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2022 (4) TMI 1010 - ITAT SURATPenalty u/s 271(1)(c) - AO failed to establish exact services provided by commission agent and claim of expenses was in connection with the business - HELD THAT:- It is settled law that penalty proceedings u/s 271(1)(c) of the Act is separate and independent. We are conscious of facts that in the quantum assessment, the addition has been upheld up to the stage of Tribunal. Facts remained the same that initial basis of disallowance of commissions payment is that it was on higher side comparative to the earlier year. Before the AO the assessee filed details of the commission’s recipient, their PAN and the details of TDS deducted on payments of such commissions. No separate and independent investigation was carried out by the AO. So far as objections ld. DR for revenue that assessee failed to prove the services rendered by commission recipient, in our view those facts may be relevant for allowing/disallowing the commission payment, however, same is not relevant as far as levy of penalty under section 271(1)(c) is concerned. As in CIT vs. Reliance Petroproducts (P) Ltd.[2010 (3) TMI 80 - SUPREME COURT] held that mere filing in incorrect claim which is not acceptable to AO would not lead to levy of penalty. Thus, in view of the above discussions, the grounds of appeal raised by the assessee is allowed.
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