Appeal Details
Counselvise Citation
[2021] 108 COUNSELVISE.COM (IT) 3635 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 11 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-05-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
C
Assessment Year
2009-2010
Appeal Filed On
10-06-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 4162/MUM/2019 (A.Y: 2009-10) PRAVIN HIRABHAI PATEL C-70, HARISHVARDHAN CHS LTD., PLOT NO. 185, SAKI VIHAR ROAD, POWAI, MUMBAI 400072. VS. ITO WARD 26(2)(4) C-11, PRATYAKSHAKAR BHAVAN, BKC, BANDRA (E), MUMBAI 400051. PAN/GIR NO. : AAIPP2779H APPELLANT .. RESPONDENT APPELLANT BY : SHRI ROSHAN OCHANI, AR RESPONDENT BY : SHRI MANPREET DUGGAL, DR DATE OF HEARING 04 .0 5 .2021 DATE OF PRONOUNCEMENT 11 .0 5 .2021 / O R D E R PER PAVAN KUMAR GADALE, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -17 MUM BAI, PASSED U/S. 271(1)(C) AND 250 OF THE INCOME TAX ACT , 1961. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND S OF APPEAL: 1. BECAUSE THE ORDER OF THE CIT(A) CONFIRMING THE PENALTY TO THE TUNE OF RS. 13,12,378/- LEVIED BY THE LD. AO IN THE ASSESSMENT ORDER IS DEVOID OF PRINCIPLES OF NATURAL JUSTICE AS NO PENALTY CAN BE LEVIED IN SITUATION WHERE CREDITO R BECOME ITA NO. 4162/MUM/2019 PRAVIN HIRABHAI PATEL, MUMBAI - 2 - HOSTILE AND MERELY ON THE BASIS OF THAT THE ASSESSE E HAS AGREED TO THE ADDITION TO BUY PIECE OF MIND. 2. BECAUSE LD. CIT(A) ERRED IN LAW AND ON FACTS IN STATING THAT THE APPELLANT FAILED TO SUBSTANTIATE PURCHASES EVEN WHEN THE APPELLANT HAS SUBMITTED INVOICES AND BANK STATE MENTS EVIDENCING PAYMENT TO SUPPLIERS DURING THE COURSE O F ASSESSMENT PROCEEDINGS AND ONLY ON THE BASIS OF STA TEMENT OF SUPPLIER PARTY MADE BEFORE SALES TAX OFFICE. 3. BECAUSE THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN HAVING ANY SUSTAINABLE EVIDENCE TO LEVY PENALTY AS THERE WAS NO ADDITIONAL EVIDENCE TO ESTABLISH THAT THERE CONS CIOUS OR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT IN RESPECT OF THE ALLEGED BOGUS PURCHASES. 4. BECAUSE LD. AO AND CIT(A) ERRED IN LAW AND ON FA CTS IN LEVYING PENALTY OF RS. 13,12,378/- EVEN WHEN THE AU THORITIES ABOVE FAILED TO SUBSTANTIATE THAT WHETHER THE ASSES SEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME TO THIS EXTENT, NOTICE U/S 27 4 AND FINDING IN ASSESSMENT ORDER IS VAGUE. 2. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE IS ENGAGED IN THE BUSINESS OF TRADING IN SUPPLY OF STATIONERY ITEMS& XEROX. THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE A.Y 2009-10 ON 30.09.2009 WITH THE TOTAL INCOME OF RS.7,98,910/-.THE RETURN OF INC OME WAS PROCESSED U/S 143(1) OF THE ACT. THE A.O HAS RE CEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THROUGH D GIT (INV.) WING, MUMBAI THAT THE ASSESSEE HAS ENTERED I NTO BOGUS PURCHASE TRANSACTIONS WITH SEVERAL PARTIES WH O ARE PROVIDING ACCOMMODATION BILLS. AS PER THE INFORMATI ON, THE ASSESSEE IS ONE OF THE BENEFICIARY AND OBTAINED BOGUS ITA NO. 4162/MUM/2019 PRAVIN HIRABHAI PATEL, MUMBAI - 3 - BILLS AGGREGATING TO RS.3,09,16,973/- FROM 18 PARTI ES AND BASED ON THE SAID INFORMATION THE A.O. HAS SUBSEQUE NTLY, ISSUED THE NOTICE U/S 143(2) AND 142(1)OF THE ACT. IN COMPLIANCE, THE LD.AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND THE CASE WAS DISCUSSED. THE A.O CONSIDERED THE MATERIAL ON RECORD AND OBSERVED THAT THE ASSESS EE COULD NOT PROVE THE GENUINENESS OF THE TRANSACTION OF PURCHASES. FURTHER THE A.O HAS ISSUED NOTICE U/S 133(6) OF THE ACT ON THE PARTIES, TO CROSS VERIFY T HE CLAIM OF THE ASSESSEE. BUT THE SAID NOTICE WAS RETURNED US-SERVED WITH REMARK LEFT/NOT KNOWN BY TH E POSTAL AUTHORITIES. THE A.O CONSIDERING THE FACTS AND DETAILS SUBMITTED BY THE ASSESSEE HAS DEALT ON THE DISPUTED ISSUE AND REQUIRED THE ASSESSEE TO PROVE T HE PURCHASE TRANSACTIONS ARE GENUINE. IN COMPLIANCE TH E ASSESSEE HAS FILED SUBMISSIONS ON 12.03.2015 BUT T HE A.O. WAS NOT SATISFIED WITH THE REPLY AND SUPPORTIN G DOCUMENTS. FINALLY THE A.O. HAS ESTIMATED PROFIT EL EMENT ON NON-GENUINE PURCHASES @ 12.5% WHICH WORKS OUT TO RS 38,64,662/-AND ASSESSED THE TOTAL INCOME OF RS. 46,63,532/-AND PASSED THE ORDER U/S 143(3) R.W.S 14 7 OF THE ACT. SUBSEQUENTLY, THE A.O. HAS INITIATED PENALTY PROCEE DINGS U/S271(1)(C) OF THE ACT, SINCE ASSESSEE HAS ENTERED INTO ITA NO. 4162/MUM/2019 PRAVIN HIRABHAI PATEL, MUMBAI - 4 - BOGUS PURCHASE TRANSACTIONS, THE A.O RELIED ON THE FINDINGS IN THE SCRUTINY ASSESSMENT AND ASSESSEE SUBMISSIONS ON 23-09-2015 FILED IN THE PENALTY PROCEEDINGS. THE A.O. HAS NOT ACCEPTED THE ASSESSEE CONTENTIONS AND HAS LEVIED PENALTY BASED ON THE ADD ITION MADE IN THE SCRUTINY ASSESSMENT, WHICH WORKED OUT T O RS.13,12,378/- AND PASSED THE ORDER U/S 271(1)(C) O F THE ACT. 3.AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE CIT(A). THE CIT(A) CONSIDE RED THE GROUNDS OF APPEAL AND THE SUBMISSIONS OF THE ASSESSEE BUT THE CONFIRMED THE ACTION OF THE A.O I N LEVY OF PENALTY AND DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE HAS FILED AN APPE AL WITH THE HONBLE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LD.AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS COOPERATED IN SUBMI TTING THE INFORMATION BEFORE THE A.O. THERE IS NO WANTON ACT OF THE ASSESSEE FOR NON COMPLIANCE AND SUPPORTED HIS ARGUMENTS WITH JUDICIAL DECISIONS CONTRA, THE LD. D R SUPPORTED THE ORDER OF THE LD. CIT(A). ITA NO. 4162/MUM/2019 PRAVIN HIRABHAI PATEL, MUMBAI - 5 - 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE CRUX OF THE DISPUTED I SSUE IS WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT BY THE A.O BASED ON THE ASSESSMENT ORDER UNDE R SECTION 143 R.W.S 147 OF THE ACT. WE FIND THE A.O H AS MADE ADHOC DISALLOWANCE OF BOGUS PURCHASES ON ESTIMATION OF INCOME BUT HAS ACCEPTED THE SALES IN THE BOOKS OF ACCOUNTS. WE ARE OF THE OPINION, THAT WHER E THE ADDITION IS SUSTAINED ON THE ESTIMATED BASIS NO PENALTY U/S 271(1)(C) OF THE ACT CAN BE LEVIED. ACCORDINGLY, WE CONSIDERING THE FACTS, CIRCUMSTANCE S AND JUDICIAL DECISIONS SET ASIDE THE ORDER OF THE C IT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENA LTY AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.05.2021 SD/- SD/- (SHAMIM YAHYA) (PAVAN KUMAR GAD ALE) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 11.05.2021 KRK, PS ITA NO. 4162/MUM/2019 PRAVIN HIRABHAI PATEL, MUMBAI - 6 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. !!' , $ % , / DR, ITAT, MUMBAI 6. () * + / GUARD FILE. / BY ORDER, ! //TRUE COPY// 1. ( ASST. REGISTRAR) ITAT, MUMBA I
