ITO 29(1)(4), Mumbai V. M/S GREENGLOBE FUEL SOLUTIONS, Mumbai

ITA 2399/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 0341 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 16-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAVIT A PUNEET KAUSHIK
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC III BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER I TA NO. 2399 & 2400 /MUM. /2019 ( ASSESSMENT YEAR : 20 10 11 AND 2011 12 ) INCOME TAX OFFICER WARD 2 9 (1)( 4 ), MUMBAI . APPELLANT V/S M/S. GREENGLOBE FUEL SOLUTIONS 19, ANUPAM INDL. ESTATE NO.2 OPP. RALLIWOLF, LBS MARG MULUND (W), MUMBAI 400 082 PAN AAHFG9723D . RESPONDENT REVENUE BY : S MT. KAVIT A PUNEET KAUSHIK ASSESSEE BY : SHRI ADITYA RAMCHANDRAN DATE OF HEARING 1 5 . 0 6 .20 20 DATE OF ORDER 19.06.2020 O R D E R TH E CAPTIONED APPEAL S HAVE BEEN FILED BY THE REVENUE CHALLENGING TWO SEPARATE ORDER S , BOTH DATED 25 TH JANUARY 2019 , PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 39 , MUMBAI, DELETING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) AMOUNTING TO ` 3,06,257 FOR THE A.Y. 2010 11 AND ` 47,716, FOR THE A.Y. 2011 12 . 2. BRIEF FACTS ARE, THE ASSESSEE , A PARTNERSHIP FIRM , IS ENGAGED IN THE BUSINESS OF SUPPLY OF FUEL KITS, RCC BLOCK, CEMENT SLABS, ETC. FOR THE ASSESSMENT YEARS UNDER DISPUTE, THE ASSESSEE FILED ITS RETURNS OF 2 SHRI ANIL NARAYAN LOKRE INCOME IN REGULAR COURSE. INITIALLY, THE RETURNS OF INCOME FILED WERE PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX AUTHORITIES THROUGH THE DGIT (INV.), MUMBAI, THAT THE ASSESSEE IS A BENEFICIARY OF ACCOMMODATION BILLS PROVIDED BY THE HAWALA OPERATOR S, THE ASSESSING OFFICER RE OPENED THE ASS ESSMENTS UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE PURCHASES WORTH ` 79,28,981, AND ` 12,35,000, CLAIMED TO HAVE BEEN MADE DURING THE RELEVANT ASSESSMENT YEARS, WHICH ACCO RDING TO THE INFORMATION RECEIVED, WERE NON GENUINE. THOUGH, THE ASSESSEE FILED PURCHASE BILLS AND SOME OTHER DOCUMENTARY EVIDENCES TO PROVE THE GENUINENESS OF THE PURCHASES, HOWEVER, THE ASSESSIN G OFFICER WAS NOT CONVINCED WITH THE SAME AND CONCLUDED THAT SUCH PURCHASES ARE NON GENUINE. THEREAFTER, REJECTING THE BOOKS OF ACCOUNT OF THE ASSESSEE, THE ASSESSING OFFICER PROCEEDED TO DISALLOW 12.5% OUT OF THE ALLEGED NON GENUINE PURCHASES IN BOTH THE ASSESSMENT YEARS UNDER DISPUTE AND ADDED BACK AN AMOUNT OF ` 9,91,123 IN A.Y. 2010 11 AND ` 1,54,421 IN A.Y. 2011 12. ON THE BASIS OF SUCH ADDITION S , THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ALLEGING FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONCEALMENT OF INCO ME. THOUGH, THE ASSESSEE FILED ITS EXPLANATION OBJECTING TO THE INITIATION OF PENALTY PROCEEDINGS, HOWEVER, THE ASSESSI NG OFFICER 3 SHRI ANIL NARAYAN LOKRE PROCEEDED TO PASS ORDERS IMPOSING PENALTY UNDER SECTION 271(1)(C) OF THE ACT IN BOTH THE ASSESSMENT YEARS UNDER DISPUTE , AS AL READY DISCUSSED IN THE EARLIER PART OF THE ORDER. BEING AGGRIEVED WITH THE PENALTY ORDE RS SO PASSED, THE ASSESSEE PREFERRED APPEALS BEFORE THE FIRST APPELLATE AUTHORITY. 3. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE IN THE CONTEXT OF FA CTS AND MATERIA LS ON RECORD, LEARNED COMMISSIONER (APPEA LS) DELETED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT IN BOTH THE ASSESSMENT YEARS UNDER CONSIDERATION. 4. I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON A PERUSAL OF THE ASSES SMENT ORDERS, IT IS EVIDENT THAT THOUGH THE ASSESSING OFFICER TREATED CERTAIN PURCHASES MADE BY THE ASSESSEE IN THE RELEVANT ASSESSM ENT YEARS TO BE NON GENUINE, HOWEVER, HE RESTRICTED THE DISALLOWANCE TO 12.5% OF THE AL LEGED NON GENUINE PURCHASES. THIS VER Y ACTION OF THE ASSESSING OFFICER MAKES IT CLEAR THAT THE ASSESSING OFFICER HAS ENTERTAIN ED DOUBT ONLY WITH REGARD TO THE SOURCE OF PURCHASES MADE AND NOT THE PURCHASES ITSELF. IT IS FURTHER RELEVANT TO OBSERVE , EVEN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER IS PURELY ON ESTIMATE BASIS. THUS, IN THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME LEADING TO CONCEALMENT OF INCOME. THAT BEING THE CAS E, IN MY CONSIDERED OPINION, LEARNED COMMISSIONER 4 SHRI ANIL NARAYAN LOKRE (APP EALS) WAS JUSTIFIED IN DELETING THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT IN BOTH THE ASSESSMENT YEARS UNDER DISPUTE. HAVING HELD SO, I INTEND TO DEAL WITH ANOTHER ASPECT OF THE ISSUE. AS NOTED ABOVE, THE QUANTUM OF PENALTY IMPOSED IN BOTH THE ASSESSMENT YEARS IS MUCH LESS THAN THE AMOUNT OF ` 50 LAKH, THE THRESHOLD MONETARY LIMIT FIXED BY THE CENTRAL BOARD OF DIRECT TAXES FOR CONTESTING APPEALS BY THE DEPARTME NT AS PER CIRCULAR NO.17 OF 2019 , DATED 8 TH AUGUST 20 19. THUS, THE PRESENT APPEALS BY THE REVENUE ARE ALSO COVERED UNDER THE AFORESAID CIRCULAR, HENCE, NOT MAINTA INABLE. IN VIEW OF THE AFORESTATED REASONS, I HAVE NO HESITATION IN U PHOLDING THE ORDERS PASSED BY THE LEARNED COMMISSIONER (APPEALS). 5. IN THE RESULT, REVENUES APPEALS ARE DISMISSED. ORDER PRONOUNCED THROUGH CIRCULATION IN THE NOTICE BOARD UNDER RULE 34(4) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 ON SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 22.06.2020 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE C I T(A); (4) THE C I T, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY