DCIT CIR 7(1), MUMBAI V. POWER MASTER ENGINEERS P.LTD, MUMBAI

ITA 6584/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3353 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 30-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Revised return
• Section: 69C; 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH C, MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.6584/MUM/2014 FOR ASSESSMENT YEAR: 2009-10 DCIT CIRCLE-7(1), ROOM NO. 622, AAYAKAR BHAVAN, M. K. ROAD, CHURCHGATE, MUMBAI-400020. VS. M/S POWER MASTER ENGINEERS PVT. LTD., 229, PRAGATI INDS, ESTATE, 316, N.M.JOSHI MARG, CHINCHPOKLI, MUMBAI-400011. PAN: AAACP4977A (APPELLANT) (RESPONDENT) ITA NO.6585/MUM/2014 FOR ASSESSMENT YEAR: 2010-11 DCIT CIRCLE-7(1), ROOM NO. 622, AAYAKAR BHAVAN, M. K. ROAD, CHURCHGATE, MUMBAI-400020. VS. M/S POWER MASTER ENGINEERS PVT. LTD., 229, PRAGATI INDS, ESTATE, 316, N.M.JOSHI MARG, CHINCHPOKLI, MUMBAI-400011. PAN: AAACP4977A (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PRADEEP KUMAR SINGH (AR) ASSESSEE BY : SHRI JITENDRA SINGH, MS. USHA KADAM (DR) DATE OF HEARING : 08.08.2016 DATE OF PRONOUNCEMENT : 07.09.2016 O R D E R PER PAWAN SINGH, JM: 1. THESE TWO APPEALS ARE FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-13, MUMBAI DATED 01.09.2004 FOR AY 2009-10 & 2010-11 WH EREIN THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT WAS DELETED. AS IN BOTH THE APPEALS, IDENTICAL GROUNDS OF APPEAL ARE RAISED BY THE REVENUE, THUS B OTH THE APPEALS WERE HEARD TOGETHER AND ARE DECIDED BY A COMMON ORDER. 2 ITA NOS. 6584 & 6585/M/2014 M/S POWER MASTER ENGI NEERS PVT. LTD. 2. FIRST WE SHALL TAKE UP THE APPEAL ITA NO. 6584/M/ 2014 FOR AY 2009-10. BRIEF FACTS AS EMANATED FROM THE RECORDS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 30.09.2009 DECLARING T OTAL INCOME AT RS.6,41,55,373/-. THE ASSESSMENT WAS COMPLETED ON 2 8.03.2013 U/S 143(3) R.W.S. 147 OF THE ACT, THE DETERMINING THE TOTAL IN COME AT RS. 7,37,96,348/-. THE AO RECEIVED INFORMATION FROM DJIT (INVESTIGATION), MUMBAI REGARDING BOGUS PURCHASES AS INFORMED BY THE SALE TAX AUTHORITIES. AS INFORMED BY DJIT(I) THE ASSESSEE WAS ONE OF THE BENEFICIARY FOR THE TRANSAC TION OF RS. 86,26,469/-. AN ADDITION ON ACCOUNT OF BOGUS PURCHASES OF RS. 86,26 ,469/- WAS ADDED TO THE INCOME OF ASSESSEE U/S 69C OF THE I.T. ACT. AFTER A DDITION U/S 69C, PENALTY PROCEEDING U/S 271(1)(C) WAS INITIATED AGAINST THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. T HE ASSESSEE WAS SERVED WITH A NOTICE OF INITIATION OF PENALTY. THE ASSESSEE FUR NISHED HIS REPLY VIDE REPLY DATED 06.08.2013. IN THE REPLY, THE ASSESSEE CONTEN DED THAT THEY NEITHER CONCEALED NOR FURNISHED INACCURATE PARTICULARS OF I NCOME. THE ASSESSEE FURTHER CONTENDED THAT THE INCOME-TAX DEPARTMENT HAS ISSUED PRESS RELEASE DATED 08.03.2013 WHICH HAS ALSO APPEARED ON GOVERNMENT OF INDIAS PRESS INFORMATION BUREAU WEBSITE UNDER REFERENCE PIB RELE ASE/MH/61 DATED 08.03.2013 AND ALSO REPORTS FROM THE ECONOMIC TIMES AND TIMES OF INDIA DATED 09.03.2013 WHEREIN IT WAS REPORTED THAT LARGE NUMBE R OF TAX PAYER HAVE OBTAINED THE BOGUS BILL FOR NON-GENUINE PURCHASES O R EXPENSES, FROM THE FIELD OF HAWALA DEALER AND USE SUCH BILLS TO SUPPRESS FROM T AXABLE INCOME. BOGUS BILLS WERE ISSUED BY THE HAWALA DEALERS TO THE BENEFICIAR IES WITHOUT ACTUAL DISPATCH OF GOODS. THE INCOME-TAX DEPARTMENT INVESTIGATED THE C ASE BASED ON INPUTS RECEIVED FROM VAT/SALE TAX DEPARTMENT OF MAHARASHTR A, WHICH HAS DETECTED MORE THAN 2,000/- CASES OF EVASION IN THE STATE. TH E I.T. DEPARTMENT HAS ASKED THE ASSESSEE/TAX PAYER, WHO HAVE AVAILED SUCH BOGUS BILLS TO COME FORWARD VOLUNTARY AND DISCLOSED CORRECT STATE OF AFFAIR BY FILING THE RETURNS/REVISED RETURNS AND PAID REQUISITE TAX BY 15 TH OF MARCH 2015 WHICH IS ALSO THE LAST DATE FOR PAYMENT ON ADVANCE TAX. AS PER THE PRESS RELEAS E, THE ASSESSEE PAID THE TAX ON THE DISPUTED AMOUNT WITH INTEREST BEFORE COMPLET ION OF ASSESSMENT AND RE- 3 ITA NOS. 6584 & 6585/M/2014 M/S POWER MASTER ENGI NEERS PVT. LTD. OPENING OF THE ASSESSMENT AND INSTEAD OF PURSUING T HE APPEAL, THE ASSESSEE ACCEPTED IT TO BUY PEACE TO CONCENTRATE ON THEIR BU SINESS. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AND THE AO LEVI ED THE PENALTY U/S 271(1)(C) OF THE ACT OF RS. 2,93,300/- BEING 100% O F THE TAX SOUGHT TO BE EVADED. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). LD. CIT(A) DELETED THE ENTIRE PENALTY IN TH E IMPUGNED ORDER DATED 01.09.2014. AGGRIEVED BY THE ORDER OF CIT(A), THE R EVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD LD DEPARTMENTAL REPRESENTATIVE (DR) F OR REVENUE AND LD AUTHORISED REPRESENTATIVE (AR) FOR ASSESSEE AND PER USED THE MATERIAL AVAILABLE ON RECORD. LD. DR FOR REVENUE RELIED UPON THE ORDER OF AO AND PRAYED THAT THE ORDER OF CIT(A) BE SET-ASIDE AND THE ORDER PASSED B Y THE AO MAY BE RESTORED. ON THE CONTRARY, LD. AR FOR ASSESSEE STRONGLY OPPOS ED THE SUBMISSION MADE BY THE DR FOR REVENUE AND ARGUED THAT THE PURCHASES MA DE BY ASSESSEE WERE GENUINE ONE. THE ASSESSEE HAS NOT AVAILED ANY ACCOM MODATION ENTRY. THE ASSESSEE FURNISHED COMPLETE SET OF PURCHASES MADE F ROM THE PARTIES WHICH INCLUDES LEDGER ACCOUNT, PURCHASE INVOICE, DELIVERY CHALLANS, LORRY RECEIPTS, GOODS RECEIPT NOTES, INDENT FROM WORKS, PURCHASE OR DER, PAYMENT APPROVAL VOUCHER AND THE STATEMENT OF BANKING TRANSACTION. A R OF THE ASSESSEE FURTHER ARGUED THAT THE ASSESSEE HAS NOT FILED ANY APPEAL A S THEY WERE MOTIVATED BY THE PRESS RELEASE OF I.T. DEPARTMENT THAT THE PENALTY C ANNOT BE LEVIED IN CASE, TAX IS PAID BY THE END OF 15 TH MARCH 2013. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND FURTHER PERUSED THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, THE PENALTY WAS LEVIED ON THE ADDITION OF IMPUGNED BOGUS PURCHASES OF RS. 86,26,4 69/-. AGAINST THE ADDITION ON ACCOUNT OF BOGUS PURCHASES, NO APPEAL WAS FILED BY THE ASSESSEE. THE ASSESSEE PAID THE DUE TAX ON THE ADDITION MADE U/S 69C ON THE BASIS OF PRESS RELEASE OF I.T. DEPARTMENT. THE REVENUE HAS NOT DIS PUTED THE PRESS RELEASE ISSUED BY THE I.T. DEPARTMENT ASKING THE ASSESSEE/T AX PAYER, WHO AVAILED OF SUCH IMPUGNED BILLS/BOGUS BILLS TO COME FORWARD VOLUNTAR Y AND DISCLOSED CORRECT STATE OF AFFAIR BY FILING RETURN AND PAYING REQUISI TE TAX BY 15 TH OF MARCH 2013. 4 ITA NOS. 6584 & 6585/M/2014 M/S POWER MASTER ENGI NEERS PVT. LTD. THE ASSESSEE IS AMONG THE ONE OF SUCH PERSON, WHO I NSTEAD OF FILING APPEAL/CONTESTING THE CASE FURTHER SUBMITTED BEFORE THE VARIOUS FORUMS OF I.T. DEPARTMENT PAID THE TAX ON IMPUGNED PURCHASES. ALL THESE FACTS WERE CONSIDERED BY THE CIT(A). THE CIT(A) AFTER CONSIDER ING THE CASE OF AO, MATERIAL AVAILABLE ON RECORD AND THE CONTENTION RAI SED BY ASSESSEE PASSED THE FOLLOWING ORDER: 3.9. IN THE INSTANT CASE, IT IS NOR DISPUTED THAT THE APPELLANT HAVE FIRSTLY INFORMED THE AO THAT THEY ARE PAYING THE TAXES ALON GWITH INTEREST IN COMPLIANCE TO THE SAID PRESS RELEASE AND THEN AGAIN OFFER HAVING PAID ALL THE TAXES AND INTEREST, ASSESSEE HAVE INFORMED ONCE AGAIN THAT THEY HAVE DONE SO. IT IS CLEAR THAT THE APPELLANTS CONDUCT GO ES IN THEIR FAVOUR TO THE EXTENT THAT THEY HAVE GOT THE IMMUNITY FOR THESE A. Y.S INVOLVED BY COMPLYING TO THE SAID PRESS RELEASE DATED 08.03.201 3. THUS THE APPELLANT WHO HAVE BEEN FOUND HAVING FURNISHED INACCURATE PAR TICULARS AS WELL AS CONCEALED INCOME FOR AY.2009-10 WHICH WAS ASSESSED U/S.143(3) R.W.S. 147 AND THUS WERE LIABLE FOR IMPOSITION OF PENALTY U/S.271(1)(C) AS PER THE PROVISIONS, BUT FOR THE PRESS RELEASE ISSUED BY THE DEPARTMENT . THE SAID PRESS RELEASE EXPRESSED TWO SPECIFIC REQUIREMENTS I .E. TAX PAYER HAVE TO DO SO VOLUNTARILY AND THEN HAVE TO PAY TAX AND INTERES T BY 15/03/2013, AND BOTH OF WHICH HAVING DONE BY THE APPELLANT, HAVE GO NE TO THEIR ADVANTAGE. IN VIEW OF THIS, THOUGH I AM OF THE CONSIDERED VIEW THAT PENALTY U/S.271(1)(C) WAS ATTRACTED AS PER PROVISIONS OF TH E ACT IN NORMAL COURSE FOR FURNISHING INACCURATE PARTICULARS AS WELL AS CO NCEALMENT OF INCOME, IS NOT LEVIABLE FOR THE REASONS THAT A PRESS RELEASE W AS ISSUED BY THE DEPARTMENT ON THIS SPECIFIC ISSUE AND APPELLANT COM PLIED WITH THE SAME, FOLLOWING THE RATIO OF DECISION IN CASE OF BOMBAY C LOTH SYNDICATES VS CIT(CITED. SUPRA). ACCORDINGLY PENALTY LEVIED U/S.2 71(1)(C) OF THE ACT, FOR AY.2009-10 FOR AN AMOUNT OF RS.29,33,000J-AND PENAL TY LEVIED OF RS.19,03,310/- FOR AY.2010-11, BEING NOT SUSTAINABL E ARE DELETED HEREWITH IN APPEAL NO.230/13-14 AND APPEAL NO.437/13-14 RESP ECTIVELY. THE GROUND TAKEN BY APPELLANT IN THESE TWO APPEALS ARE ALLOWED . 5. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF CIT(A). WHILE PASSING THE IMPUGNED ORDER, FOLLOWING THE RATIO OF BOMBAY CLOTH SYNDICATE VS. CIT (1995) 79 TAXMAN 352 (MUM) AND DELETED THE PENALTY. THE OR DER OF LD. CIT(A) IS REASONED ONE AND DOES NOT SUFFER FROM ANY ILLEGALIT Y OR INFIRMITY, HENCE, DOES NOT REQUIRE ANY INTERFERENCE AT OUR END, THUS, THE APPEAL FILED BY REVENUE IS DISMISSED. ITA NO. 6585/MUM/2014 AY-2010-11 6. THE REVENUE HAS RAISED THE IDENTICAL GROUNDS OF APP EAL IN THE PRESENT APPEAL AS WELL. WE HAVE DISMISSED THE APPEAL OF REVENUE FOR A Y 2009-10, AND THE FACTS 5 ITA NOS. 6584 & 6585/M/2014 M/S POWER MASTER ENGI NEERS PVT. LTD. OF THE PRESENT APPEAL ARE IDENTICAL AS OF APPEAL FO R AY 2009-10. AS WE HAVE ALREADY DISMISSED THE APPEAL FOR AY-2009-10, THUS, THE APPEAL OF THE REVENUE IS ALSO DISMISSED. 7. IN THE RESULT, BOTH THE APPEAL FILED BY THE REVENUE IS TREATED AS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH SEPTEMBER 2016. SD/- SD/- ( R.C.SHARMA ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 07/09/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITA T, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/