ITO ,WARD 3 (5), KALYAN V. JATIN S. GANDHI, MUMBAI

ITA 2019/MUM/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3815 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMATHA M
• Keywords: Bogus purchase; Tax effect
• Section: 271(1)(c)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI C. N. PRASAD , JM & SHRI S. RIFAUR RAHMAN, AM ./ I.T.A. NO . 2019 & 2020 /MUM/2019 ( / ASSESSMENT YEAR: 2009 - 10 & 2010 - 11 ) ITO WARD 3 (5), 2 ND FLOOR, RANI MANSION, MU RBAD ROAD, KALYAN (W), MAHARASHTRA - 421301 / VS. SHRI JATIN S. GANDHI, B - 201, SANSKARDHAM APARTMENTS, AGRA ROAD, KALYAN(W), MAHARASHTRA - 421301 ./ ./ PAN NO. A DZPG0755G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. SAMATHA M, DR / RESPONDENTBY : NONE / DATE OF HEARING : 15.10 .2020 / DATE OF PRONOUNCEMENT : 15.10.2020 / O R D E R PER BENCH : THE PRESENT APPEAL S HAVE BEEN FILED BY THE REVENUE A GAINST THE ORDER OF LD. COMMIS S IONER OF INCOME TAX (APPEALS) 1 IN SHORT REFERRED AS LD. CIT(A) , MUMBAI, DATED 07 .01.2019 FOR A SSESSMENT YEAR (IN SHORT A Y ) 2009 - 10 & 2010 - 11 . 2 I.T.A. NO 2019 & 2020/MUM/2019 SHRI JATIN S. GANDHI 2. AT THE OUTSET, IT IS NOTICED THAT NO NE APPEARED ON BEHALF OF ASSESSEE IN SP ITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. ON THE OTHER HAND, L D. DR IS PRESENT AND IS READY WITH ARGUMENTS. THEREFORE , WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. IT IS NOTICED THAT THE TAX EFFECT OF THE RELIEF GRANTED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) IS BELOW RS. 50 LACS AND AS PER CIRCULAR NO.17 OF 2019 DATED 08.08.2019 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES (CBDT), DEPART MENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, THE CBDT HAS REVISED THE MONETARY LIMIT FOR FILING APPEALS BEFORE THE ITAT FROM THE EXISTING LIMIT OF RS. 20 LACS TO RS. 50 LACS. 4 . FURTHER, WE NOTICE FROM THE RECORD THAT THE DEPARTMENT HAS FILE D THE PRESENT APPEAL CHALLENGING THE ORDER OF LD. CIT(A) IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 5. THE BRIEF FACTS OF THE CASE ARE THAT AO LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF BOGUS PURCHASES MADE BY THE 3 I.T.A. NO 2019 & 2020/MUM/2019 SHRI JATIN S. GANDHI ASSESSEE. ON APP EAL BEFORE LD. CIT(A), LD. CIT(A) HAS DELETED THE PENALTY BY CONSIDERING THAT THE LEVY OF PENALTIES IS MERELY ON DISALLOWANCES OF PURCHASES AND NOT FINDING OF CONCEALMENT OF ANY PARTICULAR TO REDUCE TAXABLE INCOME AND ALSO BY RELYING ON VARIOUS JUDGMENTS, LD. CIT(A) HAS DELETED THE PENALTY AND ALLOWED THE APPEAL FILED BY THE ASSESSEE. 6. AGGRIEVED WITH THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US. 7 . CONSIDERED THE RIVAL SUBMISSION AND MATERIAL PLACED ON RECORD, WE NOTICE FROM THE RECORD THAT THE PRESE NT APPEAL FILED BY THE REVENUE IS BELOW THE MONETARY LIMIT FOR FILING THE APPEALS BEFORE THE ITAT TO RS. 50 LACS VIDE CIRCULAR NO.17 OF 2019 DATED 08.08.2019 ISSUED BY CBDT. 8. FURTHER ON MERIT, WE NOTICE THAT AO LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON ESTIMATION BASIS WITHOUT ANY CONCRETE EVIDENCE OF ACTUAL CONCEALMENT. AS PER THE LAW, THE PROVISIONS OF SECTION 271 (1) (C) OF THE ACT WOULD BE APPLICABLE ONLY WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED 4 I.T.A. NO 2019 & 2020/MUM/2019 SHRI JATIN S. GANDHI INACCURATE PARTICULA RS OF SUCH INCOME. HOWEVER, THE ESTIMATION OF DISALLOWANCE ON BOGUS PURCHASES BY THE AO CANNOT BE TERMED AS EITHER CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 9. WE FIND SUPPORT FROM THE SERIES OF DECISIONS BY DIFFERENT HIGH COURT AS WE LL COORDINATE BENCHES OF ITAT, I.E. IN THE CASE OF COMMISSIONER OF INCOME - TAX V. NORTON ELECTRONICS SYSTEMS (P) LTD. (2014) 41 TAXMANN.COM 280 (ALLAHABAD HC). IT WAS HELD THAT WHEN ADDITION IS MADE ON ESTIMATE BASIS, NO PENALTY IS SUSTAINABLE. 10. WE AL SO RELY UPON THE DECISION IN THE CASE OF ASST. COMMISSIONER OF INCOME - TAX V. VISION RESEARCH MANAGEMENT ('P) LTD. ITAT LUCKNOW (2015) 63 TAXMANN.COM 8 (LUCKNOW TRIB), WHEREIN IT WAS HELD THAT I MPOSITION OF PENALTY UPON ASSESSEE U/S. 271(1)(C) ON BASIS OF A D HOC & ESTIMATED DISALLOWANCE/ADDITION, WITHOUT BRINGING ANY CLINCHING MATERIAL SUGGESTING CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, WAS NOT JUSTIFIED. 5 I.T.A. NO 2019 & 2020/MUM/2019 SHRI JATIN S. GANDHI 11 . AFTER CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES AND WH ILE CONSIDERING THE ABOVE SAID JUDGMENTS, WE ARE OF THE VIEW THAT THERE IS NO ACTIVE CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE AND ADDITIONS MADE ON ESTIMATION BY THE AO DO NOT CALLED FOR INITIATION OF PENALTY. THUS, IN OUR VIEW, THE PENALTY LEVIED BY AO HAS RIGHTLY BEEN DELETED BY LD. CIT(A). ACCORDINGLY, THE GROUND S RAISED BY THE REVENUE ST ANDS DISMISSED. 12 . IN THE NET RESULT, BOTH THE APPEALS FILED BY THE REVENUE STANDS DISMISSED. ORDERS PRONOUNCED IN THE OPEN COURT ON 15.10.2020 . SD/ - SD/ - (S. RIFAUR RAHMAN ) (C. N. PRASAD) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 15.10 . 2020 SR.PS. DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, 6 I.T.A. NO 2019 & 2020/MUM/2019 SHRI JATIN S. GANDHI MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI