M/S BAJRANG CONVEYORS, BILASPUR V. INCOME TAX OFFICER, 2(1), BILASPUR

ITA 185/RPR/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5638 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 19-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 68; 271(1)(c); 143(3); 22

Judgement Text

आयकरअपीलȣयअͬधकरणÛयायपीठरायप ु रमɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR (Through Virtual Court) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI JAMLAPPA D BATTULL, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 185/RPR/2017 Ǔनधा[रण वष[ / Assessment Year : 2009-10 M/s. Bajrang Conveyors 28, Sector-C, Industrial Area, Sirgitti, Bilaspur (C.G.) PAN : AAFFB2255F .......अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer-2(1), Bilaspur (C.G.) ......Ĥ×यथȸ / Respondent Assessee by : Shri G.S. Agrawal, AR Revenue by : Shri Shravan kumar Meena, DR 2 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 स ु नवाई कȧ तारȣख / Date of Hearing :11.03.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 30.03.2022 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeal), Bilaspur, dated 02.03.2017, which in turn arises from the order passed by the A.O under Sec. 271(1)(c) of the Income-tax Act, 1961 (in short ‘the Act’) dated 24.06.2014 for assessment year 2009-10. Before us the assessee has assailed the impugned order on the following grounds of appeal: “1. That under the facts and the law, the learned CIT(Appeals) erred in confirming the order of learned AO levying penalty U/s.271(1)(c) at Rs.11,15,482/- which kindly be deleted. 2. That under the facts and the law, the learned CIT(Appeals) erred in confirming the impugned penalty order passed by the learned AO which was passed without allowing opportunity to the appellant as the notice issued by the learned AO did not specify the default. 3. That under the facts and the law, the learned Commissioner of income tax (Appeals) erred in confirming the penalty on account of additions made by the learned Assessing Officer by treating Rs.27,49,190/- received in advance for supply of goods as bogus trading liability and Rs.8,60,783/- as suppressed sales by rejecting the explanations. 3 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 Prayed that Rs.27,49,190/- is not bogus liability and Rs.8,60,783/- is not suppressed sales and that all the facts were disclosed, prayed that levy of penalty is by rejecting the explanation and relying on 3 rd party version without having material on record and is unjustified and be deleted. 4. That the learned AO/CIT(A) also erred in not keeping the penalty proceedings/appeal pending till disposal of appeal in quantum filed before the learned CIT(A)/ Hon’ble ITAT Raipur Bench respectively, thus promoting litigation on same issue. Prayed to set aside the order of learned CIT(A).” 2. Succinctly stated, the assessee firm which is engaged in the business of manufacturing of Conveyor rollers, Idlers rollers & system and job works had on 30.09.2009 e-filed its return of income for the assessment year 2009-10, declaring an income of Rs. 1,89,740/-. Original assessment was framed by the Assessing Officer vide his order passed u/s. 143(3) of the Act, dated 30.12.2011 determining its total income at Rs.38,50,320/- after, inter alia, making the following additions/disallowances : Sl. No. Particulars Amount 1. On account of advances/liability Rs.27,49,190/- 4 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 3. On appeal, the CIT( Appeals) vide his order dated 20.08.2013 upheld the view taken by the Assessing Officer. 4. After disposal of the quantum appeal by the CIT(Appeals), the Assessing Officer vide his order passed u/s. 271(1)(c) of the Act, dated 24.06.2014 imposed a penalty of Rs.11,15,482/- qua the aforesaid additions/disallowance which were made by the Assessing Officer while framing the assessment and thereafter had been upheld by the CIT (Appeals). 5. Aggrieved, the assessee assailed the order passed by the Assessing Officer u/s. 271(1)(c) of the Act, dated 24.06.2014 before the CIT(Appeals), but without any success. 2. On account of suppression of sale Rs.8,60,783/- 3. On account of expenses claimed in Manufacturing account Rs.50,000/- 5 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 6. The assessee being aggrieved with the order of the CIT(Appeals) sustaining the penalty imposed by the Assessing Officer u/s.271(1)(c) of the Act has carried the matter in appeal before us. 7. At the very outset of the hearing of appeal, it was submitted by Mr. G.S Agrawal, Ld. Authorized Representative (for short ‘AR’) for the assessee, that the Tribunal while disposing off the assessee’s quantum appeal for the year under consideration had vide its order passed in ITA No.01/RPR/2014, dated 15.01.2018 restored the issue to the file of the Assessing Officer with a direction to re-adjudicate the additions made by him qua two of the issues, viz. (i) addition towards suppression of sale : Rs.8,60,783/-; and (ii) addition u/s. 68 of bogus trading liability : Rs. 27,49,796/-. It was submitted by the Ld. AR that the Assessing Officer had thereafter vide his order passed u/s. 143(3) r.w.s 254 of the Act, dated 30.12.2019 accepted the assessee’s claim and not made any addition as regards both of the aforementioned issues, viz. (i) addition towards suppression of sale: Rs.8,60,783/- and (ii) addition u/s.68 of bogus trading liability: Rs.27,49,796/-. In order to buttress his aforesaid claim the Ld. AR has drawn our attention to 6 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 the order of the Tribunal in ITA No. 01/RPR/2014, dated 15.01.2018 (Page 1 to 5 of the APB) and the order passed by the AO in the course of the set-aside quantum proceedings i.e, u/s.143(3) r.w.s 254 of the Act, dated 30.12.2019 (Page 6 to 22 of the APB). 8. In so far the addition of Rs.50,000/- that was made by the Assessing Officer in the course of original assessment i.e., as regards the manufacturing expenses which could not be verified for want of proper vouchers and verification, it was submitted by the Ld. AR that though the said addition was sustained by the Assessing Officer while framing the assessment vide his order u/s.143(3) r.w.s. 254, dated 30.12.2019, however, as the same was merely in the nature of disallowance of expenses on an ad-hoc basis, therefore, no penalty as regards the same could be validly imposed/sustained. Backed by his aforesaid contention it was submitted by the Ld. AR that penalty imposed by the Assessing Officer u/s. 271(1)(c) of the Act may be vacated. 7 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 9. Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 10. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, as stated by the Ld. AR, and rightly so, the aforesaid two additions, viz. (i) addition towards suppression of sale : Rs.8,60,783/-; and (ii) addition u/s. 68 of bogus trading liability : Rs.27,49,796/- which were initially made by the Assessing Officer, had pursuant to the matter being set-aside by the Tribunal to the file of the Assessing Officer for fresh adjudication vide its order passed in ITA No. 01/RPR/2014; dated 15.01.2018, does no more survive, as the explanation of the assessee as regards both of the issues was accepted by the Assessing Officer in the course of the set-aside proceedings, therefore, penalty that was imposed u/s. 271(1)(c) of the Act as regards the said issues have to meet the same fate and has to be knocked down. 8 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 11. As regards the imposition of penalty u/s.271(1)(c) of the Act on account of ad hoc disallowance out of manufacturing expenses for want of proper vouchers and necessary verification, we are of the considered view, that as the said disallowance was made on an estimate basis and not on the basis of any concrete evidence which would irrefutably prove to the hilt raising of a bogus claim of expenditure by the assessee, therefore, no penalty u/s. 271(1)(c) of the Act as regards the same can be sustained. 12. We, thus, in terms of our aforesaid observations vacate the penalty of Rs.11,15,482/- imposed by the Assessing Officer u/s. 271(1)(c) of the Act. 13. In the result, appeal of the assessee is allowed in terms of our aforesaid observations. Order pronounced in the open Court on 30 th day of March, 2022. Sd/- Sd/- JAMLAPPA D BATTULL RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 30 th March, 2022 SB 9 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeal), Raipur (C.G) 4. The Pr. CIT, Bilaspur (C.G) 5.ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु रबɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 10 M/s. Bajrang Conveyors Vs. ITO ITA No. 185/RPR/2017 Date 1 Draft dictated on 24.03.2022 Sr.PS/PS 2 Draft placed before author 25.03.2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order