ITO-32(1)(5), MUMBAI vs. GAURANG VINODRAI MEHTA, MUMBAI

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ITA 1533/MUM/2020Status: DisposedITAT Mumbai29 September 2021AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the CBDT Circular No. 17/2019, which sets monetary limits for appeals, does not allow appeals in penalty proceedings based on exceptions meant for quantum proceedings. Therefore, the Revenue's appeal was dismissed as not maintainable.

What were the facts?

The Revenue filed an appeal against the deletion of penalty imposed under Section 271(1)(c) for bogus purchases. The penalty was deleted by the CIT(A) on the ground that it was levied on an estimated addition.

What were the issues?

Whether the Revenue's appeal against a penalty deletion is maintainable when the monetary limit prescribed by CBDT Circular No. 17/2019 is not met, and if exceptions for quantum proceedings apply to penalty proceedings.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘G‘ BENCH

For Appellant: Shri Gaurang Mehta
For Respondent: Shri T.S.Khalsa, Shri Gaurang Mehta
Hearing: 29/09/2021Pronounced: 29/09/2021

आदेश / O R D E R PER M. BALAGANESH (A.M):

1.

This appeal in A.Y.2010-11 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-44, Mumbai in appeal No.ITBA/APL/S/250/2019-20/1023722884(1) dated 09/01/2020 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as Act).

2.

We have heard rival submissions and perused the material available on record. We find that the ld. AO had levied penalty on the estimated addition made on account of bogus purchases. This penalty levied u/s.271(1)(c) of the Act on an addition made on account of bogus purchases was deleted by the ld. CIT(A) on the primary ground that no penalty would survive on an estimated addition. Aggrieved, the revenue is in appeal before us.

3.

We find at the outset, the ld AR argued that penalty that is in dispute before us, falls below the monetary limit prescribed by the CBDT in its Circular No. 17/2019 dated 08/08/2019 for preferring appeal by the Revenue before this Tribunal. We find that the ld. DR vehemently argued that the said case falls within the exception provided in para 10(e) of the said Circular and accordingly he argued that the appeal is maintainable. We find that the exception provided in para 10(e) of the Circular 17/2019 dated 08/08/2019 is applicable only for the quantum proceedings and the same cannot be made applicable for penalty proceedings. It is well settled that penalty and quantum assessment proceedings are distinct and separate. Accordingly, we dismiss this appeal of the Revenue by following the aforesaid Circular No.17/2019 dated 08/08/2019 and hold that the appeal of the Revenue is not maintainable.

4.

In the result, appeal of the Revenue is dismissed.

Order pronounced in open Court on 29/09/2021.

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