TMI Blog2018 (9) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... regard stand allowed. For enhancement on account of Advertisement, Marketing and Promotion expenses, it is seen that the ITAT Delhi Bench has restored this issue to the file of the AO/ TPO for both the years under consideration for the purpose of readjudicating the issue in light of the order of the Special Bench of the Tribunal in assessee’s own case for assessment year 2007-08. Although, AR has argued vehemently for deleting the penalties on the ground that the very basis of levy of penalties has been modified by the order we are of the considered opinion that interest of justice would be served if the penalties for both the years on the quantum enhancement pertaining to Advertising, Marketing and Promotion expenses is also restored t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law in levying penalty under section 271(l)(c) of the Income tax Act, 1961 ( the Act ) for alleged concealment and furnishing of inaccurate particulars of income in respect of enhancement made by the CIT(A) in order dated 31.03.2017 passed under section 250/143(3) of the Act, on account of (i) non-deduction of tax at source on payments made to vendors for purchase of finished goods, and (ii) ad-hoc disallowance of ₹ 131,07,31,300 being 50% of the Advertisement, Marketing and Promotion Expenses. 2. That the CIT(A) erred on facts and in law in passing the impugned penalty order in undue haste, without affording adequate opportunity of being heard to the Appellant. 3. That the CIT(A) erred on facts and in law in not appre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile making payment to vendors, while levying penalty qua disallowance made under section 40(a)(ia) of the Act. 7. That the order passed by the CIT(A) levying penalty under section 271 (1 )(c), being beyond limitation prescribed under section 275 of the Act, is bad in law and void ab initio. ITA no. 7896/Del/2017 1.That the Commissioner of Income Tax Appeals [ CIT(A) ] erred on facts and in law in levying penalty under section 271(l)(c) of the Income tax Act, 1961 ( the Act ) for alleged concealment and furnishing of inaccurate particulars of income in respect of enhancement made by the CIT(A) in order dated 31.03.2017 passed under section 250/143(3) of the Act, on account of (i) non-deduction of tax at source on payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant to not withhold tax on payments made to vendors was in consonance with the decision of the Supreme Court in the Appellant s own case for earlier assessment years. 6.2That the CIT(A) erred on facts and in law in proceeding on the fallacious and erroneous presumption that during the quantum proceedings, the Appellant had admitted its liability to deduct tax at source under section 194C while making payment to vendors, while levying penalty qua disallowance made under section 40(a)(ia) of the Act. 7. That the order passed by the CIT(A) levying penalty under section 271(1) (c), being beyond limitation prescribed under section 275 of the Act, is bad in law and void ab initio. 2. The Ld. Authorised Representative appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e quantum enhancement u/s 40(a0(ia) has been deleted by the ITAT in both the assessment years, the penalties imposed thereon would not survive. 2.1 With respect to the enhancement made on account of Advertising, Marketing and Promotion expenses, the Ld. Authorised Representative drew our attention to pages 25 to 28 of the order of the ITAT for the years under consideration and submitted that this issue had been restored to the file of the AO/TPO for fresh adjudication in light of the decision of the Tribunal in assessee s own case for assessment year 2007-08 which was decided by the Special Bench. It was submitted that for both the assessment years, 2005-06 and 2006-07, the quantum with respect to the enhancement relating to Advertising, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Tribunal in ITA nos. 3612 and 3613/Del/2017 and, therefore, since the impugned quantum additions have been deleted by the ITAT, the penalties u/s 271(1)(c) imposed on such enhancements also do not survive. Accordingly, the penalties with respect to enhancement u/s 40(a)(ia) in both the years under consideration stand deleted and the grounds raised by the assessee in this regard stand allowed. 4.1 As far as the other issue on which the penalties have been imposed is concerned, i.e. enhancement on account of Advertisement, Marketing and Promotion expenses, it is seen that the ITAT Delhi Bench has restored this issue to the file of the AO/ TPO for both the years under consideration for the purpose of readjudicating the issue in lig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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