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Sunday, February 7, 2016

deleted levy of penalty u/s 271-C =In the instant case we are not dealing with collection of tax u/s 201(1) or compensatory interest u/s 201(1A). The case of the assessee is that these amounts have already been paid so as to end dispute with Revenue. In the present appeals we are concerned with levy of penalty u/s 271-C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court have deleted levy of penalty u/s 271-C in the cae of M/s. Itochu Corporation, reported in 268 ITR 172 (Del) and in the case of CIT Vs. Mitsui & Company Ltd. reported in 272 ITR 545. Respectfully following the aforesaid judgments of Hon'ble Delhi High Court and the decision of the ITAT, Delhi in the case of Television Eighteen India Ltd., we allow the assessee's appeal and cancel the penalty as levied u/s 271-C.”

                                                              NON-REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION


                        CIVIL APPEAL NO. 1704 OF 2008


      COMMR.OF INCOME TAX-XVIII,                     APPELLANT
     DELHI

                                VERSUS

      BANK OF NOVA SCOTIA                           RESPONDENT



                                  J U D G M E N T


   KURIAN, J.



1.    The short issue pertains to the assessment of  penalty  under  Section
271-C of the Income Tax Act, 1961. Against the order of  Assessing  Officer,
the respondent took up the matter in appeal and the Commissioner  of  Income
Tax (Appeals) deleted the levy  of penalty.

2.    The matter was pursued by the Revenue before the Income Tax  Appellate
Tribunal.   The Income Tax Appellate Tribunal vide  order  dated  31.03.2006
entered the following findings:

      “11..We have carefully  considered  the  rival  submissions.   In  the
instant case we are not  dealing  with  collection  of  tax  u/s  201(1)  or
compensatory interest u/s 201(1A).  The case of the assessee is  that  these
amounts have already been paid so as to end dispute with  Revenue.   In  the
present appeals we are concerned with levy of penalty u/s  271-C  for  which
it is necessary to establish that there  was  contumacious  conduct  on  the
part of the assessee.  We find that on  similar  facts  Hon'ble  Delhi  High
Court have deleted levy of penalty u/s 271-C  in  the  cae  of  M/s.  Itochu
Corporation, reported in 268 ITR 172 (Del)  and  in  the  case  of  CIT  Vs.
Mitsui & Company Ltd. reported in 272 ITR 545.  Respectfully  following  the
aforesaid judgments of Hon'ble Delhi High Court  and  the  decision  of  the
ITAT, Delhi in the case of Television Eighteen  India  Ltd.,  we  allow  the
assessee's appeal and cancel the penalty as levied u/s 271-C.”


3.    Being aggrieved, the Revenue took up the matter before the High  Court
of Delhi against the order of the Income Tax Appellate Tribunal.   The  High
Court rejected the appeal only on the ground that  no  substantial  question
of law arises in the matter.

4.    On facts, we are convinced that there is no  substantial  question  of
law, the facts and law having  properly  and  correctly  been  assessed  and
approached by the Commissioner of Income Tax (Appeals) as  well  as  by  the
Income Tax Appellate Tribunal.  Thus, we see no merits in the appeal and  it
is accordingly dismissed. No costs.

                                              ………………………………………………J.
          (KURIAN JOSEPH)


                                             …………………………………………………………J.
         (ROHINTON FALI NARIMAN)
      New Delhi;
      January 07, 2016

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