M/s. Sanarch Sales and Services Pvt. Ltd., Pune V. Income-tax Officer,

ITA 260/PUN/2015

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2423 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-06-2018
• Assessment Year: 2005-2006
• Appeal Filed On: 13-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Bogus purchase
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 2 60 /P U N/201 5 / ASSESSMENT YEAR : 20 05 - 06 M/S. SANARCH SALES AND SERVICES PVT. LTD., 524 - 1, POOJA BUILDING, SHIVAJI NAGAR, PUNE 411005 . / APPELLANT PAN: A AHCS9237R VS. THE INCOME TAX OFFICER , WARD 6(3), PUNE . / RESPONDENT / APPELLANT BY : SHRI KISHORE PHADKE / RESPONDENT BY : SHRI PANKAJ GARG / DATE OF HEARING : 13 . 0 6 .201 9 / DATE OF PRONOUNCEMENT: 21 . 0 6 .201 9 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 4 , PUNE , DATED 1 6 . 1 2 .201 4 RELATING TO ASSESSMENT YEAR 20 05 - 06 AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 260 /P U N/20 1 5 M/S. SANARCH SALES AND SERVICES PVT . LTD. 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) - 4, PUNE ERRED IN LAW AND ON FACTS IN SUSTAINING CONCEALMENT PENALTY OF RS.10,71,021/ - LEVIED U/S 271(1)(C) OF THE ITA, 1961. 2. THE LEARNED CIT(A) - 4 AND THE LEARNED AO ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT NO ANY INACCURATE PARTICULARS WERE FURNISHED BY THE APPELLANT AS TO CONCEALMENT U/S 271(1)(C) OF THE ITA, 1961. 3. THE LEARNED CIT(A) - 4 AND THE LEARNED AO ERRED IN LAW AND ON FACTS IN NOT APPR ECIATING THAT PENALTY ORDER PASSED BY THE AO ON 23/04/2013 IS TECHNICALLY TIME BARRED CONSIDERING THE PROVISIONS OF SECTION 275(1A). 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. ON PERUS AL OF RECORD, WE FIND THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED IN THE CASE OF ASSESSEE BY THE ASSESSING OFFICER FOR FURNISHING INACCURATE PARTICULARS OF INCOME. HOWEVER, WHILE LEVYING PENALTY, THE ASSESSING OFFICER VIDE P ARA 9 HAS HELD AS UNDER: - 9. IN VIEW OF ABOVE FACTS AND DISCUSSION I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED ITS INCOME BY DEBITING BOGUS PURCHASE AND EXPENSES AND HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME. 5. IN OTHER WORDS, PENALTY HAS BEEN LEVIED BOTH FOR CONCEALMENT OF INCOME AND FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSING OFFICER HAS FAILED TO COME TO A CONCLUSION AS TO NON - FULFILLMENT OF ONE OF THE LIMBS OF SAID SECTION 271(1)(C) OF THE ACT, WHICH HAS NOT BEEN FUL FILLED BY ASSESSEE, FOR LEVYING PENALTY FOR CONCEALMENT. IN SUCH CIRCUMSTANCES, ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT CANNOT STAND AND THE SAME IS HELD TO BE BOTH INVALID AND BAD IN LAW. ITA NO. 260 /P U N/20 1 5 M/S. SANARCH SALES AND SERVICES PVT . LTD. 3 6. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HON BLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY (2017) 392 ITR 4 (BOM), WHEREIN IT WAS HELD THAT WHERE THERE IS NO PROPER SATISFACTION FOR INITIATING PENALTY PROCEEDINGS AND IN THE ABSENCE OF PROPER SHOW CAUSE NOTICE TO THE ASSESSEE, THERE IS NO M ERIT IN LEVY OF PENALTY. IN THE PRESENT CASE, ASSESSING OFFICER HAS FAILED TO CONCLUDE WHICH LIMB OF SECTION 271(1)(C) OF THE ACT IS APPLICABLE, HENCE ORDER SUFFERS FROM INFIRMITY. ACCORDINGLY, WE DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, ALLOWED. 7 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 21 ST DAY OF JUNE , 201 9 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 21 ST JUNE , 201 9 . GCVSR / COPY OF THE ORDER IS FO RWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 4 , PUNE ; 4. THE PR. CIT /CIT - 3 , PUNE ; 5. 6. , , / DR B , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE