ACIT CIRCLE-3, KALYAN vs. UMASHANKAR RAMADIN SHARMA, THANE

At the time of hearing of appeal, none appeared for assessee. However, after going through the appeal papers, it transpires that the revenue’s appeals are not maintainable on account of low tax effect in terms of CBDT vide Circular No. 17/2019 dated 08/08/2019 [F.No.279/Misc. 142/2007-TTJ(Pt.).

The Ld. DR submitted that penalty on addition on account of alleged bogus purchases should be construed to be covered by exception clause 10(e) of the circular since the same was levied on account of quantum additions which was based upon receipt of information from an external agency i.e. Sales Tax Department. 3. We have considered the said submissions. It is settled legal position that quantum proceedings and penalty proceedings are independent and distinct proceedings and confirmation of additions may not be the sole ground for confirming the penalty. Extending the same logic, unless specific exception is provided in the circular with respect to penalty also, it could not be construed that the penalty was to be treated at par with quantum additions. The clause 10(e) specifically applies only to additions which are based on information received from external sources. The levy of penalty, by no stretch of imagination, could be construed as addition as envisaged by clause 10(e). Therefore, the submissions made by Ld. DR could not be accepted. 4. In view of the foregoing, all the three appeals stand dismissed. However, a liberty is given to revenue to seek recall of any of the appeals, if at a later stage, it is found that the matter is covered by any exceptions provided in any of the circular or in case the tax effect in the appeals exceeds the prescribed monetary limit.