ACIT CIRCLE-1, KALYAN vs. SHRI. MAFATSINGH M PARMAR, KALYAN

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ITA 7461/MUM/2019Status: DisposedITAT Mumbai12 May 2021AY 2009-103 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 penalty proceedings are distinct from quantum assessment proceedings. The CBDT Circular No. 17/2019, which sets monetary limits for appeals, does not apply to penalty proceedings in this case.

What were the facts?

The Revenue filed appeals against the deletion of penalty imposed under Section 271(1)(c) for bogus purchases. The penalty was levied on an estimated addition made by the AO.

What were the issues?

Whether the appeals filed by the Revenue are maintainable before the Tribunal considering the monetary limits prescribed by CBDT Circular No. 17/2019, and if the exception for quantum proceedings applies 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, ‘B’ MUMBAI

For Respondent: Shri Tharian Oommen
Hearing: 12/05/2021Pronounced: 12/05/2021

आदेश / O R D E R PER C.N.PRASAD (JM): These appeals in 7462/Mum/2019 for A.Yrs.2009-10 & 2010-11 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-2, Mumbai in appeal No.10153/2018-19 & 10154/2018-19 dated 19/09/2019 (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 for both the years.

3.

We find at the outset, the ld AR argued that penalty that is in dispute before us, for each of the years, 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 cases fall within the exception provided in para 10(e) of the said Circular and accordingly he argued that the appeals are 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 these appeals of the Revenue by following the aforesaid Circular No.17/2019 dated 08/08/2019 and hold that the appeals of the Revenue are not maintainable.

4.

In the result, appeals of the Revenue are dismissed.

Order pronounced in open Court on 12/05/2021.

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