2019 (6) TMI 918 - AT - Income Tax

Rectification u/s 254 - levy of penalty u/s 271(1)(c) - HELD THAT - We find that Tribunal 2016 (11) TMI 1623 - ITAT MUMBAI only set aside the findings of CIT(A) on the issue of disallowance of commission expenses and directed AO to decide the matter afresh. Brief facts as emanates from record are that the assessee has suffered quantum addition on account of commission for 147.45 Lacs which was contested by assessee before the Tribunal wherein the matter was restored back to the file of Ld. AO for fresh consideration. However the penalty levied by AO u/s 271(1)(c) was deleted by CIT(A) which was contested by the revenue in M/S ALLWILER INDIA PVT. LTD. 2018 (12) TMI 1658 - ITAT MUMBAI wherein the same was also restored back keeping in view the fact that quantum additions were also restored back by the Tribunal. We do not find any infirmity in the same and the decision was quite logical one because the penalty appeal was filed by the revenue and not by the assessee since the penalty was already deleted by Ld.CIT(A). Therefore the said order in our opinion would require no interference on our part. As the quantum order has been passed by Ld. AO u/s 143(3) r.w.s. 254 on 31/12/2017 wherein same addition has been repeated and fresh penalty proceedings has been initiated. The same is also in order since the earlier penalty order would not survive and the only penalty which survive against the assessee would be pursuant to this order only. The miscellaneous application for AY 2008-09 stand dismissed. AY 2010-11 - the revenue agitated that relief granted by fits appellate authority qua commission expenditure. The same was also restored back to the file of Ld. AO for re-adjudication. The plea of Ld. AR is that rendering of service has not been doubted by Ld. AO and secondly similar issue agitated by revenue for AYs 2012-13 2013-14 has been dismissed in M/S TUSHACO PUMPS PVT. LTD. 2019 (2) TMI 1648 - ITAT MUMBAI No prejudice has been caused to the assessee by way of restoration of issue to the file of Ld. AO and the assessee is free to substantiate his stand in any manner. Secondly the cited order of the Tribunal is subsequent to the order under question - no mistake apparent from record the application stands dismissed. .

Summary

Issues:
1. Recall of common order of Tribunal ITA Nos. 1409 & 1410/Mum/2016 dated 11/12/2018 for Assessment Years 2008-09 & 2010-11.
2. Levy of penalty u/s 271(1)(c) for AY 2008-09.
3. Restoration of issue of commission expenditure for AY 2010-11.

Analysis:
1. The assessee sought a recall of the Tribunal's order for AY 2008-09, concerning the levy of penalty u/s 271(1)(c). The Tribunal had set aside the findings of the Ld. CIT(A) on the disallowance of commission expenses and directed the Ld. AO to reconsider the matter. The quantum addition was contested, leading to the penalty being deleted by the Ld. CIT(A). The Tribunal logically restored both the quantum addition and the penalty, as the penalty appeal was filed by the revenue. The Tribunal found no reason to interfere with this decision, as the penalty proceedings would not survive due to the original assessment order being set aside.

2. The quantum order for AY 2008-09 was passed by the Ld. AO, repeating the same addition and initiating fresh penalty proceedings. This action was deemed appropriate since the earlier penalty order would not stand, and any penalty would be based on this new order only. The miscellaneous application for AY 2008-09 was dismissed accordingly.

3. For AY 2010-11, the revenue contested the relief granted by the appellate authority regarding commission expenditure, leading to the issue being restored to the Ld. AO for re-adjudication. The Ld. AR argued that the service rendered was not in doubt, and similar issues raised for other assessment years were dismissed by the ITAT in a subsequent order. The Tribunal found no prejudice to the assessee due to the issue being sent back to the Ld. AO and allowed the assessee to substantiate their position. As the cited Tribunal order was subsequent to the one in question, the application was dismissed, with no apparent mistake found in the record.

In conclusion, both applications were dismissed, and the Tribunal's decisions regarding the penalty and commission expenditure issues for the respective assessment years were upheld.