DDIT, New Delhi V. M/s SNC Lavalin/Acres Inc. Pte. Ltd., New Delhi

ITA 5331/DEL/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2752 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 01-05-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 27-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURINDER PAL INT TAX
• Assessee Lawyers: S K AGRAWAL
• Keywords: Double taxation relief; Permanent establishment; Question of law; Revised return

Judgement Text

1 ITA NO. 5332/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI MS SUCHITRA KAMBLE, JUDI CIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUN TANT MEMBER ITA NO. 5332/DEL/2 013 ( A.Y 2003-04) DDIT CIRCLE-2(2) INTERNATIONAL TAXATION NEW DELHI (APPELLANT) VS SNC LAVALIN/ACRESS INC. PVT. LTD. 601, 6 TH FLOOR, DLF TOWER SHIVAJI MARG, MOTI NAGAR DELHI-110015 (RESPONDENT) ITA NO. 5331/DEL/2 013 (A.Y 2002-03) DDIT CIRCLE-2(2) INTERNATIONAL TAXATION NEW DELHI (APPELLANT) VS SNC LAVALIN/ACRESS INC. PVT. LTD. AAFCS2533J (RESPONDENT) APPELLANT BY SH. SURINDER PAL, CIT(DR) (INT. TAX) RESPONDENT BY SH. S. K. AGRAWAL, CA ORDER PER SUCHITRA KAMBLE, JM THESE APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER DATED 08/02/2013 PASSED BY CIT(A)-, GURGAON. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN DELETING PENALTY OF RS. 2,37,90,245/- IMPOSED BY THE ASSESSING DATE OF HEARING 07.03.2018 DATE OF PRONOUNCEMENT 27.03.2018 2 ITA NO. 5332/DEL/2013 OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961. 1(A) THE LD. CIT(A) HAS ERRED IN RELYING ON THE ORD ER OF HIS PREDECESSOR-IN- OFFICE DELETING PENALTY IMPOSED U/S 271(1)(C) IN AS TT YER 2001-02, IGNORING THE FACT THAT THE NATURE OF DEFAULT ON THE PART OF THE ASSESSEE LEADING TO IMPOSITION OF PENALTY IN THE SAID ASSTT YEAR WAS AL TOGETHER DIFFERENT FROM THE ONE INVOLVED IN THE ASSTT YEAR UNDER CONSIDERATION. 1(A) (I) IN THE ASSTT. YEAR 2001-02, THE ASSESSEE H AD SHOWN THE ENTIRE CONTACT PROCEEDS RECEIVED FROM NHPC AS INCOME ITS PERMANENT ESTABLISHMENT IN INDIA. THE AO DISALLOWED CERTAIN EXPENSES, HOLDING THE SAM E INADMISSIBLE. HONBLE ITAT ADMITTED THE ALTERNATE PLEA OF THE ASS ESSEE THAT THE ENTIRE CONTRACT RECEIPTS MAY BE TAXED ON GROSS BASIS AT A FLAT RATE UNDER SECTION 44D READ WITH SECTION 115A OF THE ACT. THIS ALTERED THE BASIS OF THE ASSESSMENT AND CONSEQUENTLY THE ISSUE OF DISALLOWANCES ON WHIC H PENALTY U/S 271(1)(C) WAS IMPOSED BECAME INFRUCTUOUS. IN THESE CIRCUMSTAN CES PENALTY U/S 271(1)(C) WAS DELETED BY THE CIT(A). 1(A)( II) IN THE ASSESSMENT YEAR UNDER CONSIDERATIO N (I.E. AY 2003-04), THE ASSESSEE OFFERED TO TAX ONLY PART OF THE ENTIRE PRO JECT RECEIPTS AND PROFITS IN INDIA ON A LEGALLY AND FACTUALLY INCORRECT PREMISE OF APPORTIO NMENT OF THE PROJECT RECEIPTS AND PROFITS BETWEEN PERMANENT ESTA BLISHMENT IN INDIA AND THE HEAD OFFICE. THE LD CIT(A) AS WELL AS THE HONB LE ITAT UPHELD THE ACTION OF THE AO OF BRINGING THE ENTIRE RECEIPTS AS TAXABLE IN INDIA. HONBLE ITAT O NLY ACCEPTED THE ALTERNATE PLEA OF THE ASSESSEE THAT TH E ENTIRE CONTRACT RECEIPTS BE TAXED ON GROSS BASIS AT A FLAT RATE UNDER SECTION 4 4D READ WITH SECTION 115A OF THE ACT. PENALTY U/S 271(1)(C) WAS LEVIED BY THE ASSESSING O FFICER ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME BY OFFERING ONLY PART OF THE PROJECT RECEIPTS AND PROFITS TO TAX IN INDIA AND NOT ON ACCOUNT OF THE DISALLOWANCE OF EXPENSES AS WAS THE CASE IN ASSTT Y EAR 2001-02. 1(B) THE LD. CIT(A) HAS ERRED IN NOT APPRECIATING T HE FUNDAMENTAL DIFFERENCE BETWEEN THE FACTUAL AND LEGAL BASIS FOR IMPOSITION OF PENALTY U/S 271(1)(C) FOR 3 ITA NO. 5332/DEL/2013 ASSTT YEAR 2001-02 AND THE ASSESSMENT YEAR UNDER CO NSIDERATION (I.E. ASTT YEAR 2003-04). THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE FACTS AND CIRCUMSTANCES AND THE ISSUE INVOLVED ARE SIMILAR TO THOSE INVOLVED IN ASSTT YEAR 2001-02. THE APPELLANT PRAYS FOR LEAVE TO ADD, AMEND, MODIF Y OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF THE APPEAL. 3. THE ASSESSEE IS A FOREIGN COMPANY, BASED IN CANA DA, WHICH HAD SECURED A CONTRACT FROM NATIONAL HYDROELECTRIC POWER CORPOR ATION LTD (NHPC) ON JULY 18, 1999 FOR EXECUTION OF PLANNING, DESIGN, ENGINEE RING REVIEW, SITE TECHNICAL SUPERVISION, SUPERVISION OF INSTALLATION, TESTING A ND COMMISSIONING OF ELECTROMECHANICAL EQUIPMENT FOR 300MW CHAMERA HYDRO ELECTRIC PROJECT, STAGE - II IN HIMACHAL PRADESH. THE APPELLANT OPENED A PR OJECT OFFICE AT NEW DELHI IN AUGUST 2000 [AFTER APPROVAL GRANTED BY RESERVE BANK OF INDIA VIDE LETTER DATED AUGUST 16, 2000] AND SITE OFFICE AT CHAMERA. BEFORE OPENING OF THE PROJECT OFFICE, ENTIRE WORK WAS CARRIED OUT AT HEAD OFFICE, CANADA AND THEREAFTER, PARTLY BY HEAD OFFICE, CANADA AND PARTLY BY PROJECT OFFICE . FOR AY 2002-03, RETURN OF INCOME WAS FILED ON OCTOBER 29, 2002 DECLARING AN I NCOME OF RS. 96,33,080, COMPUTED ON NET INCOME BASIS AFTER CONSIDERING TOTA L RECEIPTS AND TOTAL EXPENSES [INCLUDING EXPENSES INCURRED AT HEAD OFFIC E, CANADA]. THE APPELLANT ALONGWITH THE RETURN OF INCOME, INTER ALIA FURNISHE D PROJECT PROFIT AND LOSS ACCOUNT WHEREIN COMPLETE RECEIPTS AND EXPENSES FROM / FOR THE PROJECT IN INDIA WERE SHOWN. THE APPELLANT SUBSEQUENTLY FILED REVISED RETURN OF INCOME DECLARING AN INCOME OF RS. 42,77,560 ON MARCH 29, 2 004 CLAIMING THAT ONLY THE INCOME ATTRIBUTABLE TO PERMANENT ESTABLISHMENT (PE) IN INDIA SHOULD BE TAXED IN INDIA IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 7 OF DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND CANA DA (DTAA). FOR AY 2003-04, RETURN WAS SIMILARLY FILED ON NOVEMBER 27, 2003 DECLARING A LOSS OF RS. 47,34,310 ON NET BASIS IN RESPECT OF INCOME ATT RIBUTABLE TO PE IN INDIA UNDER ARTICLE 7 OF THE DTAA. THIS RETURN WAS SUBSEQ UENTLY REVISED ON 4 ITA NO. 5332/DEL/2013 DECEMBER 23, 2004 RE-COMPUTING THE RETURNED 12,66,6 42/-. AN ALTERNATE CLAIM WAS MADE DURING THE ASSESSMENT PROCEEDINGS, F OR AY 2002-03 VIDE LETTERS DATED NOVEMBER 22, 2004 AND MARCH 10, 2005 AND FOR AY 2003-04 VIDE LETTER DATED MARCH 14, 2006 CLAIMING THAT AS PER SE CTION 90(2) OF THE ACT, THE PROVISIONS OF THE ACT OR DTAA, WHICHEVER IS MORE BE NEFICIAL SHALL APPLY. ACCORDINGLY, RECEIPTS FROM NHPC MAY BE TAXED AS FTS ON GROSS INCOME BASIS UNDER SECTION 44D/115A OF THE ACT. 4. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3 ) OF THE ACT VIDE ORDERS DATED MARCH 24, 2006 FOR BOTH AY UNDER CONSI DERATION FOLLOWING THE ASSESSMENT ORDER FOR THE PRECEDING YEAR I.E. AY 200 1-02. IN THE ASSESSMENT ORDERS, THE INCOME WAS ASSESSED ON NET INCOME BASIS UNDER ARTICLE 7 OF THE DTAA BY THE AO AND HE REJECTED THE ALTERNATE CLAIM OF THE APPELLANT OF TAXING THE RECEIPTS FROM NHPC AS FTS ON GROSS BASIS UNDER SECTION 44D READ WITH 115A OF THE ACT. IN COMPUTING THE INCOME, THE ASSES SING OFFICER MADE DISALLOWANCES OF CERTAIN EXPENSES (LIKE SALARY PAID BY HEAD OFFICE TO THE EMPLOYEES SECONDED FROM AFFILIATED COMPANY IN CANAD A FOR WORK PERFORMED IN CANADA, GUARANTEE AND INSURANCE EXPENSES, COMPUTER REPAIR AND MAINTENANCE EXPENSES INCURRED BY HEAD OFFICE IN CANADA, EXPENDI TURE ON TRAVELING OF EMPLOYEES INCURRED BY HEAD OFFICE IN CANADA AND LEG AL AND PROFESSIONAL CHARGES INCURRED BY THE HEAD OFFICE IN CANADA) INCU RRED BY THE HEAD OFFICE IN CANADA RELATING TO THE PROJECT BY INVOKING THE PROV ISIONS OF SECTION 40(A)(I) OF THE ACT, SIMILAR TO DISALLOWANCES MADE FOR AY 2001- 02. 5. THE QUANTUM APPEALS FOR AY 2002-03 AND 2003-04 W ERE DISPOSED OFF. FOLLOWING THE DECISION OF INCOME TAX APPELLATE TRIB UNAL (THE TRIBUNAL) FOR AY 2001-02, THEN CIT(A) ACCEPTED THE ALTERNATE CLAIM O F THE APPELLANT AND CONFIRMED TAXATION OF RECEIPTS FROM NHPC AS FTS ON GROSS BASIS @ 20% U/S 44D READ WITH 115A OF THE ACT. THE TRIBUNAL VIDE O RDER DATED SEPTEMBER 16, 2011 FOR ASSESSMENT YEAR 2002-03 AND 2003-04, FOLL OWED EARLIER ORDER FOR AY 2001-02 AND CONFIRMED THE ORDER OF CIT(A) AND REJEC TED DEPARTMENTS APPEAL 5 ITA NO. 5332/DEL/2013 CONTESTING THE TAXATION OF RECEIPT FROM NHPC ON GRO SS BASIS. IN VIEW OF CHANGE IN MANNER OF TAXATION, OTHER ISSUES INCLUDING DISAL LOWANCES OF EXPENSES MADE IN THE ASSESSMENT ORDER INTER ALIA INVOKING THE PRO VISIONS OF SECTION 40(A)(I) BECAME INFRUCTUOUS. ACCORDINGLY, THE ASSESSING OFFI CER WAS DIRECTED TO COMPLETE THE ASSESSMENT BY TAXING THE RECEIPTS AS F TS ON GROSS BASIS U/S 44D/115A OF THE ACT. 6. THE HONBLE DELHI HIGH COURT HAS ADMITTED A SUBS TANTIAL QUESTION OF LAW IN THE APPEALS FILED BY THE ASSESSEE FOR AY 2002-03 AND 2003-04 BY SEPARATE ORDERS, BOTH DATED MARCH 12, 2013 ON THE ISSUE AS T O WHETHER UNDER ARTICLE 7(1)(B) OF DTAA, ENTIRE INCOME IS TAXABLE ON NET IN COME BASIS OR ONLY INCOME ATTRIBUTABLE TO THE PE CAN BE TAXED IN INDIA AND AD MITTED THE FOLLOWING SUBSTANTIAL QUESTION OF LAW: WHETHER ON A TRUE AND CORRECT INTERPRETATION OF ART ICLE 7(L)(B) OF THE LNDO- CANADA AADT READ WITH THE SCOPE OF WORK IN THE CONT RACT BETWEEN NHPC AND THE PETITIONER, THE ENTIRE INCOME OF THE PETITIONER COMPANY WAS LIABLE TO TAX IN INDIA IN THE ASSESSMENT OF PERMANENT ESTABLISHMENT? FURTHER, HONBLE DELHI HIGH COURT HAS ALSO ADMITTED SUBSTANTIAL QUESTION OF LAW FOR AY 2001-02 IN APPEAL FILED BY T HE DEPARTMENT AGAINST HONBLE TRIBUNALS ORDER UPHOLDING TAXATION OF THE A PPELLANT ON GROSS BASIS U/S 44D/ 115A OF THE ACT AND ADMITTED THE FOLLOWING SUB STANTIAL QUESTION OF LAW: WHETHER THE INCOME TAX APPELLATE TRIBUNAL WAS CORR ECT IN LAW IN APPLYING THE PROVISIONS OF THE INCOME TAX ACT, 1961 IN COMPUTING THE INCOME ATTRIBUTABLE TO THE PERMANENT ESTABLISHMENT OF THE ASSESSEE? THE REVENUE HAS ALSO FILED SIMILAR APPEALS FOR AY 2 002-03 AND 2003-04 BEFORE THE HONBLE DELHI HIGH COURT. THUS, DEPARTME NT HAS NOT ACCEPTED TAXATION ON GROSS BASIS. 7. IN THE MEANWHILE THE PENALTY PROCEEDINGS U/S 271 (1)(C) OF THE INCOME TAX ACT WAS INITIATED. THE ASSESSEE FILED DETAILED SUBMISSIONS IN THE PENALTY 6 ITA NO. 5332/DEL/2013 PROCEEDINGS BEFORE ASSESSING OFFICER FOR AY 2002-03 AND 2003-04. HOWEVER, ASSESSING OFFICER PASSED THE PENALTY ORDERS FOR BOT H THE YEARS DATED 30.05.2012 U/S 271(L)(C) OF THE ACT LEVYING PENALTY OF RS. 2,00,08,534 FOR AY 2002-03 AND RS. 2,37,90,245/- FOR ASSESSMENT YEAR 2 003-04 BEING DIFFERENCE IN TAX U/S 44D/115 A OF THE ACT ON GROSS BASIS AS P ER THE TRIBUNALS ORDER AND TAX ON RETURNED INCOME (ON NET BASIS). 8. BEING AGGRIEVED BY THE ORDER OF THE PENALTY, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) ALLOWED THE APPEAL O F THE ASSESSEE. 9. THE LD. DR SUBMITTED THAT THE CIT(A) HAS ERRED I N DELETING PENALTY OF RS. 2,37,90,245/- IMPOSED BY THE ASSESSING OFFICER UNDE R SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. THE CIT(A) HAS ERRED IN RELYI NG ON THE ORDER OF HIS PREDECESSOR-IN-OFFICE DELETING PENALTY IMPOSED U/S 271(1)(C) IN A.Y. 2001-02, IGNORING THE FACT THAT THE NATURE OF DEFAULT ON THE PART OF THE ASSESSEE LEADING TO IMPOSITION OF PENALTY IN THE SAID ASSESSMENT YEA R WAS ALTOGETHER DIFFERENT FROM THE ONE INVOLVED IN THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THE ASSTT. YEAR 2001-02, THE ASSESSEE HAD SHOWN THE ENT IRE ESTABLISHMENT IN INDIA AND THE HEAD OFFICE. THE CIT(A) AS WELL AS THE ITA T UPHELD THE ACTION OF THE ASSESSING OFFICER OF BRINGING THE ENTIRE RECEIPTS AS TAXABLE IN INDIA. THE ITAT ONLY ACCEPTED THE ALTERNATE PLEA OF THE ASSESSEE TH AT THE ENTIRE CONTRACT RECEIPTS BE TAXED ON GROSS BASIS AT A FLAT RATE UND ER SECTION 44D READ WITH SECTION 115A OF THE ACT. PENALTY U/S 271(1)(C) WAS LEVIED BY THE ASSESSING OFFICER ON ACCOUNT OF FURNISHING OF INACCURATE PART ICULARS OF INCOME BY OFFERING ONLY PART OF THE PROJECT RECEIPTS AND PROFITS TO TA X IN INDIA AND NOT ON ACCOUNT OF THE DISALLOWANCE OF EXPENSES AS WAS THE CASE IN ASSTT YEAR 2001-02. THE CIT(A) HAS ERRED IN NOT APPRECIATING THE FUNDAMENTA L DIFFERENCE BETWEEN THE FACTUAL AND LEGAL BASIS FOR IMPOSITION OF PENALTY U /S 271(1)(C) FOR ASSTT YEAR 2001-02 AND THE ASSESSMENT YEAR UNDER CONSIDERATION (I.E. ASTT YEAR 2003-04). THE CIT(A) HAS ERRED IN HOLDING THAT THE FACTS AND CIRCUMSTANCES AND THE ISSUE INVOLVED ARE SIMILAR TO THOSE INVOLVED IN ASSTT YEA R 2001-02. 7 ITA NO. 5332/DEL/2013 10. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A) AND ALSO THAT OF ITAT & HONBLE DELHI HIGH COURT IN ASSESSEES OWN CASE. T HE LD. AR SUBMITTED THAT THE CONTRACT PROCEEDS RECEIVED FROM NHPC AS INCOME OF ITS PERMANENT ESTABLISHMENT IN INDIA. THE ASSESSING OFFICER DISALLOWED CERTAIN EXPENSES, HOLDING THE SAME INADMISSIBLE. THE ITAT ADMITTED TH E ALTERNATE PLEA OF THE ASSESSEE THAT THE ENTIRE CONTRACT RECEIPTS MAY BE T AXED ON GROSS BASIS AT A FLAT RATE UNDER SECTION 44D READ WITH SECTION 115A OF TH E ACT. THIS ALTERED THE BASIS OF THE ASSESSMENT AND CONSEQUENTLY THE ISSUE OF DIS ALLOWANCES ON WHICH PENALTY U/S 271(1)(C) WAS IMPOSED BECAME INFRUCTUOU S. IN THESE CIRCUMSTANCES PENALTY U/S 271(1)(C) WAS DELETED BY THE CIT(A). IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE OFFERED TO TAX ONLY PAR T OF THE ENTIRE PROJECT RECEIPTS AND PROFITS IN INDIA ON A LEGALLY AND FACTUALLY INCORRECT PREMISE OF APPORTIONMENT OF THE PROJECT RECEIPTS AND PROFITS B ETWEEN PERMANENT. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE CIT(A) HELD AS UNDER: 5.5 IN AY 2001-02, MY PREDECESSOR VIDE HIS ORDER D ATED JUNE 16, 2009 HAS DELETED THE PENALTY IN SIMILAR CIRCUMSTANCES. T HE APPELLANT HAS SUBMITTED THAT THE REVENUE HAS ACCEPTED THE ORDER O F HONBLE CIT(A) FOR AY 2001-02 WHEREIN PENALTY LEVIED U/S 271(1)(C) OF THE ACT WAS DELETED. THE HONBLE CIT(A) IN DELETING THE PENALTY FOR AY 2001- 02 HAS HELD AS UNDER: THE TRIBUNAL HAS HOWEVER IN PARAGRAPH 10 OF THE OR DER COME TO THE CONCLUSION THAT THE AMOUNT RECEIVED BY THE APPELLAN T WAS FEE FOR TECHNICAL SERVICES AS DEFINED IN EXPLANATION 2 TO SECTION 9(1 )(VII). THE SAME WAS TO BE TAXED AS PER THE PROVISIONS OF SECTION 44D READ WITH 115A OF THE ACT. THE TRIBUNAL ALSO OBSERVED THAT SINCE THE ASSESSEE HAS CHOSEN TO BE GOVERNED BY THE PROVISIONS OF IT ACT THE AO WAS DIR ECTED TO RECOMPUTED THE INCOME AS PER SECTION 44D AND THE ALTERNATE PLEA OF THE APPELLANT WAS ACCEPTED AND THE APPELLANT WAS DIRECTED TO RECOMPUT ED THE TAX LIABILITY IN ACCORDANCE WITH THE ORDER OF THE TRIBUNAL. IN THIS BACKDROP, THE TRIBUNAL IN PARA 12.1 OBSERVED THAT THE DEDUCTION AS INDICATED ABOVE ON ACCOUNT OF COST OF PERSONNEL TO OPENING WORK IN PROGRESS, COMP UTER REPAIRS AND MAINTENANCE, TRAVELLING EXPENSE AND ENGINEERING SOF TWARE WERE NOT TO BE ALLOWED AS DEDUCTIONS. 8 ITA NO. 5332/DEL/2013 IN THE LIGHT OF ABOVE REFERRED FINDING, IT IS PROVE D BEYOND DOUBTS THAT THE APPELLANT HAD NOT FURNISHED INACCURATE PARTICULARS OF INCOME, THERE WAS NO MATERIAL TO SHOW THAT IT WAS A CASE OF CONCEALMENT AND THAT DIFFERENCE IN RETURNED INCOME AND ASSESSED INCOME DID NOT ARISE F ROM ANY FRAUD OR GROSS OR WILLFUL NEGLECT ON THE PART OF THE APPELLA NT AND THAT APPELLANT HAD DISCHARGED ITS ONUS BY FURNISHING BONAFIDE EXPLANAT ION AND MATERIAL ON RECORD FOR YEAR UNDER CONSIDERATION. FOR THE ABOVE REASONS, IT IS CLEAR THAT AO WAS NOT JUSTIFIED IN HOLDING APPELLANT GUILTY OF CONTRAVENING THE PROVISIONS OF SECTION 271(1)(C). ACCORDINGLY, THE P ENALTY LEVIED BY AO IS CANCELLED. 5.6 AS THE FACTS AND CIRCUMSTANCES AND THE ISSUE IN VOLVED IN AY 2002- 03 AND 2003-04 IS SIMILAR AS IN AY 2001-02, FOLLOWI NG THE ORDER OF MY PREDECESSOR FOR AY 2001-02, I HOLD THAT AO WAS NOT JUSTIFIED IN LEVYING PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY, THE PENALTY LEVIED BY AO IS CANCELLED. THE CIT(A) HAS RELIED UPON THE CIT(A) ORDER DATED 1 6.06.2009 FOR ASSESSMENT YEAR 2001-02. IT CANNOT BE STATED THAT S INCE THE APPEALS ARE ADMITTED BEFORE THE HON'BLE HIGH COURT IN THE QUANT UM APPEAL, THE PENALTY CAN BE LEVIED. THE CIT(A) HAS RIGHTLY DECIDED THE ISSU E AND DELETED THE PENALTY. THERE IS NO NEED TO INTERFERE WITH THE ORDER OF THE CIT(A). IN BOTH THE ASSESSMENT YEAR THE ISSUE IS COMMON; THEREFORE, BOT H THE APPEALS OF THE REVENUE ARE DISMISSED. 12. IN RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH, 2018 . SD/- SD/- (PRASHANT MAHARISHI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 27/03/2018 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 9 ITA NO. 5332/DEL/2013 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 07/03/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 08/03/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 27.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 27.03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.