D R COATS INK AND RESINS PVT LTD., MUMBAI V. DCIT 12(2)(1), MUMBAI

ITA 3188/MUM/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 4931 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 11-08-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Bogus
• Section: 271(1)(c); 143(3); 274; 73

Judgement Text

| आयकर अपीलीय अिधकरण यपी , मुंबई | IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON’BLE ACCOUNTANT MEMBER & SHRI SANDEEP SINGH KARHAIL, HON’BLE JUDICIAL MEMBER I.T.A. No. 3188/Mum/2024 Assessment Year: 2011-12 D R Coats Ink and Resins Pvt. Ltd. 230, New Sonal Link Indl. Estate, Bldg No. 2 Link Road Malad (W) Mumbai - 400064 [PAN: AABCD8645A] Vs Deputy Commissioner of Income Tax – 12(2)(1), Mumbai अपील / (Appellant) य / (Respondent) Assessee by : Shri Vimal Punmiya, A/R Revenue by : Smt. Mahita Nair, Sr. D/R सुनवाई की तारीख/Date of Hearing : 12/08/2024 घोषणा की तारीख/Date of Pronouncement : 14/08/2024 आदेश/O R D E R PER NARENDRA KUMAR BILLAIYA, AM : This appeal by the assessee is preferred against the order dated 22/05/2024, by NFAC, Delhi, pertaining to Assessment Year 2011-12. 2. The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in confirming the penalty of Rs.8,29,874/- levied by the AO u/s 271(1)(c) of the Act. 3. The roots for the levy of penalty lie in the assessment order dated 30/11/2016 framed u/s 143(3) r.w.s. 147 of the Act. The returned income of the assessee amounting to Rs.1,22,74,851/- was assessed at Rs.2,78,86,243/- after making addition of Rs.1,56,14,393/- on account of alleged bogus purchases. I.T.A. No. 3188/Mum/2024 2 4. The quarrel relating to the alleged bogus purchases travelled up to this Tribunal in ITA No. 4858/Mum/2017 & C.O. No. 240/Mum/2018 and the Tribunal vide its order dt. 01/04/2021, confirmed the findings of the ld. CIT(A) who restricted the addition on account of alleged bogus purchases to 2% of the profit on account of alleged bogus purchases. The estimated addition of Rs.1,56,14,393/-, made by the AO was re-estimated by the ld. CIT(A) at Rs.24,98,303/- and the penalty was accordingly levied. 5. The notice u/s 274 r.w.s. 271(1)(c) of the Act reads as under:- I.T.A. No. 3188/Mum/2024 3 6. A perusal of the aforementioned notice shows that, the AO is not sure whether he is proceeding to levy penalty for concealment of the particulars of income or for furnishing inaccurate particulars of income. The Hon’ble Supreme Court in the case of M/s SSA's Emerald Meadows [2016] 73 taxmann.com 248, has upheld the order of the Hon’ble High Court holding that notice issued u/s 274 r.w.s. 271(1)(c) of the Act was bad in law as it did not specify under which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated. Similar view was taken by the Hon’ble Bombay High Court in the case of Ventura Textiles Ltd. v. CIT [2020] 117 taxmann.com 182 and also in the case of Mohd. Farhan A. Shaikh v. ACIT 125 taxmann.com 253 (Bom) (HC). 7. Considering the facts of the present case in totality in light of the judicial decisions discussed hereinabove, the penalty so levied is directed to be deleted. 8. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 14 th August, 2024 at Mumbai. Sd/- Sd/- (SANDEEP SINGH KARHAIL) (NARENDRA KUMAR BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, Dated 14/08/2024 *SC SrPs *SC SrPs*SC SrPs *SC SrPs I.T.A. No. 3188/Mum/2024 4 की ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. थ / The Respondent 3. संबंिधत आयकर आयु" / Concerned Pr. CIT 4. आयकर आयु")अपील (/ The CIT(A)- 5. िवभागीय ितिनिध ,आयकर अपीलीय अिधकरण, मुंबई /DR,ITAT, Mumbai, 6. गाड& फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Mumbai