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2025 Supreme(Online)(ITAT) 69
INCOME TAX APPELLATE TRIBUNAL (MUMBAI BENCH)
Shri Om Prakash Kant, AM, Shri Sunil Kumar Singh, JM
Asst. CIT (International Taxation)-3(2)(2) – Appellant
Versus
M/s Oxford University Press – Respondent
ITA No. 5742/MUM/2024
For the Appellants/Petitioners: Mr. Krishna Kumar, Sr. DR
For the Respondents: Mr. Rahul Charkha
The court ruled that penalties for inaccurate particulars cannot be levied on debatable issues and justified explanations offered by the taxpayer.
Headnote:(A) Income-tax Act, 1961 - Section 271(1)(c) - Penalty for furnishing inaccurate particulars - The Revenue's appeal contested the deletion of a penalty amounting to INR 1,28,46,270 by the Ld. CIT(A) concerning the assessment year 2015-16. The appellant filed a return claiming resident status, which the Assessing Officer later disputed, seeing the company as non-resident under the Act, leading to penalty imposition. The court affirmed that debate over the residential status makes the issue debatable, and the appellant justified its explanations with supporting documents, labeling the claims as bona fide, thus invalidating the penalty. Findings included that the appellant had been consistently filing under varied residential categories, reinforcing no inaccuracies were presented. (Paras 1, 3, 4, and 5)
| Table of Content |
|---|
| 1. arguments and justifications made by the parties. (Para 1) |
| 2. facts of penalty and appeal context. (Para 2) |
| 3. court's observations on previous filings and their implications. (Para 3) |
| 4. legal reasoning leading to the dismissal of the penalty. (Para 4) |
| 5. final judgment on the appeal. (Para 5) |
ORDER
PER OM PRAKASH KANT, AM
This appeal by the Revenue is directed against order dated 28.08.2024 passed by the Ld. Commissioner of Income-tax (Appeals) — 57, Mumbai [in short ‘the Ld. CIT(A)’] for AY 2015-16 , in relation to penalty u/s 271(1)(c) of the Income-tax Act, 1961 (in Qe short ‘the Act) levied by the Assessing Officer. The grounds raised by the Revenue are reproduced as under:
1. Whether on the facts and circumstances of the case and in law. Ld.CIT(A) has erred in deleting the penalty of INR 1,28,46,270 levied under Section 271 (1)(c) of the Act for furnishing v inaccurate particulars of income as per the provision of Company Act 2013 effective from 01.04.2014.
2. Whether on the facts and circumstances of the case and in law, Ld.CIT(A) has erred in deleting the levying of penalty for furnishing inaccurate particulars when assessee himself submitted tax resident certificate (TRC) issued by the HM Revenue & Customs, UK confirmed that the assessee is Tax resident for the purpose of UK-India tax Treaty and thus nonresident for India
3. Whether on the facts and circumstances of the case and in law, Ld.CIT(A) has erred in deleting the levying of penalty for furnishing inaccurate particulars when assessee himself submitted annual accounts in which auditors remarked that pursuant to the commencement of Companies Act 2013, the branch is covered under the definition of a foreign company as defined under section 2(42) of the Act with effect from 01.04.2014.The Appellant craves leave to amend or alter any ground or add a new ground which may be necessary,
2. Briefly stated, facts of the case are that the assessee filed return of income on 01.04.2016 declaring total income of Rs.12,84,62,680/-. The return of income filed by the assessee in the capacity of a domestic company (i.e. Resident status) and paid the tax at the rate of 30% of the total income. The assessee being branch office, of Oxford Press, UK according to the Assessing Officer the return should have been filed in the status of non-resident. Therefore, the case of the assessee was reopened by way of notice u/s 148 of the Act dated 07.03.2020. In response the assessee filed return of income and assessment u/s 147 of the Act was completed on 17.09.2021 wherein the penalty proceedings u/s 271(1)(c) of the 2 Act were initiated for furnishing inaccurate particulars of the income. The Assessing Officer levied penalty @ 100% of the tax sought to be evaded which was worked out to Rs.1,48,26,270/- by way of impugned penalty order.
3. On further appeal, the Ld. CIT(A) deleted the penalty observing as under:
“5.3 The facts recorded & finding of the AO in the penalty order and the submission made by the appellant has been considered.
The facts of the case of the appellant are that the Return of income was filed on 01.04.2016 declaring total income of Rs. 12,84,62,680/- for AY.2015-16. The Return was filed in the capacity of domestic company and offered tax @ 30%. In the re- assessment order, the AO considered status of the appellant company as non-resident and taxed the income @ 40% instead of 30% offered by the appellant.
During the appellate proceedings, the appellant has filed a submission on various aspects of levy of penalty u/s.271(1)(c). The appellant has filed a_ lengthy submission covering all aspects of penalty u/s.271(1)(c). However, the submission of the appellant regarding (i) penalty in respect of inaccurate claim, (ii) penalty for misrepresentation or suppression of facts, (iii) penalty provisions not to be strictly construed, etc. are not relevant to the facts of the case of the appellant.
The AO has levied penalty u/s.271(1)(c) of the Act. The AO has referred to e
