ACIT 27 (2), MUMBAI V. MILIND V. DESHMUKH, MUMBAI

MA 5/MUM/2022

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 3507 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 17-07-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 21-04-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 271(1)(c); 143(3)

Judgement Text

1 M.A. 5/Mum/2022 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B”, MUMBAI BEFORE SHRI PRASHANT MAHARSHI (ACCOUNTANT MEMBER) AND SMT. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) M.A. No.5/Mum/2022 (Arising out of ITA No.6398/Mum/2019) (Assessment Year : 2009-10) The Asst. Commissioner of Income- tax-27(2), Room No.419, 4 th Floor Tower No.6, Vashi Railway Station Complex, Vashi, Navi Mumbai-400 704 Milind V Deshmukh, Plot No.-478 TTC Industrial Area, MIDC Rebale Navi Mumbai 400 701 PAN : AEWPD2450D APPLICANT RESPONDENT Assessee represented by Shri Aditya Ramachandrani Department represented by Shri H.B. Irani – Sr.A.R. Date of hearing 22-04-2022 Date of pronouncement 18-07-2022 O R D E R Per : Kavitha Rajagopal (JM): This miscellaneous application pertaining to assessment year 2009-10 has been filed by the revenue for recalling the order dated 20/04/2021 and for re- institution of the appeal for adjudication on merits. 2. Briefly stated, the assessee is into the business of making industrial filters and also a partner in Ashtvinayaka Construction which is related to the business of power transmission. The assessee filed his return of income and the 2 M.A. 5/Mum/2022 assessment was completed under section 143(3) r.w.s. 147 determining total income of Rs.71,21,975/- and addition of Rs.14,21,595/- was made under section 69C of the Act as being bogus purchases. The Ld.CIT(A)-26, Mumbai reduced the profit margin to 12.5% of the bogus purchases of Rs.11,56,346/- which was inadvertently taken as Rs.14,21,595/- by the Assessing Officer. Subsequently penalty proceedings were initiated under section 271(1)(c) of the Act and penalty of Rs.3,80,000/- was levied. The penalty levied by the Assessing Officer was deleted by the Ld.CIT(A) vide order dated 30/08/2019. Aggrieved by this, the revenue was in appeal before the Hon’ble ITAT which dismissed the appeal filed by the Revenue vide its order dated 20/04/2021 applying the CBDT circular No.17 of 2019 vide F.No.279/Misc 142/2007 wherein the monetary limits for filing appeal before the Tribunal was enhanced to Rs.50 lakhs. 3. That being so, the revenue has filed the present miscellaneous application on the ground that assessee’s case is falling in the exceptional clause 10(e) of the amendment to circular No.3/2018 dated 20/08/2018. 4. During the proceedings before us, the Ld.DR submitted that the quantum addition was made on the basis of information received from external sources i.e. sales-tax department of the Government of Maharashtra. Considering the same, the Ld.DR submitted that the assessee’s case is squarely covered under the said exception. 5. The Ld.AR of the assessee submitted that the so-called exception is not applicable to the case of the assessee and relied on the decision of the co- ordinate bench in ITA No.4130/Mum/2011. 6. Having heard the representatives of both the sides and perused the materials on record, we are of the considered opinion that the order of the 3 M.A. 5/Mum/2022 Tribunal in ITA No.6938/Mum/2019 dated 24/04/2021 has to be recalled because the argument of the Ld.DR that the case of the assessee falls under the exception provided at 10(e) of the CBDT circular, holds good. The penalty was levied on the addition made by the Assessing Officer towards bogus purchases only on the basis of information received from sales-tax department which is an external agency, was not looked into and needs to be adjudicated upon. Therefore, we recall the order dated 24/04/2021 and restore the appeal in its original number. The registry is directed to fix the appeal for hearing in due course. 7. In the result, miscellaneous application filed by the Revenue is allowed. Order pronounced in the open court on 18/07/2022. Sd/- sd/- (PRASHANT MAHARSHI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dt : 18/07/2022 Pavanan Copy to : 1. The Applicant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR, B-Bench (True copy) By order Asst.Registrar / Sr.PS, ITAT, Mumbai Benches