Income Tax Appellate Tribunal - MumbaiGartner Irelant Ltd, Mumbai vs Department Of Income Tax on 30 November, 2009IN THE INCOME TAX APPELLATE TRIBUNAL
                MUMBAI BENCHES, 'G', MUMBAI

    BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER
                          AND
         SHRI VIJAY PAL RAO, JUDICIAL MEMBER

                       ITA No. 1148/Mum/2010
                     (Assessment Year: 2004-05)

DDIT(IT) 3(1),
Sciendia House
R No.136
1 s t fl. N M Road
Mumbai-                                       .........Appellant

      Vs

Gartner Irelant ltd
C/o BSR and Co.KPMG House
Kam ala Mills Compound,
448 Senapati Bapat marg
Lower Parel,
Mumbai-400013                                     ... Respondent

       Assessee by : Shri Niraj Sheth
       Revenue by   : Shri Pavan Ued

                             O R D E RPER VIJAY P AL RAO,JM


      This appeal b y the revenue is directed against the order

dated 30.11.2009 of CIT(A) arising from the penalty order

passed under section 271(1) ( c ) for the assessment year

2004-05.2     The revenue        has raised only ground i n this appeal

which reads as under :"On the facts and circumstances of the case and in
     law, the CIT(A) erred in deleting the penalty u/s
     271(1)( c ) of the Act levied by the AO withoutIT A No. 1148/Mum/20102           (Ass es s m en t Ye ar: 2 00 4- 05)


     appreciating that the assessee has furnished incorrect
     facts for showing a lower total income and that the
     assessee's has furnished incorrect facts for showing a
     lower total income and that the assessee's
     explanation remained to be proved as " "bonafide" in
     as much as the assessee could not substantiate its
     explanation with appropriate supporting evidence
     before the AO"3.    W e have heard   the   learned DR as well as the learned

AR and considered the relevant record.     The assessee in its

return of income declared NIL incom e and claimed             refund of

tax paid on the ground that its income is in the nature of

business income underArticle 7of India -Ireland DTAA and

since the assessee has no perm anent establishment in India,

therefore, its income is not subj ect to tax in India. The AO

completed the assessment by determining the              income            as

Royalt y at Rs.62,21,580/- vide order dated 18.12.2006. The

penalty proceedings    u/s 271(1)( c )    was also initiated in

respect of   the said addition   and penalty of    Rs.62,21,580/-

was imposed vide penalty order passed on 24.3.2009.4.    The CIT(A) has deleted the penalt y by hol ding as under :"1.3.0 I have considered the facts and gone through
     the penalty order passed by the AO and also the
     submissions made by the appellant before me. The
     assessment    order was passed on 26.12.32007. A
     perusal of the assessment order reveals that the AO
     had considered the note below the computation of
     income and investigated. However, there is       no
     allegation or observation of the        AO in the
     assessment order that any fact material to the
     computation of income was either not disclosed or
     was found to be wrong. The assessment has beenIT A No. 1148/Mum/20103             (Ass es s m en t Ye ar: 2 00 4- 05)


     made on the basis of facts discl osed by the appellant
     in the return of income and also during the course of
     assessment proceedings as and when demanded by
     the AO.     Assessment has been made by the AO
     having a different opinion from the point of view of
     the appellant "5.    It was brought to our notice that this Tribunal has

already deleted the quantum addition for which the penalty is

levied vide order dated 30.07.2010 in ITA No.1452/Mum/2008.

The assessee filed a copy     of the order    of this Tribunal in

quantum appeal.     W e note that this Tribunal has decided th e

issue in favour of the aseseee at paragraph 7 which reads as

under :"7.      Keeping in vi ew the principles of judici al
     disci pline as explained by the Hon. Supreme Court in
     the judicial pronouncements discussed above, we are
     of the view that the AO as well as the l d. CIT(A)ought
     to have followed the order of the Tri bunal in the case
     of WIPRO ltd (supra) which was squarely applicable
     to the issue i nvolved in the case of the assessee.
     We, therefore, deplore their action in not following
     the said decision and hold, followi ng respectfully the
     same that the subscri ption income received by the
     assessee from the Indian clients was not in the nature
     of royalty taxable in India. The addition made by the
     AO land confirmed by the ld. CIT(A) on account of
     said subscription income is accordingly deleted and
     appeal of the assessee is allowed"6.    Since the   addition itself   has   been deleted            by this

Tribunal vide order (supra), the penalty does not survive.

Therefore, there is no reason to interfere in the order of theIT A No. 1148/Mum/20104             (Ass es s m en t Ye ar: 2 00 4- 05)


CIT(A). Accordingly, we confirm the order of the CIT(A) and

dismiss the appeal filed by the revenue.Order pronounced in the open court on 08.10.2010


     Sd                                          sd

  (RAJENDRA SINGH )                         (VIJAY PAL RAO)
ACCOUNTANT MEMBER                          JUDICIAL MEMBER

Mumbai, Dated 8     th Oct 2010
SRL:51010

copy to:1. Appellant2. Respondent3. CIT Concerned4. CIT(A) concerned5. DR concerned Bench

     True cop y                            BY ORDER


                          ASSTT. REGISTRAR, ITAT, MUMBAI