MANISHA RUBBER ENTERPRISES, Mumbai V. ITO WARD 29 (2)(3), Mumbai

ITA 4862/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3410 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 22-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DHAVAN SHAH
• Keywords: Bogus purchase
• Section: 271(1)(c)

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI RAMLAL NEGI (JM) I.T.A. NO. 4862/MUM/2019 (ASSESSMENT YEAR 2010-11) MANISHA RUBBER ENTERPRISES UNIQUE INDSTRIAL ESTATE DR. R.P ROAD, MULUND WEST MUMBAI-400 080. PAN : AAAFM6198D VS. ITO-WARD 29(2)(3) C-41/43, G BLOCK KAUTILAY BHAVAN BANDRA KURLA COMPLEX, BANDRA- E, MUMBAI-51. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI DHAVAN SHAH DEPARTMENT BY SHRI BHARAT ANDHLE DATE OF HEARING 09.03.2021 DATE OF PRONOUNCEMENT 11.03.2021 O R D E R PER SHAMIM YAHYA (AM) :- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF LEARNED CIT(A) DATED 24.5.2019 AGAINST THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT (IN SHORT ACT) AMOUNTING TO RS. 3,41,600/- FOR ASSESSMENT YEAR 2020-11. 2. BRIEF FACTS LEADING TO LEVY OF PENALTY IN THIS C ARE ARE THAT ADDITIONS WERE MADE ON ACCOUNT OF BOGUS PURCHASES. THE ASSESSING O FFICER HAD MADE GROUND FOR ADDITION OF RS. 5,19,867/- OUT OF BOGUS PURCHAS E OF RS. 2,10,760/-. PENALTY WAS ALSO LEVIED ON THE SAID ADDITION. 3. UPON ASSESSEES APPEAL LEARNED CIT(A) DID NOT AD JUDICATE THE ISSUE ON MERIT BUT DISMISSED THE SAME ON THE GROUND THAT THE APPEAL WAS NOT FILED ELECTRONICALLY BUT IN PHYSICAL FORM. AGAINST THIS O RDER THE ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORD. AS REGARDS DISMISSAL OF THE GROUND BY LEARNED CIT(A) WE NOTE T HAT RULE MANDATING FILING OF APPEAL ELECTRONICALLY WAS NOT IN EXISTENCE IN THE P RESENT ASSESSMENT YEAR. MANISHA RUBBER ENTERPRISES 2 HENCE IN THIS VIEW OF THE MATTER TWO VIEWS ARE POSS IBLE THAT EARLIER ASSESSMENT YEAR APPEAL CAN BE FILED IN PHYSICAL FORM. MOREOVER , NOW APPEAL IN ELECTRONIC FORM HAS ALSO BE FILED AND WE FIND THAT PENALTY ON BOGUS PURCHASE IN SIMILAR FACTS HAS BEEN DELETED BY THE ITAT IN SEVERAL DECIS IONS. AS CLEAR FROM THE FACTS RECORDED ABOVE THE DISALLOWANCE HAS BEEN MADE ON AN ESTIMATED BASIS ON ACCOUNT OF THE NONPRODUCTION OF SUPPLIERS BEFORE TH E ASSESSING OFFICER. THE PURCHASE VOUCHERS WERE DULY PRODUCED AND THE PAYMEN TS WERE THROUGH BANKING CHANNEL. IN THESE BACKGROUNDS IN OUR CONSID ERED OPINION ASSESSEE CANNOT BE VISITED WITH THE REGOURS OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. AS A MATTER OF FACT ON MANY OCCASIONS ON SIMILAR CI RCUMSTANCES IN QUANTUM PROCEEDINGS THE DISALLOWANCE ITSELF HAS BEEN DELETE D. IN OUR CONSIDERED OPINION ON THE FACTS AND CIRCUMSTANCES OF THIS CASE ASSESSE E CANNOT BE SAID TO HAVE BEEN GUILTY OF CONCEALMENT OR FURNISHING OF INACCUR ATE PARTICULARS OF INCOME. IN THIS REGARD WE DRAW SUPPORT FROM THE DECISION OF A LARGER BENCH OF THE HONOURABLE SUPREME COURT IN THE CASE OF THE HINDUST AN STEEL LTD. VS. STATE OF ORISSA (83 ITR 26) WHERE IN IT WAS HELD THAT THE AU THORITY MAY NO T LEVY THE PENALTY IF THE CONDUCT OF THE ASSESSEE IS NOT FOUND TO BE CONTUMACIOUS. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON 11.3.2021. SD/- SD/- (RAMLAL NEGI) (SHAMIM YA HYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 11/03/2021 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI