M/S. AUTHENTIQUE EYEWEAR PRIVATE LIMITED, Palghar V. ITO WARD-4(1), Thane

ITA 825/MUM/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6114 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 14-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MICHAEL JERALDSR
• Assessee Lawyers: VINAY N BHOIR
• Keywords: Bogus purchase; Reason to believe
• Section: 271(1)(c); 147; 144

Judgement Text

1 ITA 825/MUM/2019 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI BEFORE SHRI SHAMIM YAHYA (A.M.) & SHRI PAWAN SING H (JM) ITA NO. 825/MUM/2019(ASSESSMENT YEAR : 2011-12) M/S AUTHENTIC EYE WEAR PVT LTD, 4, PARSHWA KRUPA, NEAQR MCDONALDS, BHABHOLA ROAD, VASAI WEST, DIST. PALGHAR 401 202 PAN : AAICA1157H VS ITO, WD.4(1), THANE APPELLANT RESPONDEDNT APPELLANT BY SHRI VINAY N BHOIR AR RESPONDENT BY SHRI MICHAEL JERALD SR SR DATE OF HEARING 06-02-2020 DATE OF PRONOUNCEMENT 10-02-2020 O R D E R PER PAWAN SINGH, JM : 1. THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF CIT(A)-3, THANE DATED 24-02-2017 FOR ASSESSMENT YEAR 2011-12. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ASSESSING OFFICER (WARD 4(1), THANE) REOP ENED THE CASE OF APPELLANT FOR ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 FOR AY 2011-12 HAVING REASON TO BELIEVE- THAT APPELLANT HAD BOGUS PURCHAS E DURING THE SAID YEAR ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TA X DEPARTMENT. 2. THE ASSESSING OFFICER HAS PASSED EX PARTE ORDE R DUE TO NON ATTENDANCE OF THE ASSESSEE AND ASSESSED THE INCOME OF THE APPELLA NT AT RS. 40,27,381/- WITH ADDITION OF RS.37,17,321/- ON ACCOUNT OF BOGUS PURC HASE. FURTHER THE AO HAS LEVIED PENALTY U/S 271(L)(C) OF THE INCOME TAX ACT, 1961 FOR AMOUNT OF RS. 11,48,650/- ON GROUND OF FURNISHING INACCURATE PART ICULARS. 3. DUE TO EX PARTE ORDER THE CASE COULD NOT BE PR OPERLY REPRESENTED BEFORE ASSESSING OFFICER TO EXPLAIN AND JUSTIFY SUCH PURCH ASE. FURTHER ASSESSING 2 ITA 825/MUM/2019 OFFICER HAS NOT CONSIDERED VARIOUS JUDGMENTS OF TRI BUNAL AND HIGH COURT WITH REGARD TO DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASE S. 4. THE APPEAL WAS FILED AGAINST ORDER OF ASSESSIN G OFFICER BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE CIT (APPE ALS) HAS DISMISSED SUCH APPEAL ON THE GROUNDS OF NON ATTENDANCE BY APP ELLANT AND PASSED ORDER IN CONFORMITY OF THE ASSESSING OFFICER. 5. DURING THE PENDENCY OF ASSESSMENT AND APPEAL, APPELLANT HAS SHIFTED ITS REGISTERED OFFICE TO NEW ADDRESS. ALL THE NOTICES F OR ASSESSMENT AND APPEAL PROCEEDINGS WERE BEING SENT TO OLD ADMINISTRATIVE O FFICE WHICH WAS NOT RECEIVED BY THE APPELLANT. HENCE THE APPELLANT COUL D NOT ATTEND THE ASSESSMENT AND 'APPEAL PROCEEDINGS. SUCH NON ATTENDANCE WAS NO T INTENTIONAL OR IT WAS NOT TO DISHONOR THE HONBLE INCOME TAX DEPARTMENT. 6. THE OPPORTUNITY SHOULD BE GIVEN TO THE APPELLA NT TO REPRESENT THE CASE & SUBMITS EVIDENCES AND DOCUMENTS TO VERIFY GENUINENE SS OF SUCH SUSPICIOUS PURCHASES. ACCORDINGLY NO INACCURATE PARTICULARS OF INCOME ARE FURNISHED IN RETURN OF INCOME. 7. PLEASE CONSIDER OUR CASE AND WE HEREBY REQUES T YOUR GOOD SELVES FOR YOUR GREAT COOPERATION. 2. AT THE OUTSET OF HEARING, THE LD.AR OF THE ASSESSEE SUBMITS THAT THE CASE OF ASSESSEE WAS REOPENED AND ASSESSMENT WAS CO MPLETED U/S 144 R.W.S. 147. THE AO MADE ADDITION ON ACCOUNT OF BOG US PURCHASES. THE AO MADE ADDITION OF 100% OF THE PURCHASES. ON APPEAL BEFORE CIT(A) THE ADDITION WAS CONFIRMED. THE LD.CIT(A) C ONFIRMED THE ACTION OF AO IN EX-PARTE ORDER. HOWEVER, ON FURTHE R APPEAL BEFORE THE TRIBUNAL, THE ADDITION WAS RESTRICTED TO 12.5% OF T HE AGGREGATE OF ALLEGED BOGUS PURCHASES. THE LD.AR SUBMITS THAT TH E AO PASSED THE PENALTY ORDER ON 29-09-2015 MUCH PRIOR TO THE ORDER OF TRIBUNAL. THE 3 ITA 825/MUM/2019 LD.AR SUBMITS THAT ONCE THE ADDITION HAS BEEN RESTR ICTED TO 12.5%, THE PENALTY ORDER HAS NO LEG TO STAND. 3. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SUBMI TS THAT ASSESSEE IS A HABITUAL AND DEFAULTER IN NOT APPEARING BEFORE TH E LOWER AUTHORITIES. THE ASSESSEE NEITHER APPEARED DURING THE ASSESSMENT NOR IN FIRST APPELLATE PROCEEDINGS IN THE QUANTUM ASSESSMENT. A GAIN IN PENALTY PROCEEDINGS, THE ASSESSEE DID NOT CO-OPERATE WITH T HE PROCEEDINGS BEFORE AO. THOUGH THE ASSESSEE FILED APPEAL AGAINS T THE PENALTY LEVIED U/S 271(1)(C), DESPITE GRANTING OPPORTUNITY, THE ASSESSEE HAS NOT ATTENDED THE PROCEEDINGS. THE LD. DR SUBMITS THAT THE ASSESSEE WAS NOT BRINGING ANY MATERIAL EVIDENCE OR ANY SUBMISSIO N BEFORE THE LOWER AUTHORITIES. THEREFORE, THE MATTER MAY BE RESTORED TO THE FILE OF AO FOR TAKING ACTION AFRESH. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PART IES, PERUSED THE RECORD. WE HAVE NOTED THAT THE AO LEVIED THE PENAL TY VIDE ORDER DATED 29-09-2015. THE AO LEVIED PENALTY ON THE ADDITION ON ACCOUNT OF BOGUS PURCHASES OF RS.37,17,321/-, WHICH WAS 100% O F THE IMPUGNED /DISPUTED PURCHASE. WE HAVE FURTHER NOTED THAT ON APPEAL BEFORE THE TRIBUNAL, THE ADDITION ON ACCOUNT OF BOGUS PURCHASE S HAS BEEN RESTRICTED TO 12.5% IN ITA NO.826/MUM/2019. CONSID ERING THE FACT THAT ASSESSEE HAS NEITHER ATTENDED DURING THE ASSES SMENT IN PENALTY 4 ITA 825/MUM/2019 PROCEEDINGS OR IN APPELLATE PROCEEDINGS EITHER IN Q UANTUM ASSESSMENT ORDER IN APPEAL PROCEEDINGS AGAINST PENALTY LEVIED U/S 271(1)(C) AND THE FACTS REMAINS THAT THE ADDITION ON THE BASIS OF WHICH PENALTY WAS LEVIED HAS BEEN RESTRICTED TO 12.5%, THE PENALTY LE VIED VIDE ORDER DATED 11-09-2015 HAS NO LEG TO STAND. THEREFORE, WE REST ORE THE MATTER TO THE FILE OF AO TO DECIDE THE ISSUE OF PENALTY AFRES H IN ACCORDANCE WITH LAW. NEEDLESS TO ORDER THAT BEFORE PASSING THE ORD ER, THE AO SHALL GRANT OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO CO-OPERATE WITH THE AO AND TO PROVIDE N ECESSARY INFORMATION OR EVIDENCE THAT MAY BE REQUIRED BY THE AO. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED, FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10-02-2020. SD/- SD/- (SHAMIM YAHYA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI, DT : 10 TH FEBRUARY, 2019 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI