Kirankumar Keshavlal Shah, Pune V. Assistant Commissioner of Income-tax, Circle - 1(2), Pune

ITA 2357/PUN/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9693 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-03-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 09-10-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VITTHAL BHOSALE
• Keywords: Bogus purchase; Principle of natural justice; Assessment record
• Section: 271(1)(c); 14A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE (THROUGH VIRTUAL COURT) BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PARTHA SARATHI CHAUDHURY, JM . / ITA NO.2357/PUN/2017 / ASSESSMENT YEAR : 2011-12 KIRANKUMAR KESHAVLAL SHAH, SAMPATTI SOAP FACTORY, 184, GURUWAR PETH, PUNE-411016. PAN : ADIPS7941K ....... / APPELLANT / V/S. ACIT, CIRCLE-1(2), PUNE. / RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI VITTHAL BHOSALE / DATE OF HEARING : 25.03.2021 / DATE OF PRONOUNCEMENT : 05.04.2021 / ORDER PER INTURI RAMA RAO, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 4, PUNE (CIT(A) FOR SHORT) DATED 25.04.2017 FOR THE ASSESSMENT YEAR 2011-12. 2. THE APPELLANT RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE LEARNED ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1 (2), PUNE HAS ERRED IN IMPOSING PENALTY OF RS. 3,58,942/- UNDER SECTION 271(1)(C) OF THE ACT AND THE COMMISSIONER OF INCOME TAX (APPEALS)-4, PUNE, HAS ERRED IN CONFIRMING THE SAME. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-4, PUNE HAS NOT FOLLOWED THE PRINCIPAL OF NATURAL JUSTICE; HENCE THE PENALTY ORDER PASSED DATED 25.04.2017 IS BAD IN LAW. 3. ON MERITS, WHEN THE ASSESSEE IS NOT LIABLE FOR PENALTY UNDER SECTION 271(1)(C) OF THE ACT, THERE HAS BEEN (A) AN ERROR OF IMPOSING PENALTY AND 2 ITA NO.2357/PUN/2017 (B) ERROR OF CONTINUING PENALTY IN RESPECT OF ADDITIONS/DISALLOWANCES THAT ARE VACATED BY THE APPELLATE AUTHORITY. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 3. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE APPELLANT IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF MANUFACTURING OF CLEANING MATERIALS. THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011-12 WAS FILED ON 30.09.2011 DECLARING TOTAL INCOME OF RS.1,69,95,078/-. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED BASED ON THE INFORMATION RECEIVED FROM MAHARASHTRA SALES TAX DEPARTMENT THAT THE APPELLANT IS ONE OF THE BENEFICIARIES OF BOGUS INVOICES BY ISSUING OF NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 (THE ACT) ON 22.03.2013. SUBSEQUENTLY, THE ASSESSMENT WAS COMPLETED BY THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-11(1), PUNE VIDE ORDER DATED 21.03.2014 AT A TOTAL INCOME OF RS.1,83,80,000/- AFTER DISALLOWING (I) BOGUS PURCHASES OF RS.11,61,625/-, (II) DISALLOWANCE U/S 14A OF RS.3,301/- AND (III) DISALLOWANCE UNDER THE HEAD COMMISSION OF RS.2,20,000/-. THE ASSESSING OFFICER ALSO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. HOWEVER, IT APPEARS THAT THE APPELLANT HAD NOT RESPONDED TO THE SHOW-CAUSE NOTICE, THEREFORE, THE ASSESSING OFFICER HAD PROCEEDED TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT VIDE ORDER DATED 22.09.2014 CHARGING THE APPELLANT FOR CONCEALMENT OF PARTICULARS OF INCOME. 4. BEING AGGRIEVED BY THE ABOVE PENALTY ORDER, AN APPEAL WAS PREFERRED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER CONFIRMED THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 5. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE APPELLANT IS BEFORE US IN THE PRESENT APPEAL. 6. EVEN BEFORE US, WHEN THE MATTER WAS CALLED ON, NONE APPEARED ON BEHALF OF THE APPELLANT DESPITE DUE SERVICE OF NOTICE. THEREFORE, WE PROCEEDED TO DISPOSE THE SAME AFTER HEARING THE LD. SR. DR. 3 ITA NO.2357/PUN/2017 7. WE HEARD THE LD. SR. DR AND PERUSED THE MATERIAL ON RECORD. IT IS EVIDENT FROM THE IMPUGNED ORDER THAT THE LD. CIT(A) HAD MERELY CONFIRMED THE LEVY OF PENALTY TAKING INTO NOTE THAT THE QUANTUM APPEAL BEFORE THE LD. CIT(A) CAME TO BE DECIDED ON 16.02.2017, HOWEVER, WITHOUT GOING INTO THE ASSESSMENT RECORD TO FORM AN OPINION THAT WHETHER OR NOT THE APPELLANT IS GUILTY OF CONCEALMENT OF PARTICULARS OF INCOME. THE LD. CIT(A) MERELY PLACING RELIANCE ON THE EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AND WITHOUT GOING INTO THE ISSUE WHETHER OR NOT THE ASSESSING OFFICER HAD JUSTIFIED TO FORM AN OPINION THAT THE APPELLANT IS GUILTY OF CONCEALMENT OF PARTICULARS OF INCOME, CONFIRMED THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN THE CIRCUMSTANCES, WE REMAND THE MATTER BACK TO THE FILE OF THE LD. CIT(A) FOR ADJUDICATING DE NOVO IN ACCORDANCE WITH LAW. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 05 TH DAY OF APRIL, 2021. SD/- SD/- (PARTHA SARATHI CHAUDHURY) (INTURI RAMA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 05 TH APRIL, 2021. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-4, PUNE. 4. THE PR. CIT-3, PUNE. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.