AI Insights
The case involves the Revenue's appeal against the order of the Learned Commissioner of Income Tax (Appeals)-12, Ahmedabad, which had deleted a penalty imposed on M/s. Dineshchandra R. Agrawal Infracon Pvt. Ltd. for claiming bogus expenses. The Assessing Officer (AO) had initially levied the penalty following the addition of Rs. 27,21,94,065 as bogus expenses in the assessee's income, which was later reduced to Rs. 16,98,19,305 by the CIT(A). The Tribunal's decision to dismiss the Revenue's appeal was based on the fact that the quantum addition, which justified the penalty, had been overturned in previous ITAT rulings.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 135605 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
20-04-2023
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Next Hearing Date
27-03-2023
Assessment Year
2016-2017
Appeal Filed On
19-10-2022
Judgement Text
आयकर आयकरआयकर आयकर अपी अपीअपी अपीलीय लीयलीय लीय अिधकरण अिधकरणअिधकरण अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद यायपीठ यायपीठ यायपीठ यायपीठ IN THE INCOME TAX APPELLATE TRIBUNAL, ‘’ D’’ BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER And SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER आयकर अपील सं./ITA No.398/AHD/2022 िनधा रण िनधा रणिनधा रण िनधा रण वष वष वष वष /Asstt. Year: 2016-2017 D.C.I.T, Central Circle-2(1), Ahmedabad. Vs. M/s. Dineshchandra R. Agrawal Infracon Pvt. Ltd., 401-403, Grant Mall, Opp. SBI Zonal Offices, S.M. Road, Ambawadi, Ahmedabad-380009. PAN: AABCD9523D (Applicant) (Respondent) Revenue by : Shri Samir Sharma CIT.D.R Assessee by : Shri S.L Poddar, A.R सुनवाई क तारीख/Date of Hearing : 28/03/2023 घोषणा क तारीख /Date of Pronouncement: 21/04/2023 आदेश आदेशआदेश आदेश/O R D E R PER WASEEM AHMED ACCOUNTANT MEMBER: The captioned appeal has been filed at the instance of the Revenue against the order of the Learned Commissioner of Income Tax (Appeals)-12, Ahmedabad, (in short “Ld. CIT(A)”) arising in the matter of penalty order passed under s. 271(1)(c) of the Income Tax Act 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2016-2017. ITA no.398/AHD/2022 Asstt. Year 2016-17 2 2. The revenue has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty u/s 271(1)(c) of the Act of Rs.5,87,71,066/- levied on account of bogus claim of expenditure made by the assessee in the name of certain parties. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty as explanation 5A to section 271(1)(c) of the Act states lhat the income disclosed in the return of income filed after date of search is liable for imposition of penalty u/s 271(1)(c)of the Act. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty as the disclosure of income by assessee is covered under both expressions i.e. concealment of income and furnishing inaccurate particular of income as both expressions ultimately lead to under-reporting of income. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent. 3. The only issue raised by the revenue is that the Ld. CIT(A) erred in deleting the penalty levied by the AO u/s 271(1)(c) of the Act, for the amount of Rs. 5,87,71,066/- on account of the claim of bogus expenses. 4. Briefly stated facts are that the assessee in the present case is a private limited company and engaged in the business of Civil Construction works and Infrastructure Development. In the present case, the assessment was framed by the AO u/s 143(3) r.w.s. 153A of the Act, vide order dated 31/12/2018 after inter- alia making the addition of Rs. 27,21,94,065/- on account of bogus expenses claimed by the assessee. 5. On appeal by the assessee, the Ld. CIT(A) confirmed the addition to the tune of Rs. 16,98,19,305/- on the grounds that the assessee to suppress the profit has claimed the bogus expenses. Thus, the penalty proceeding was initiated u/s 271(1)(c) of the Act by the AO vide notice dated 05/01/2021. The AO was of the view that the assessee has claimed bogus purchases in order to suppress the taxable income. This, fact was also verified by the statement of the Director that ITA no.398/AHD/2022 Asstt. Year 2016-17 3 they acquired jewelry and other properties out of such unaccounted income generated by the assessee. Thus, the AO held that the assessee has concealed the particulars of income and levied penalty under section 271(1)(c) of the Act at Rs. 5,87,71,066/- being 100% of amount of tax sought to be evaded. 6. Aggrieved assessee preferred an appeal to the Ld. CIT(A) who deleted the penalty levied by the AO by observing as under: In view of the above fact, since the quantum addition in the case with respect to all the aspects of additions made by the AO has been deleted by the Hon’ble ITAT, Ahmedabad, consequential penalty imposed u/s.272(1)(c) of the Act has no legs to stand on. Therefore, I direct the AO to delete the penalty u/s.271(1)(c) of the Act amounting to Rs.5,87,71,066/- This ground of appeal is allowed. 7. Being aggrieved by the order of the Ld.CIT(A), the Revenue is in appeal before us. 8. The Ld. DR before us vehemently supported the order of the AO. 9. On the other hand, the Ld. AR before us filed a paper book running from pages 1 to 234 and contended that once the quantum addition has been deleted, the question of levying the penalty u/s 271(1)(c) does not arise. The Ld. AR before us vehemently supported the order of the ld. CIT-A. 10. We have heard the rival contentions of both the parties and perused the materials available on record. Under the provision of section 271(1)(c) of the Act, the penalty can be levied either on concealment of income or furnishing inaccurate particulars of income. Besides the above, there are certain situations specified in explanation 1 to section 271(1)(c) of the Act, wherein it is deemed that the assessee has concealed particulars of income. Once the assessee is found for any of the limbs i.e. concealment or furnishing inaccurate particulars of income, the penalty is calculated equivalent to the amount of tax sought to be evaded subject to the maximum of 300 percent of the amount of tax sought to be evaded. In the ITA no.398/AHD/2022 Asstt. Year 2016-17 4 given case, the quantum addition based on which the penalty was levied has been deleted by the ITAT in ITA No. 369/Ahd/2019 and 414/Ahd/2018 which is available on pages 194 to 218 of the paper books. Once the quantum addition has been deleted, the question of levying penalty does not arise. Accordingly, we do not find any infirmity in the order passed by the Ld.CIT(A). Hence, the ground of appeal of the revenue is hereby dismissed. 11. In the result, the appeal filed by the revenue is dismissed. Order pronounced in the Court on 21/04/2023 at Ahmedabad. Sd/- Sd/- (T.R SENTHIL KUMAR) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER (True Copy) Ahmedabad; Dated 21/04/2023 Manish
