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TMI Blog2019 (10) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... A, ACCOUNTANT MEMBER, With this appeal, the Revenue has challenged the correctness of the ld. CIT(A)-7, New Delhi. 2. Thus the solitary ground of the Revenue read as under:- "On the facts and under the circumstances of the case, the ld. CIT(A) has erred in law in deleting the penalty of Rs. 1,18,72,790/- levied under section 271(1)(c) when the disallowance made u/s 40(a)(ia) was also sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be subjected to the provisions of Section 194C of the Act. 5. In its reply, the assessee stated that the actual cost to the company M/s Jindal Power Limited has been reimbursed to that company and that company has duly deducted the tax at source while making payments to the concerned employees therefore, the provisions of Section 193(C) of the Act did not apply. 6. The submissions did not fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be made in the hands of the assessee. In view of this we set aside this issue back to the file of the Ld. assessing officer to allow the benefit of the 2nd proviso to the section 40 a (ia) of the income tax act and if the assessee is able to satisfy the Ld. assessing officer that the recipient of the income has offered the income in its return of income on furnishing the section 139 of the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditions made in the first round of litigation and accepted the returned income. 9. In the light of the aforesaid stated facts, once the foundation has been removed, the superstructure must fall. Since the basis for the levy of penalty i.e. the disallowances made in the assessment order has been removed, the penalty so levied deserves to be deleted. Therefore, we decline to interfere with the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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