The Pr. Commissioner Of Income Tax-6 v. Menlo Wordlwide Forwarding India Pvt. Ltd

$~3 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 891/2016, CM APPL. 45970/2016 (delay) THE PR. COMMISSIONER OF INCOME TAX-6..... Appellant Through Mr. Ruchir Bhatia, Sr. St. Counsel andMr. Puneet Rai, Jr. St. Counsel. versus MENLO WORDLWIDE FORWARDING INDIA PVT. LTD. ..... Respondent Through None. CORAM:HON'BLE MR. JUSTICE S. RAVINDRA BHATHON'BLE MR. JUSTICE NAJMI WAZIRIO R D E R%10.01.2017 1.The question of law urged by the Revenue in this appeal underSection 260A of the Income Tax Act, 1961 is whether the direction todelete the penalty in the circumstances of the case is justified. TheAO had inter alia held that certain amounts ought to have beendeducted by virtue of Section 194J and non compliances of which,resulted in an adverse order and disallowance under Section 40(a)(i)of the Income Tax Act.Consequent to this disallowance, penaltyproceedings were initiated culminating in an adverse order. The maindisallowance was carried in appeal to the CIT(A) who granted therelief. The ITAT confirmed that order. It is pointed out by theITA 891/2016Page 1 of 2 Revenue, at the outset, that its appeal against the deletion of disallowance is pending on the file of the Court. 2. The present proceedings emanate out of the penalty imposed by the AO. The CIT(A) took note of the same in the intervening periodas well as of the judgment of the Supreme Court in K. C. Builders v.ACIT [2004] 265 ITR 562 (SC) and deleted the penalty. The ITAThas confirmed that order. 3.As is evident from the factual narrative, the primary question ofdisallowance itself was debatable – in appeal to the ITAT the assesseewas successful. In the circumstances, the deletion of the penalty bythe CIT(A) and the ITAT cannot be called unreasonable, justifyinginterference by this Court. Therefore, no substantial question of lawarises. The appeal is dismissed. S. RAVINDRA BHAT, J JANUARY 10, 2017/acm NAJMI WAZIRI, J