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Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI SHAMIM YAHYA & SHRI LALIET KUMAR
ORDER PER LALIET KUMAR, J.M: All these three appeals are filed by the Revenue challenging the order passed by the Commissioner of Income Tax (Appeals)-1, Thane [hereinafter referred to as ‘the CIT(A)’] vide order dated 13.02.2020 on the ground mentioned in the respective appeals.
2 to 596/MUM/2021 (A.Y.2009-10 to 2011-12) 2. None was present at the time of hearing the appeal on behalf of the assessee and on account of smallness of quantum involved in the appeals of the Revenue. We have decided to hear these appeals.
We have heard the ld. DR on behalf of the Revenue.
The ld. Departmental Representative (DR) for the Revenue submitted that the CIT(A) while allowing the appeal of the assessee had wrongly deleted the penalty and our attention was drawn to para-6.4 of the order passed by the CIT(A) to the following effect: “6.4. The levy of penalty is merely on disallowance of purchases and not finding of concealment of any particular of mala-fide intention to reduce taxable income. Addition made on account of disallowance of purchases are bogus automatically cannot justify the penalty levied u/s 271(1)(c) of the Act. Accordingly, the penalty of Rs. 94,800/-, Rs. 7,82,510/- and Rs. 1,56,080/- imposed u/s 271(1)(c) of the I.T. Act, by the AO for A.Ys. 2009-10, 2010-11 & 2011-12 , are hereby deleted and these grounds of appeal
are allowed.”
5. It was submitted by the ld. DR that though the quantum in all the appeals is less than the threshold limit fixed by the Board for filing the appeal, however, the appeal is maintainable on account of the reasons given in the CBDT Circular.
6. We have heard the rival contentions of the parties and perused the material available on record. Paragraph no.3 of the impugned order of CIT(A) records as under: “3. The facts of the cases are that in these the returns of income declaring total income at Rs. 7,60,200/-, Rs. 13,33,990/- and Rs. 17,99,880/- for A.Ys. 2009-10, 2010-11 and 2011-12 respectively were e-filed and the same were processed u/s 143(1) of the Act. The assessment u/s 143(3) r.w.s. 147 of the Act was finalized on 13.06.2014 for all the three A.Ys., assessing the total income at Rs. 10,67,000/-, Rs. 38,66,390 and Rs. 23,05,000/after making addition of Rs. 3,06,800/-, Rs. 25,32,400/- and Rs. 5,05,120/for A.Ys. 2009-10, 3 to 596/MUM/2021 (A.Y.2009-10 to 2011-12) 2010-11 and 2011-12 respectively, on account of bogus purchases made from the alleged hawala dealers and initiated penalty proceedings u/s 271(1)(c) of the I.T. Act, 1961. During the course of Penalty Proceedings, the A.O. did not accept the submission filed by the assessee and levied penalty of Rs. 94,800/-, Rs. 7,82,510/- and Rs. 1,56,080/- for A.Ys. 2009-10, 2010-11 and 2011-12. Aggrieved with the Penalty Orders, the Appellant preferred the present appeals and raised the above grounds of appeal
.”
7. From the perusal of the above-said paragraph, it is abundantly clear that the additions were made in the hands of the assessee on the basis of the estimate, based of the information received from the Sales Tax Department, Government of Maharashtra mentioning therein that some bogus purchases were shown through the bogus invoices and accordingly, the penalty for all the three years of Rs. 94,800/-, Rs. 7,82,510/- and Rs. 1,56,080/- were levied on the assessee.
8. In our considered opinion, the penalty is leviable under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on account of the two reasons namely the assessee concealed the income and also filed the inaccurate particulars of the income. In the present case, the reasons for imposing of penalty was premised on the Assessment Order, which in turn was based on the information received from the Sales Tax Department, Government of Maharashtra. In our considered opinion, the reasons were based on the information of making bogus sale with the help of bogus invoices, before the Sales Tax Department and were not arising out of the facts before the Income Tax Department. Further, the income as well as penalty were imposed on the basis treating the entire sale bills as bogus and estimating the income on the basis of the said bills.
9. In our considered opinion, no penalty can be levied on estimate basis, as if cannot be alleged on estimate basis that the assessee had filed