled the business was set up from April 1, 2004, the basis for the penalty no longer existed. The Tribunal also noted that penalty cannot be levied on debatable disallowances and the revenue did not prove the assessee's explanation was not bona fide.

What were the facts?

The Assessing Officer disallowed expenses claimed by the assessee for April and May 2004, holding the business was not set up until June 1, 2004. The CIT(A) deleted the addition, but the ITAT reversed this, upholding the disallowance. Subsequently, a penalty under Section 271(1)(c) was levied.

What were the issues?

Whether penalty under Section 271(1)(c) can be sustained when the underlying addition is subsequently overturned by a higher court, and if the disallowance was debatable.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “ E”: NEW DELHI

Hearing: 24.11.2015Pronounced: 23.12.2015

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “ E”: NEW DELHI BEFORE SHRI H.S.SIDHU, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER (Assessment Year: 2005-06) ITO, Omniglobe Information Ward-13(4), Room No.219, Technologies (India) Pvt. Vs. C.R.Building, Ltd, E-11, Rajouri Garden, New Delhi Delhi PAN:AAACO6606M (Assessee) (Revenue) Assessee by : Sh. Neeraj Jain, CA Revenue by : Sh.P. Dam Kanunjna, Sr. DR Date of Hearing 24.11.2015 Date of pronouncement 23.12.2015 O R D E R PER PRASHANT MAHARISHI, A. M.

1.

The present appeal preferred by the revenue against the order of the ld CIT(A)-XVI, Delhi dated 22.03.2013, deleting the penalty of Rs.21,68,037/- u/s 271(1)(c) of the Income Tax-act, 1961, imposed by the Assessing Officer for furnishing inaccurate particulars by the assessee company. The only issues in appeal of the revenue covered in two grounds of appeal

is that the learned Commissioner of Income-tax (Appeals) has erred in law and on facts in deleting the penalty u/s 271(1)(c) of the Act amounting to Rs.21,68,037/- for furnishing particulars of the assessee company. Though, Hon’ble ITAT has sustained the quantum of addition taken for claiming expenses which the company was not entitled.

2. The brief facts of the case are that the assessee company has claimed expenses of Rs.59,24,809/- pertaining for April and May 2004. The ld Assessing Officer disallowed this expenses by holding that no services were generated or provided during the month of April and May 2004 and the expenses are relating to recruitment of employees and their training. Therefore, the

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