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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE, JM:
The appeal is filed by the revenue against the order of the Commissioner of Income Tax (Appeals) -20 Mumbai, passed u/s. 271(1)(c) and 250 of the Income Tax Act, 1961. The revenue has raised the following grounds of appeal:
“1. "On the facts and in the circumstances of the case, the Ld.CIT(A) erred in deleting the penalty levied by the AO u/s.271(1)(c) of the Income-tax Act, 1961 of Rs.4,39,000/-
Mudrika Labels Pvt ltd., Mumbai - 2 - without appreciating the facts that the assessee claimed bogus purchases in its Original Return of Income and thus furnished particulars of income within the meaning of section 271(1)(c) of the Income-tax Act, 1961".
"On the facts and in the circumstances of the case, the ld. CIT(A) erred in deleting the penalty levied by the AO u/s.271(1)(c) of the Income Tax Act, 1961, of Rs.4,39,000/- without appreciating the facts that the assessee withdrawn its wrong claim in the return filed in response to notice u/s.148 therefore assessee furnished inaccurate particulars of income within the meaning of section 271(1)(c) of the Income Tax Act, 1961."
3 On the facts and circumstances of the case, the Hon'ble ITAT is requested to entertain this appeal though the tax effect is below the monetary limit prescribed in the CBDTs Circular No. 17/2019 dated 08.08.2019 read with circular No.312018 dated 11.07.2018 as amended on 20.08.2018 as the case falls in the exception provided in para 10(e) of the said instruction in as much as the addition is based on information received from external sources in the nature of law enforcement agencies, namely, Sales Tax Authorities.
4 The appellant prays that the order of the ld. CIT(A) on the grounds be set aside and that of the AO be restore.
5 The appellant craves to add, amend or alter all or any of the grounds of appeal.
2.The Brief facts of the case are that the assessee company is engaged in the business of manufacturing of labels, stickers and packing materials and filed the return of income on 26.09.2009 for the A.Y 2009-10 with a total income of Rs. 75,19558/-,the return of income was Mudrika Labels Pvt ltd., Mumbai - 3 - processed u/s 143(1) of the Act. Subsequently, the A.O has reason to believe that the assessee has obtained bogus purchases bills as per information of the investigation wing of Mumbai, Income tax department and therefore notice u/s 148 of the Act was issued. The A.O found that the assessee has obtained bogus purchases bills from one party of Rs. 14,77,528/-.Whereas, the assessee has filed a letter stating that for the said assessment year in response notice issued u/s 148 of the Act, the assessee has filed a revised total income of Rs.89,40,257/- by disallowing the net purchases made from the party. The A.O. has issued notice u/s 143(2) and 142(1) of the Act along with questionnaire. In compliance the ld. AR of the assessee appeared from time to time and submitted the details and the case was discussed. The A.O found that the assessee has no doubt has reduced the bogus purchases and filed the return of income in compliance to notice u/s 148 of the Act and accordingly determined the total income of Rs. 89,40,260/-and passed order u/s 143(3) r.w.s 147 of the Act dated 20.03.2015.
Subsequently, the A.O has initiated penalty proceedings u/s 271(1)(c) of the Act. In the penalty proceedings, the A.O relied on the findings of the reassessment proceedings and the submissions of the assessee on the Mudrika Labels Pvt ltd., Mumbai - 4 - revised return of income filed. But the A.O. was not satisfied with the explanations and dealt with the provisions of Sec. 271(1)(c) of the Act and observed that the assessee has furnished the inaccurate particulars of income and levied a penalty of Rs.4,39,000/- and passed order u/s 271(1)(c) dated 31.03.2018.
Aggrieved by the penalty order, the assessee has filed an appeal before the CIT(A).The Ld.CIT(A) in appellate proceedings considered the grounds of appeal, submissions of the assessee and the findings of the A.O in the penalty proceedings and observed that the assessee in the reassessment proceedings in lieu of notice issued u/s 148 of the Act has filed a revised return of income excluding the bogus purchases under a bonafide belief and to by peace with the Income tax department. In such circumstances, the A.O. having accepted the facts that the assessee has filed a revised return of income excluding the bogus purchases cannot draw a adverse inferences and the Ld.CIT(A) dealt at page 7 para 5.3 of the order and directed the A.O to delete the penalty and allowed the assessee appeal.
4. Aggrieved by the order of the CIT(A), the revenue has filed an appeal with the Honble Tribunal. At the time of hearing none appeared on behalf of the assessee .The Ld.
Mudrika Labels Pvt ltd., Mumbai - 5 - DR submitted that the CIT(A) has erred in deleting the penalty irrespective of the fact that the assessee has entered into obtaining bogus purchase bills and in response to notice u/s 148 of the Act has reduced the bogus purchases from the total purchases and filed a revised return of income which cannot be accepted and prayed for allowing the revenue appeal.
We heard the Ld.DR submissions and perused the material on record.The sole crux of the disputed issue that the Ld.CIT(A) has erred in deleting the penalty u/s 271(1)(c) of the Act. Wherethe assessee in the assessment proceedings has filed a revised computation of income in compliance to notice u/s 148 of the income by reducing the bogus purchases. We find the Ld.CIT(A) observed that the return of income filed in the reassessment proceedings in response to notice u/sec148 of the Act overrides the original return of income and that, the A.O. having accepted the return of income filed in response to notice issued u/s 148 of the Act cannot make adverse inferences on the basis of original return of income. The Ld. DR could not controvert the observations of the CIT(A) with any new cogent information or evidence. We find the Ld.CIT(A) considering the provisions of law and facts of the case has passed a reasoned order. Accordingly, we do not find any infirmity in the order of the CIT(A) in Mudrika Labels Pvt ltd., Mumbai - 6 - deleting the penalty and uphold the same and dismiss the grounds of appeal of the revenue.
In the result, the appeal filed by the revenue is dismissed.
Order pronounced in the open court on 18.05.2021 Sd/- Sd/- (S RIFAUR RAHMAN) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 18.05.2021 KRK, PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. संबं�धत आयकर आयु�त / The CIT(A) 3. 4. आयकर आयु�त(अपील) / Concerned CIT �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Mumbai 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// 1.
( Asst. Registrar) ITAT, Mumbai