TaxTMI 
TaxTMI 
2018 (9) TMI 472
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....ed income of Rs. 3,34,18,55,880/-. The impugned penalty amounts to Rs. 1,36,34,75,765/-. Similarly, ITA no. 7896/Del/2017 is the assessee's appeal challenging imposition of penalty u/s 271(1)(c) of the Act for assessment year 2006-07. This penalty was also imposed by the Ld. CIT (A), Noida after enhancing the assessed income from Rs. 4,97,93,69,060/- to Rs. 8,74,91,98,537/-. The impugned penalty for this year is Rs. 1,23,47,00,375/-. Since both these appeals involved identical issues, they were heard together and are being disposed of by this common order. The grounds raised by the assessee in both the appeals are as under:- ITA no. 7895/Del/2017 " 1. That the Commissioner of Income Tax Appeals ["CIT(A)"] erred on facts and in law in l....
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....n furnished was bona fide, and in any case, (c) no penalty is leviable qua additions/ disallowances related to issues which are debatable. 6.1 That the CIT(A) erred on facts and in law in levying penalty qua disallowance made under section 40(a)(ia) of the Act without appreciating that the stand taken by the 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. 6.2 That the C1T(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, whi....
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....ued under section 274 read with section 271(1 )(c) of the Act, as also in the impugned order dated 30.09.2017. 5. That the CIT(A) erred on facts and in law in levying penalty qua enhancement made by the C1T(A) in quantum proceedings without appreciating that (a) all material facts were duly disclosed by the Appellant; (b) claims made were justified in law and explanation furnished was bona fide, and in any case, (c) no penalty is leviable qua additions/ disallowances related to issues which are debatable. 6.1 That the CIT (A) erred on facts and in law in levying penalty qua disallowance made under section 40(a)(ia) of the Act without appreciating that the stand taken by the Appellant to not withhold tax on payments made to vendors was....
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....a) of the Act and ad hoc disallowance out of Advertising, Marketing and Promotion expenses. The Ld. Authorised Representative further submitted that the assessee's quantum appeals for these two years have been decided by the ITAT in favour of the assessee in ITA Nos. 3612 and 3613/Del/2017 vide consolidated order dated 18.7.2018 wherein the enhancement made by the Ld. CIT (A) u/s 40(a)(ia) was held to be vide ab initio as the enhancement was made by the Ld. CIT(A) by introducing/ discovering a new source of income. He drew our attention to the relevant paragraphs of the order of the ITAT, as contained in pages 13 to 16 of the ITAT's order, and submitted that since the quantum enhancement u/s 40(a0(ia) has been deleted by the ITAT in both th....
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....d. CIT (A) u/s 40(a)(ia) has been deleted by the Tribunal by holding the same as void ab initio. However, in respect of the other addition on which the penalties have been imposed i.e. enhancement in respect of Advertising, Marketing and Promotion expenditure, the Ld. CIT-DR submitted that the issue should also be restored to the file of the AO/TPO rather than deleting the penalties. 4. We have heard the rival submissions and have also perused the material on record. It is undisputed that in both the years under consideration the quantum addition on account of enhancement by the Ld. CIT (A) with respect to disallowance u/s 40 (a)(ia) of the Act has been deleted by the Tribunal in ITA nos. 3612 and 3613/Del/2017 and, therefore, since the im....