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Facts
The Revenue appealed an order by the Ld. CIT(A) that deleted a penalty of Rs. 1,01,663/- levied under Section 271(1)(c) of the Income Tax Act. The penalty was based on alleged bogus purchases and concealment of income.
Held
The Tribunal held that the Ld. CIT(A)'s order deleting the penalty was well-reasoned and upheld it. The deletion was justified because the quantum assessment proceedings had been restored to the AO and penalty on estimated additions is liable to be deleted.
Key Issues
Whether the deletion of penalty under Section 271(1)(c) by the Ld. CIT(A) was justified given the restoration of quantum assessment proceedings and the principle that penalties on estimated additions are liable to be deleted.
Sections Cited
271(1)(c)
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Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
This appeal by the Revenue is directed against order dated 18.11.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2009-10, raising following grounds:
Anil Kishanchand Bhatia Anil Kishanchand Bhatia 2 ITA No.
“Whether on the facts and circumstances of the case and in law, Ld. Whether on the facts and circumstances of the case and in law, Ld. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the penalty levied of Rs. 1,01,663/ CIT(A) has erred in deleting the penalty levied of Rs. 1,01,663/- u/s 271(1)(c) of the Act, by ignoring the fact that the Maharashtra of the Act, by ignoring the fact that the Maharashtra of the Act, by ignoring the fact that the Maharashtra Sale Tax Department thru DGIT (Investigation Wing) Mumbai, Tax Department thru DGIT i, has proved beyond doubt that M/s. Sandeep Enterprises was a haw beyond doubt that M/s. Sandeep hawala trader, who was involved in providing only accommodation entries of bogus who was involved in providing on ly accommodation entries of bogus purchases and assessee has availed accommodation entries of and assessee has availed accommodation entries of and assessee has availed accommodation entries of bogus purchases of Rs. 3,29,006/ s purchases of Rs. 3,29,006/- from M/s. Sandeep Enterprises s. Sandeep Enterprises and deliberately concealed and furnished inaccurate particulars of and deliberately concealed and furnished inaccurate particulars of and deliberately concealed and furnished inaccurate particulars of his income derived by obtaining rived by obtaining accommodation entries?" accommodation entries?"
Whether on the f n the facts and circumstances of the case and in law, L of the case and in law, Ld CIT(A) has erred in deleting the penalty levied of Rs. 1 A) has erred in deleting the penalty levied of Rs. 1, ,01,663/-u/s 271(1)(c) of the Act, by ignoring the fact that A of the Act, by ignoring the fact that AO has deeply explained the reasons of leaving the penalty and following the ratio explained the reasons of the penalty and following the ratio of decision in the case of M/s. Vijay Proteins Ltd (1996 5 of decision in the case of M/s. Vijay Proteins Ltd (1996 58 ITD 428 of decision in the case of M/s. Vijay Proteins Ltd (1996 5 AHD.), by making addition to the extent of 25% of the total bogus AHD.), by making addition to the extent of 25% of the total bogus AHD.), by making addition to the extent of 25% of the total bogus purchases of Rs. 13,16,026/- purchases of Rs. 13,16 3. "Whether on the facts and "Whether on the facts and circumstances of the case and in law, Ld. of the case and in law, Ld. CIT(A) has erred right in deleting the penalty levied of Rs 1,01,663/ CIT(A) has erred right in delet ing the penalty levied of Rs 1,01,663/- u/s 271(1)(c) of the Act, by ignoring the fact that there was a 271(1)(c) of the Act, by ignoring the fact that there was a 271(1)(c) of the Act, by ignoring the fact that there was a conscious concealment of particulars concealment of particulars of income and a deliberate of income and a deliberate failure to furnish accurate particulars of the income by the failure to furnish accurate p articulars of the income by the assessee which attracts the provision of section 271(1)(c) and explanation which attracts the provision of section 271(1)(c) and explanation thereto, as held in the care of K.P. Madhusudhan Vs. CIT reported in d in the care of K.P. Madhusudhan Vs. CIT reported in d in the care of K.P. Madhusudhan Vs. CIT reported in 251 ITR 99 (SC) ?" 251 ITR 99 (SC) ?" 4. "Whether on the facts and "Whether on the facts and circumstances of the case and in l circumstances of the case and in law, Ld. CIT(A) has erred in delet A) has erred in deleting the penalty levied of of 1,01,663/ ing the penalty levied of of 1,01,663/- u/s 271(1)(c) of the Act, by ignoring the observations of Hon'ble High of the Act, by ignoring the observations of Hon'ble High of the Act, by ignoring the observations of Hon'ble High Court in the CIT Vs Chanchal Katiyal 173 Taxman 71(all), which is Court in the CIT V Katiyal 173 Taxman 71(all), which is relevant in the facts and circumstances of this case, that if the relevant in the facts and circumstances case, that if the assessee did not furnish particulars or inaccurate explanation for assessee did not furnish particulars or inaccurate explanation for assessee did not furnish particulars or inaccurate explanation for the concealed income penalty la justified ?".” the concealed income penalty la justified ?" 2. At the outset, we may like to mention that d we may like to mention that despite notifying we may like to mention that d neither anyone one attended on behalf of the assessee nor on behalf of the assessee nor any adjournment was was sought and, therefore, we we were of the opinion that the assessee was not interested in that the assessee was not interested in that the assessee was not interested in prosecuting the present appeal. present appeal. The appeal was accordingly accordingly heard ex-
Anil Kishanchand Bhatia Anil Kishanchand Bhatia 3 qua the assessee after the assessee after hearing the arguments of the Ld. hearing the arguments of the Ld. departmental represent departmental representative.
We have perused We have perused order of the Ld. CIT (A) on the on the issue and dispute and other relevant material on record and other relevant material on record. I . In the instant case the CIT(A) has deleted the penalty levied by penalty levied by the assessing officer for two reasons. Firstly, the quantum officer for two reasons. the quantum assessment proceeding has been has been restored to the file of the AO by the file of the AO by the Tribunal and, therefore, Tribunal and, therefore, penalty levied by the a penalty levied by the assessing officer does not survive. Secondly, relying on coordinate bench does not survive relying on coordinate bench decisions, penalty levied on the basis of the estimated addition penalty levied on the basis of the estimated addition penalty levied on the basis of the estimated addition is liable to be deleted be deleted. In our opinion, once the the appellate order in quantum proceedings proceedings order has been set-aside and matter aside and matter has been restored for fresh adjudication, has been restored for fresh adjudication, the the very basis of order on which which penalty was levied, stands set- -aside, then the penalty which is penalty which is arising from the said assessment assessment proceedings cannot survive. . In our opinion, the order of ld CIT(A) on the In our opinion, the order of ld CIT(A) on the issue in dispute is well reasoned , a issue in dispute is well reasoned , accordingly, we don’t ccordingly, we don’t find any infirmity in in the same and, we upheld the same. The , we upheld the same. The grounds of the appeal of the R s of the appeal of the Revenue are are accordingly dismissed.
In the result, appeal of the R In the result, appeal of the Revenue is dismissed. evenue is dismissed.