DCIT, CIRCLE- 3, THANE V. SIP TOOLS, THANE

ITA 2507/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4472 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2010-2011
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA L D
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3); 13

Judgement Text

ITA NOS.2507 & 2508/MUM/2019 SIP TOOLS ASSESSMENT YEARS: 2010-11 & 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.2507/MUM/2019 ( / ASSESSMENT YEAR: 2010-11) & ./ I.T.A. NO.2508/MUM/2019 ( / ASSESSMENT YEAR: 2011-12) D CIT - CIRCLE - 3 ROOM NO.02, 6 TH FLOOR ASHAR IT PARK, B-WNG WAGLE INDUSTRIAL ESTATE, ROAD NO.16Z THANE(W), THANE-400 0604. / VS. M/S. SIP TOOLS 307, ANANT LAXMI CHAMBERS SHIVAJI NAGAR, NAUPADA THANE(W) . !' ./ ./PAN/GIR NO. AAEFS-8001-K ( '$ /APPELLANT ) : ( %& '$ / RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI T.S. KHALSA- LD. SR. DR / DATE OF HEARING : 01/02/2021 / DATE OF PRONOUNCEMENT : 01/02/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEALS BY REVENUE FOR ASSESSMENT YEA RS [IN SHORT REFERRED TO AS AY] 2010-11 & 2011-12 CONTEST SEPA RATE ORDERS OF LEARNED FIRST APPELLATE AUTHORITY. HOWEVER, THE FAC TS AS WELL AS ISSUES ARE IDENTICAL IN BOTH THE APPEALS AND ADJUDI CATION IN ANY APPEAL SHALL EQUALLY APPLY TO THE OTHER APPEAL ALSO . THE APPEAL FOR ITA NOS.2507 & 2508/MUM/2019 SIP TOOLS ASSESSMENT YEARS: 2010-11 & 2011-12 2 AY 2010-11 CONTEST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-2, PUNE [IN SHORT REFERRED TO AS CIT(A) ], APPEAL NO. 585/2017-18 DATED 29/01/2019 WHICH HAS DELETED PENA LTY OF RS.2.37 LACS AS LEVIED BY LEARNED ASSESSING OFFICER (AO) U/S 271(1)(C) VIDE PENALTY ORDER DATED 31/08/2015. 2. THOUGH NONE APPEARED FOR ASSESSEE BUT THE MATERI AL ON RECORD WAS SUFFICIENT FOR DISPOSAL OF APPEALS AND T HEREFORE, THE MATTER WAS PROCEEDED WITH FOR ADJUDICATION AFTER HE ARING LD. DR, WHO PLEADED FOR RESTORATION OF PENALTY AS LEVIED BY LD. AO. 3. THE IMPUGNED PENALTY STEM FROM THE FACT THAT TH AT AN ASSESSMENT WAS FRAMED AGAINST THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION U/S 143(3) R.W.S. 147 ON 11/02/2015, WHEREIN THE ASSESSEE WAS SADDLED WITH CERTAIN ADDITIONS OF RS.7 .67 LACS ON ACCOUNT OF ALLEGED BOGUS PURCHASES. CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED U/S 271(1)(C) IN THE ASS ESSMENT ORDER AGAINST THOSE ADDITIONS FOR CONCEALING THE PARTICUL ARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. 4. DURING PENALTY PROCEEDINGS, THE ASSESSEE SUBMITT ED THAT PURCHASES WERE GENUINE AND THE PAYMENT WAS MADE TO THE SUPPLIERS THROUGH ACCOUNT PAYEE CHEQUES. THE PURCHA SES REMAINED UNVERIFIABLE DUE TO NON-COMPLIANCE OF PROV ISIONS RELATING TO VAT BY THE SELLING DEALERS AND THEREFORE, THE PE NALTY WAS UNJUSTIFIED. HOWEVER, REJECTING THE SAME, LD. AO LE VIED PENALTY OF RS.2.37 LACS FOR CONCEALMENT OF INCOME AS WELL AS F OR FURNISHING INACCURATE PARTICULARS OF INCOME. 5. UPON FURTHER APPEAL, LD. CIT(A), RELYING UPON TH E DECISION OF HONBLE APEX COURT IN CIT V/S SSAS EMERALD MEADOWS 386 ITR ITA NOS.2507 & 2508/MUM/2019 SIP TOOLS ASSESSMENT YEARS: 2010-11 & 2011-12 3 13 AS WELL AS THE DECISION OF HONBLE KARNATAKA HIGH C OURT IN CIT V/S MANJUNATHA COTTON AND GINNING FACTORY 359 ITR 5 65, HELD THAT LD. AO FAILED TO SPECIFY THE EXACT CHARGE AGAI NST THE ASSESSEE FOR WHICH THE ASSESSEE WAS BEING PENALIZED. THERE W AS LACK OF CLARITY IN CORRECT APPLICATION OF SPECIFIC CHARGE I .E. CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME AND THEREFORE, THE PENALTY WAS TO BE DELETED. AGGRIEVED , THE REVENUE IS IN FURTHER APPEAL BEFORE US. 6. UPON DUE CONSIDERATION OF IMPUGNED ORDER, WE CON CUR WITH THE CONCLUSION OF LD. CIT(A) THAT THERE WAS FAILURE ON THE PART OF LD. AO TO SPECIFY EXACT CHARGE FOR WHICH THE ASSESSEE W AS BEING PENALIZED. THERE WAS LACK OF CLARITY IN CORRECT APP LICATION OF SPECIFIC CHARGE I.E. CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE FAILURE TO DO SO WOULD V ITIATE PENALTY PROCEEDINGS IN TERMS OF BINDING JUDICIAL PRECEDENTS AS RELIED UPON BY LD. CIT(A). THEREFORE, NO FAULT COULD BE FOUND I N THE IMPUGNED ORDER IN CANCELLING THE PENALTY. THE APPEAL STAND D ISMISSED. 7. SINCE THE FACTS AS WELL AS ISSUES ARE IDENTICAL IN REVENUES APPEAL FOR AY 2011-12, OUR ADJUDICATION AS ABOVE SH ALL MUTATIS MUTANDIS APPLY TO THIS YEAR ALSO. THE APPEAL STAND DISMISSED . 8. BOTH APPEALS STANDS DISMISSED. ORDER PRONOUNCED ON 01 ST FEBRUARY, 2021. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 01/02/2021 SR.PS, KASARLA THIRUMALESH ITA NOS.2507 & 2508/MUM/2019 SIP TOOLS ASSESSMENT YEARS: 2010-11 & 2011-12 4 / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. - ( ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./% ( 0 , 0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.