ITO. W-1(3), THANE V. KETAN P BHAVSAR, THANE

ITA 363/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4538 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R BHOOPATHI
• Keywords: Bogus purchase; Initiation of penalty proceedings; Tax effect; Reassessment proceedings
• Section: 271(1)(c); 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NO. 363/MUM/2019 ( / ASSESSMENT YEARS : 2010-11 ITO, WARD 1(3) RN. 10, 6 TH FLOOR, B-WING, WAGLE IND. ESTATE, THANE 400 604. / VS. SHRI KETAN P BHAVSAR 501, EMPIRE WAYS, SAMBHAJI NAGAR, OPP NITIN COMPANY, E.E HIGHWAY, THANE 400601 ./ ./ PAN/GIR NO. : AAQPB4235N ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R. BHOOPATHI, DR / RESPONDENT BY : NONE / DATE OF HEARING 22/01/2020 !'# / DATE OF PRONOUNCEMENT 07/02/2020 / O R D E R PER VIKAS AWASTHY- JM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, TH ANE, DATED 26.11.2018 FOR THE A.Y 2010-11, DELETING PENA LTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT 1961 (HE REIN AFTER REFERRED TO AS THE ACT). ITA NO . 363/MUM/2019. KETAN P BHAVSAR, MUMBAI. - 2 - 2. WHEN THE APPEAL WAS CALLED FOR HEARING NONE APPEARED TO REPRESENT THE ASSESSEE. EVEN NO APPLICATION SEEKING ADJOURNMENT HAS BEEN RECEIVED FROM THE ASSESSEE. AS IS EVIDENT FROM THE ACKNOWLEDGEMENT CARD AVAILABLE ON RECORD THE NOTICE OF HEARING OF APPEAL WAS DULY SERVED ON THE ASSESS EE. CONSIDERING THE ABOVE, WE PROCEED TO DECIDE THE APPEAL WITH THE ASSISTANCE FROM LEARNED DEPARTMENTA L REPRESENTATIVE AND THE MATERIAL AVAILABLE ON RECO RD. 3. THE ADDITION WAS MADE BY THE ASSESSING OFFICER I N REASSESSMENT PROCEEDINGS VIDE ORDER DATED 16/03/201 5 PASSED U/S. 143(3) R.W.S. 147 OF THE ACT BY ESTIMAT ING GP@ 16.68% ON ALLEGED BOGUS PURCHASES. THE ASSESSIN G OFFICER VIDE ORDER DATED 30/09/2015 LEVIED PENALTY U/S 271(1)(C) OF THE ACT ON THE ESTIMATED ADDITION OF ALLEGED BOGUS PURCHASES. 4. SHRI R. BHOOPATHI, APPEARING ON BEHALF OF DEPARTMENT, VEHEMENTLY DEFENDED THE PENALTY ORDER AND PRAYED FOR REVERSING THE FINDINGS OF THE CIT(A) . THE DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT ITA NO . 363/MUM/2019. KETAN P BHAVSAR, MUMBAI. - 3 - SINCE REOPENING WAS DONE ON THE BASIS OF INFORMATIO N RECEIVED FROM EXTERNAL INVESTIGATING AGENCY, THE APPEAL WOULD NOT BE COVERED BY CBDT CIRCULAR DATED 08/082019 ON MONETARY LIMITS FOR FILING APPEALS BY THE DEPARTMENT. 5. I HAVE CONSIDERED THE SUBMISSIONS MADE BY LD.DR AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. EVERY ADDITION MADE IN ASSESSMENT PROCEEDINGS DOES NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. IN THE INSTANT CASE PENALTY U/S. 271(1)(C) HAS BEEN LEVIED ON THE DISALLOWANCE OF BOGUS PURCHASES MADE ON ESTIMATION. IT IS A WELL SETTLED LEGAL POSITION THAT NO PENALTY IS LEVIABLE ON ADDITIONS BASED ON ESTIMATIONS. MEREL Y FOR THE REASON THAT ADDITION HAS BEEN ACCEPTED BY T HE ASSESSEE DOES NOT IPSO FACTO RESULT IN INITIATION OF PENALTY PROCEEDINGS. I SEE NO REASON TO INTERFERE WITH THE IMPUGNED ORDER. 6. I FURTHER OBSERVE THAT THE QUANTUM OF PENALTY WHICH IS SUBJECT MATTER OF DISPUTE IS RS.33,316/- ITA NO . 363/MUM/2019. KETAN P BHAVSAR, MUMBAI. - 4 - ONLY. THE TAX EFFECT IN THIS APPEAL BY THE REVENUE IS FAR LESS THAN THE LIMIT PRESCRIBED BY CBDT FOR FILI NG APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL. IT WOULD BE RELEVANT TO MENTION HERE THAT DEPARTMENT APPEALS EMANATING FROM PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ON THE ADDITIONS CONSEQUENT T O INFORMATION RECEIVED FROM EXTERNAL INVESTIGATING AGENCIES ARE NOT COVERED BY EXCEPTIONS PROVIDED IN PARA 10 OF THE CBDT CIRCULAR DATED 20.08.2018. 7. THUS, FOR THE REASONS CITED ABOVE THE APPEAL OF REVENUE IS LIABLE TO BE DISMISSED. I HOLD AND DIRE CT ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT AFTER HEARING ON FRIDAY, THE 7 TH DAY OF FEBRUARY, 2020. SD/- (VIKAS AWASTHY) JUDICIAL MEMBER MUMBAI, DATED 07/02/2020 VM,SR.PS(O/S) ITA NO . 363/MUM/2019. KETAN P BHAVSAR, MUMBAI. - 5 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. &'( ) / THE CIT(A) 4. ) ( ) / CONCERNED CIT 5. ,-. //'( , '(# , & / DR, ITAT, MUMBAI 6. .34 5 / GUARD FILE. / BY ORDER, , / //TRUE COPY// / ( ASST. REGISTRAR) $%, / ITAT, MUMBAI