Saimandeep Industries of India , Ghaziabad V. AO-Ward-51(92), Faridabad

ITA 1372/DEL/2022

AI Insights

The case involves Saimandeep Industries of India appealing against a penalty imposed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, concerning the Assessment Year 2012-2013. The penalty was based on estimated additions towards bogus purchases amounting to Rs. 3,79,520. The appellant contested the penalty, arguing that the purchases in question did not pertain to the relevant assessment year and that the transactions were supported by documentary evidence. The CIT(A) upheld the penalty, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal found the imposition of the penalty unsustainable in law, referencing similar cases and precedents where penalties under similar circumstances were struck down.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 121645 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 18-07-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 06-06-2022
• Other Referred Cases: Vijay Proteins Ltd. vs. CIT, Sanjay Oil Cake Industries vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 27; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G” DELHI BEFORE CHANDRA MOHAN GARG, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER I.T.A. No.1372/DEL/2022 Assessment Year 2012-2013 Saimandeep Industries of India, Industrial Plot No.99, Sector-23 Faridabad-121005, Haryana. Vs. ITO, NFAC, Delhi. TAN/PAN: AADFS8283L (Appellant) (Respondent) Appellant by: Shri Rakesh Garg, Adv. Shri Ankit, CA Respondent by: Ms. Meenakshi Dohre, Sr.DR Date of hearing: 19 07 2023 Date of pronouncement: 18 10 2023 O R D E R PER PRADIP KUMAR KEDIA, A.M.: T he c a pt i o ne d a p p e al h a s be en fi l e d a t th e i n s t a n c e o f t he A sse s se e a ga in st t h e o rd e r o f t he C o m mi ss i o n e r o f In c o m e T a x (A p pe al s) -N a ti o n a l F ac e l e s s A ppe a l Ce nt r e ( N F A C ), [‘ C I T (A )’ i n sh o rt ] da t e d 1 1. 0 5 . 202 2 ar i s in g fr o m t he p e na l t y o rd e r d at e d 11 . 0 1. 2 0 2 2 p a ss ed by t he A ss e s si ng O f fi c e r (A O ) u n de r S ec t i o n 27 1 (1 )( c ) o f t h e I nc o m e T ax A c t , 1 9 6 1 ( t he A c t ) c o nc e r ni ng A Y 20 1 2- 13. 2. A s pe r i t s g ro un d s o f a pp e a l , t h e a s s es s ee ha s ch a l l e ng e d t he i mp o si t i o n o f pe n a l t y o f Rs. 1, 1 7, 27 1/ - o n a cc ou nt of es t i m a t e d a dd i t i o ns t ow a r d s b og us pu rc ha se s o f R s. 3, 79 , 5 20 / -. I.T.A. No.1372/Del/2022 2 3. Br i e f ly s ta t e d, t h e a s se s se e fi le d i t s r e t ur n o f i nc o m e at Rs. 8 3 , 590 / -. T he r e t u rn f i l e d by t h e ass e s se e w a s re o pe ne d un de r S ec t i on 14 7 o f t h e A ct h a v i n g r e g a rd t o t h e ce r t a i n i n fo r ma t io n ob t a i ne d fr o m t h e I n ve st ig a t i o n W i n g o f t h e I nc o m e T a x D ep a r t me n t t ha t t he a s se ss ee is be ne fi c i a r y o f ce rt a i n a c c o m mod a t i o n e n t ri e s o f bo g u s p u rc ha s e s. Th e a s se s se e i n t h e c ou r se o f re -asse ss me nt pr o c e e d i n g s cl a i m e d t o h a v e f i l e d do c u m e n t a ry e vi d en c e s su ch a s pu r c h a s e b il l s, w ei gh sli p , st oc k r eg i st e r, ba n k sta t e me nt , co py o f a cc ou nt o f t h e p a rt i e s, n a m e ly , A pe x A ss o c i a t es a n d S up re me En t er pr i s e s. T he A sse ss i n g O f fi c er e s ti m a t e d 1 2 % o f t h e p u r ch as e s a s u n e x pl a i n e d a n d a c c or d i n gl y a l l e ge d c on c e al m e n t o f i n c o me at Rs. 3, 7 9, 5 2 0 / - on a t ot a l p u r c h a s e o f Rs. 3 1, 62 , 66 7 / - f ro m t h e se pa r t i e s. T he pe na l t y p r oc e e di ng s w e r e i n vo ke d a n d 10 0 % p e n a l t y w as i mp o s ed o n t h e i mp u gn ed e st i m at e d a dd i t i o ns a t R s. 1 , 1 7, 27 1/ -. 4. In t h e f i r st a pp e a l , t h e a s se sse e di d n ot g e t a ny r e l i e f f r o m t h e CI T ( A ). H en c e t h i s a pp e a l . 5. W e h a v e c a re fu l l y c o n s id er e d t h e ri va l s su b m i s sio ns a n d pe r u s ed t h e or de r s o f t h e a u th or it i e s b e l ow . T h e c on t r o v e r s y i nv o l v e s i m po si ti on o f p e n a l t y u nde r S e c t i o n 2 7 1 (1 )( c ) o n di s a l l o w a n c e s c ar r i e d o u t t o w ar d s b o gu s p u r ch as e s in t he r e a l m o f e st i m at i o n s. W e st ra i gh t a w a y not e t h a t i n o r de r t o at t r a c t p e n al t y un d e r S e ct i o n 2 71 ( 1) ( c ) o f th e A c t , i t is n ec e s sa ry t h a t th er e m u st be c on c e al m e n t by t he a ss e s se e o f p a rt ic u la rs o f i t s inc o m e o r fu r ni sh i n g o f i na c c u ra t e p ar ti c ul a r s o f i n c o me p e r s e. N e ed l e s s t o sa y, b e for e p e n a l t y c an b e i mp o se d, t he e nt i r e t y o f c i rc u m st a n c e s mu st r e a s on ab l y p oi n t to t h e c o n c l u si o n t h a t t he d is pu te d a mo un t re p r e se n t s in co me a nd t h e a s se s s ee h as co nc ea l e d t he pa r ti c ul a r s t he re o f o r fu rn i s h e d i n a c c ur a t e p a r t ic ul a rs. T h e d is al l ow a nc e i n t h e i ns t a n t ca se i s on e s t i ma t ed ba s i s on th e p re su m p t io n t h at I.T.A. No.1372/Del/2022 3 e xp e n d i t u r e i n c u rr ed i s e x c e s si ve h av i n g r eg ar d t o n at u r e an d bu s in es s a c t i vi t y o f a s se ss ee a nd a l s o ha vi n g r e g ard t o th e n on - a va il a b i l i t y o f c og e n t e vi de nc e s t o s up por t p u r c ha se s. S i g n i f i c a n t l y, t he a s se s se e , i n t h e in s t a n t c a s e , ha s i n te r a li a po i n te d o ut t h a t t h e pu r c h a s es d o n o t b e l on g t o t h e A s s e ss m e nt Y e a r 2 0 1 2- 13 in q ue st io n bu t t h e a m o un t o u t s ta nd i n g a ga i n s t t he re s pe c t i v e su p pl ie r s a re op e n i n g ba la n ce s d ur i ng t he y e a r t he r e fo re , n o e x pend i t u re h as b e e n i nc ur r e d t ow a r ds b og u s pu r c h a s es i n t he y e a r. We obse r ve t h a t o n t hi s p o i n t al o n e , t h e i m p o si ti o n o f pe na l t y t ow a rd s d i s a l lo w an c e o f bo g u s p ur c h a s e s a ff e c t ed d ur i n g t he y e a r i s u ns u s t ai na b l e i n l aw . 6. W e a l s o ta ke g ui da nc e fr o m t he j ud g me nt r en de r e d i n t he c a se o f V i j a y P r ot e in s L t d. v s. C IT ( 20 15 ) ta xm a n n. c om 4 4 (G uj . ) a n d Sa n j a y O i l C ak e I n d u st r i e s ( 20 0 9 ) 31 6 IT R 27 4 (G u j .) w he re i n t h e pe n a l ty i m po se d u n de r S e c t i o n 2 71 (1) ( c ) w a s st ru c k dow n i n s i mi l a r c ir cu ms t a nc e s o f e s t i ma t ed d i s a ll ow a n c e t ow a rd s b o gu s pur c ha se s. 7. T h us se e n fro m a n y a n gl e , t h e pe na l t y i m po sed i s un su st ai n ab le i n l aw . 8. W e t hu s se t a si de t he or d e r o f t he C IT (A ) a n d dir e c t t h e A sse s si n g O ff i c e r t o r e v e r se th e p e na lt y i mp os e d i n qu e s t i o n. 9. In t h e r e s ul t , t h e a p p ea l o f t h e a s se ss e e i s a llow e d . Order pronounced in the open Court on 18/10/2023 Sd/- Sd/- [CHANDRA MOHAN GARG] [PRADIP KUMAR KEDIA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: /10/2023 Prabhat