Appeal Dismissed: Revenue's Penalty Rejected, Assessee's Objection Allowed

The Tribunal dismissed the Revenue's appeal against the CIT(A)'s order for the assessment year 2005-2006, as the penalty under section 271(1)(c) of the Act was deemed unjustified due to the absence of addition/disallowance of commission payment in the assessment. Consequently, the appeal by the Revenue was rejected. On the other hand, the assessee's Cross Objection (CO) regarding the cancellation of penalty imposed by the AO was allowed since there was no basis for penalty imposition under the Act. The Tribunal's decision favored the assessee in this case.

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Issues:
1. Appeal by the Revenue against the order of the CIT(A) for the assessment year 2005-2006.
2. Disposal of the appeal in the absence of the assessee but considering written submissions.
3. Ground of appeal by the Revenue regarding the cancellation of penalty under section 271(1)(c) of the Act.
4. Assessment of commission expenditure and penalty imposition under section 271(1)(c) of the Act.
5. CO by the assessee regarding the cancellation of penalty levied by the AO on the merits of the case.

Analysis:
1. The appeal by the Revenue and the CO by the assessee for the assessment year 2005-2006 were directed against the order of the CIT(A) and were disposed of with a consolidated order in the absence of the assessee, who had filed written submissions requesting consideration. The Tribunal decided the appeal preferred by the Revenue and the CO preferred by the assessee on merits after considering arguments and written submissions.

2. The only ground of the Revenue's appeal was the cancellation of the penalty under section 271(1)(c) of the Act. The Tribunal observed that the addition/disallowance of commission payment was not made in the assessment framed by the AO, which led to the penalty imposition being unjustified. The Tribunal held that since the basis for the penalty imposition was not added in the assessment, the penalty under section 271(1)(c) of the Act was not leviable, and thus, the ground of the appeal by the Revenue was dismissed.

3. The CO of the assessee raised a ground regarding the cancellation of the penalty levied by the AO on the merits of the case. The Tribunal noted that the AO did not make any disallowance of commission expenditure in the assessment, leading to the conclusion that there was no basis for the penalty imposition under section 271(1)(c) of the Act. Consequently, the ground of the CO of the assessee was allowed.

4. In conclusion, the appeal of the Revenue was dismissed, and the CO of the assessee was allowed based on the findings related to the assessment of commission expenditure and the imposition of penalties under section 271(1)(c) of the Act. The Tribunal pronounced the order in Open Court on the specified date.

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