Appeal details
Counselvise Citation
[2021] 108 COUNSELVISE.COM (IT) 1917 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-07-2021
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
D
Assessment Year
2009-2010
Appeal Filed On
26-09-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUM BAI BEFORE SHRI SHAMIM YAHYA, AM AND C.N.PRASAD , JM ITA NO. 6084, 6085 & 6086/MUM/2019 (ASSESSMENT YEARS: 2009-10,2010-11 & 2011-12) ITO-12(3)(3) ROOM NO.224, 2 ND FLOOR AAYKAR BHAWAN, M.K.ROAD MUMBAI-400 020 VS. M/S. MAINFRAME COMPUTERS PRIVATE LIMITED B-509, ASHOKA TOWER KULUPWADI ROAD, BORIWALI(E) MUMBAI-400 066 PAN/GIR NO. A AA CM3336N ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI BHARAT ANDHALE RESPONDENT BY : NONE DATE OF HEARING : 20.04.2021 DATE OF PRONOUNCEMENT : 01.07 .2021 O R D E R PER BENCH.: THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-20, MUMBAI (L D.CIT(A) FOR SHORT) DATED 28.06.2019 AND PERTAINS TO THE ASSESSMENT YEARS (A. Y.) 2009-10,2010-11 & 2011- 12, WHEREIN FOLLOWING PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE I.T.ACT, 1961 HAS BEEN DELETED:- SR.NO ASSESSMENT YEAR AMOUNT OF PENALTY 1 2009-10 12,828/- 2 2010-11 38,692/- 3 2011-12 17,667/- 2. SINCE THE ISSUES AND FACTS ARE CONNECTED, THESE ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3. THE BRIEF FACTS OF THE CASE ARE LEADING TO THE LEVY OF PENALTY ARE THAT THE ASSESSING OFFICER IN THESE CASES MADE DISALLOWANCES OF ON ACCOUNT OF BOGUS PURCHASE. 2 6084-6086/MUM/2019 ASSESSEE HAS SUPPLIED THE PURCHASE VOUCHERS AND THE PAYMENT, WHERE SHOWN TO HAVE BEEN MADE BY BANKING CHANNEL. HOWEVER, DRAWING ADVE RSE INFERENCE FOR THE NON PRODUCTION OF THE SUPPLIERS , THE ASSESSING OFFICER DISALLOWED THE PEAK CREDIT INVOLVED IN SUCH PURCHASES. HOWEVER, HE ASSESSING OFFICER DI D NOT DOUBT THE SALES, THE LD.CIT(A) RESTRICTED THE DISALLOWANCE TO 4% OF THE ALLEGED BOGUS PURCHASES. PENALTY U/S 271(1)(C) WAS ALSO LEVIED. THE LD.CIT(A) DELETE D THE PENALTY REFERRING TO COUPLE OF CASE LAWS FOR THE PROPOSITION THAT PENALTY IS NO T LEVIABLE ON SUCH ESTIMATED DISALLOWANCES. 4. AGAINST THIS ORDER REVENUE IS IN APPEAL BEFOR E US. 5. WE HAVE HEARD THE LD. DR AND PERUSED THE RECOR DS. AS CLEAR FROM THE FATS RECORDED ABOVE, THE DISALLOWANCE HAS BEEN MADE ON A N ESTIMATED BASIS ON ACCOUNT OF THE NON PRODUCTION OF SUPPLIERS BEFORE THE ASSESSIN G OFFICER. THE PURCHASE VOUCHERS WERE DULY PRODUCED AND THE PAYMENTS WERE THROUGH BA NKING CHANNEL. IN THESE BACKGROUNDS, IN OUR CONSIDERED OPINION, ASSESSEE CA NNOT BE VISITED WITH THE RIGOURS OF PENALTY UNDER SECTION 271(1)(C). AS A MATTER OF FA CT, ON MANY OCCASIONS ON SIMILAR CIRCUMSTANCES IN QUANTUM PROCEEDINGS, THE DISALLOWA NCE ITSELF HAS BEEN DELETED. IN OUR CONSIDERED OPINION, ON THE FACTS AND CIRCUMST ANCES OF THE CASE, ASSESSEE CANNOT BE SAID TO HAVE BEEN GUILTY OF CONCEALMENT OR FURNI SHING OF INACCURATE PARTICULARS OF INCOME. IN THIS REGARD, WE DRAW SUPPORT FROM THE DE CISION OF A LARGER BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF THE STATE OF O RISSA 82 ITR 26, WHERE IN IT WAS HELD THAT THE AUTHORITY MAY NOT LEVY THE PENALTY, IF THE CONDUCT OF THE ASSESEE IS NOT FOUND TO BE CONTUMACIOUS. 6. WE FURTHER NOTE THAT TAX EFFECT IN THIS CASE IS BELOW THE LIMIT FIXED BY THE CBDT FOR FILING APPEALS BEFORE ITAT. THE REVENUE HAS TRI ED TO MAKE OUT A CASE THAT SINCE THE ADDITION WAS MADE PURSUANT TO INFORMATION FROM SALE S TAX DEPARTMENT, THIS PENALTY APPEAL FALLS IN THE EXCEPTION CARVED OUT IN THE CBD T CIRCULAR REGARDING APPEALS ARISING OUT OF ADDITIONS MADE PURSUANT TO INFORMATI ON FROM OUTSIDE AGENCIES. WE ARE 3 6084-6086/MUM/2019 OF THE OPINION THAT THIS PLEA IS NOT TENABLE INASMU CH AS ONCE REVENUE ACCEPTS THAT PENALTY IS LEVIED ON OUTSIDE AGENCY INFORMATION, TH E PENALTY LEVIED WILL HAVE NO LEGS TO STAND. 7. IN THE BACKGROUND OF AFORESAID DISCUSSION AND PRECEDENT, WE UPHOLD THE ORDERS OF THE LD.CIT(A) AND DELETE THE LEVY OF PENALTY. 8. IN THE RESULT, REVENUES APPEALS ARE DISMISSE D. ORDER PRONOUNCED IN THE OP EN COURT ON 01.07.2021 SD/- SD/- (C.N.PRASAD) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 01.07.2021 THIRUMALESH , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI
