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2012 (9) TMI 558 - ITAT DELHIPenalties u/s. 271(1)(C) - disallowing the commission paid by the company - CIT(A) deleted the levy - Held that:- Addition in this case has been primarily made on the basis of statement given by Mr. Meattle and Jhunjhunwala, Directors of the company as during the course of penalty proceedings assessee company requested the AO to cross examine both the directors whose statement was relied upon by the AO in disallowing the commission paid by the company. As agreeing with the CIT(A)’s observation that penalty proceedings is separate proceedings and AO should have allowed cross examination of both the persons which has been denied due to time baring matter when the set aside order was passed on 25.3.1996. Thus, the whole assessment / reassessment is based upon the statement of two persons mentioned above and no opportunity was allowed in the penalty proceedings to cross examine them. Thus penalty levied without allowing opportunity to the company for cross examination of both the persons are liable to be cancelled As assessee company has given documents in support of the commission payments and the payments have been made by account payee cheques also & in the penalty proceedings assessee was not sought opportunity to cross examine those two persons, the same was not provided by the Assessing Officer no levy of penalty u/s. 271(1)(c) can be warranted - in favour of assessee
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