Bhupendrakumar Chokshi, Vadodara V. The Dy. Commissioner of Income Tax, Circle-1(2)(1), Vadodara

ITA 284/AHD/2022

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The case revolves around an appeal by Bhupendrakumar Chokshi against the penalty imposed for alleged furnishing of inaccurate particulars of income related to bogus purchases. Initially, the Assessing Officer made an addition of Rs. 6,80,400 to the assessee's income, which was later reduced to 25% by the Tribunal in quantum proceedings. The penalty was imposed based on this addition, which the assessee contested, arguing that the estimation did not amount to inaccurate disclosure of income. The CIT(A) upheld the penalty, leading to the appeal before the Tribunal, which found in favor of the assessee based on the principles of natural justice and relevant legal precedents.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 299965 (ITAT-AHMEDABAD)
• Duration Of Justice: 12 year(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-12-2022
• Assessment Year: misc
• Appeal Filed On: 18-12-2010
• Other Referred Cases: CIT vs. Reliance Petroproducts Pvt. Ltd. (322 ITR 158 (SC))
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Opportunity of being heard
• Section: 271(1)(c); 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER I .T .A . No .2 84 /A h d / 20 22 ( A s se ss m e nt Y e a r : 20 07- 0 8 ) B h up en d r a ku ma r C h o ks hi GF -1 , C en tr e Po in t, Al k a p u r i , Va do dar a , G uj ar a t- 3 9 00 05 V s . D C I T C ir cl e - 1 ( 2 ) ( 1 ) , V a do da r a [ P AN N o. A B FP C 53 33 C ] (Appellant) .. (Respondent) Appellant by : Shri Mukund Bakshi, A.R. Respondent by: Shri Alpesh Parmar, Sr. D.R. D a t e of H ea r i ng 12.12.2022 D a t e of P r o no u n ce me nt 21.12.2022 O R D E R The appeal filed by the assessee is against the order passed by the Ld. CIT(Appeals), National Faceless Appeal Centre (in short “NFAC”), Delhi on 09.05.2022 for A.Y. 2007-08. 2. The grounds of appeal raised by the assessee are as under: “1. The Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi has erred in law and in facts in confirming the order of the Ld. A.O. without affording reasonable opportunity of being heard and making an ex-parte order. Since the order is passed in violation of principles of natural justice, the same is prayed to be set aside. 2. The Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi has confirmed the levy of penalty merely on the ground that the quantum assessment is confirmed by the Ld. CIT(A) and without giving a reasoned finding. 3. The Ld. CIT(A), NFAC, Delhi has erred in facts and in law in confirming the levy of penalty of Rs. 2,31,268/- u/s. 271(1)(c) of the Act on the ground that the appellant has furnished inaccurate particulars of income to the extent of Rs.6,80,400/- on account of alleged bogus purchases. The levy of impugned penalty of Rs.2,31,268/- being bad in law and in facts is prayed to be deleted. 4. Your appellant craves liberty to add, alter, amend, substitute or withdraw any of the ground(s) of appeal hereinabove contended.” ITA No. 284/Ahd/2022 Bhupendrakumar Chokshi vs. DCIT Asst.Year–2007-08 - 2 - 3. There is delay of 11 days in filing the present appeal which has been explained by the assessee by giving the reasons for delay. The reasons appear to be genuine hence the delay is condoned. 4. The assessee filed return of income on 17.10.2007 declaring total income at Rs. 17,39,890/-. The case was selected for scrutiny and assessment was completed under Section 143(3) of the Act on 05.03.2015 making addition of Rs. 6,80,400/- on account of disallowance of bogus purchases. The assessee filed appeal before the CIT(A) and the said order was thereafter challenged before the Tribunal in the quantum proceedings. The Tribunal in ITA No. 1854/Ahd/2017 restricted the addition to the extent of 25% of the purchases found bogus and partly allowed the appeal of the assessee vide order dated 13.09.2022. A show-cause notice under Section 271(1)(c) was issued to the assessee thereby calling upon the details as to why a penalty should not be levied the instant case. The assessee filed its submissions and the Assessing Officer imposed penalty of Rs. 2,31,268/- under Section 271(1)(c) of the Act vide order dated 29.03.2019. 5. Being aggrieved by the penalty order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee. 6. The Ld. A.R. submitted that the addition made in the quantum proceedings are reduced to 25% i.e. Rs. 1,70,100/- on the estimated basis and therefore, penalty of Rs. 2,31,268/- will be more than the addition. The Ld. A.R. further submitted that in respect of the decision of Hon’ble Supreme Court in case of CIT vs. Reliance Petroproducts Pvt. Ltd. (322 ITR 158 (SC)) the estimation of the addition cannot be treated as furnishing of inaccurate particulars and concealment of income. ITA No. 284/Ahd/2022 Bhupendrakumar Chokshi vs. DCIT Asst.Year–2007-08 - 3 - 7. The Ld. D.R. relied upon the assessment order and the penalty order as well as order of the CIT(A). 8. Heard both the parties and perused all the relevant material available on record. It is pertinent to note that the quantum proceedings has been restricted to 25% by the Tribunal in assessee’s case for A.Y. 2007-08. From the perusal of the assessment order and the additions made therein it appears that the assessee at the time of assessment proceedings has disclosed all the relevant aspect of the income and therefore, it cannot be treated as furnishing of inaccurate particulars or concealment of income. The ratio laid down by the Hon’ble Apex Court in case of Reliance Petroproducts Pvt. Ltd. (supra) is applicable in the present case. Therefore, the appeal of the assessee is allowed. 9. In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 21/12/2022 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad; Dated 21/12/2022 TANMAY, Sr. PS TRUE COPY आदेश क त ल प अ े षत/ Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त(अपील) / The CIT(A)- 5. वभागीय त न ध, आयकर अपील!य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड' फाईल / Guard file. आदेशान ु सार/ BY ORDER, उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad