TMI Blog2014 (7) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... a, AM For the Appellant: Shri Rajendra Prasad, JCIT, Sr. DR For the Respondent: Shri Miraj Shah, Advocate ORDER Per Shri Mahavir Singh, JM : This appeal by revenue is arising out of order of CIT(A)-XXXII, Kolkata in Appeal No. 28/XXXII/11-12/Cir-51/Kol dated 08.10.2012. Assessment was framed by ACIT, Circle- 51, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Years 2004-05 vide his order dated 11.09.2006. Penalty in dispute was levied by DCIT, Circle-51, Kolkata u/s. 271(1)(c) of the Act vide his order dated 31.03.2011. 2. The only issue in this appeal of revenue is against the order of CIT(A) deleting the penalty levied by AO u/s. 271(1)(c) of the Act for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the commission paid. The assessee further explained that as many of the major contracts for which assessee was working on behalf of the company did not materialize and as a result the commission payable was only to the extent of ₹ 23,93,830/- in place of the total advance payable against commission at ₹ 80 lacs. The assessee explained that the net amount of ₹ 56,06,165/- stood to the credit of the company in the books of the assessee on account of advance commission payment. The assessee during the course of penalty proceedings explained that he was soliciting business for the company against which the company paid commission and in fact commission to the extent of ₹ 23,93,830/- was paid during the current asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court dismissed the appeal of revenue and confirmed the order of ITAT wherein it is held that in respect of addition on account of deemed dividend no penalty u/s. 271(1)(c) of the Act for concealment or furnishing inaccurate particulars of income is warranted. Ld. counsel for the assessee also relied on the coordinate Bench decision in the case of Sunil Chandra Vohra Vs. ACIT (2009) 32 SOT 365 (Mum) wherein the ignorance of the provisions of section 2(22)(e) of the Act was held to be reasonable cause for deleting the penalty. The Tribunal held as under: the tax laws in this country are so complex and complicated that even a person specializing in this f eld, ncluding tax administrators, may not understand the law in the correct per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assigned by the tax authorities to dispute the bona fides of the explanation. Under the peculiar facts and circumstances and in the light of decisions cited by the learned counsel for the assessee, we are of the view that the explanation of the assessee is bonafide and hence the case falls outside the ambit of Expln. 1 to s. 271(1) (c) of the Act. In other words, no case was made out by the tax authorities to levy penalty under s. 271(1)(c) of the Act. We, therefore, set aside the orders of the tax authorities and cancel the penalty levied by the AO. In the result, appeal filed by the assessee is allowed. From the above, it seems that the issue is squarely covered in favour of the assessee and against the revenue by the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X
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