ITO 32 (1)(1), MUMBAI vs. MS ALKA NARENDRA MADHANI, MUMBAI

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ITA 6806/MUM/2019Status: DisposedITAT Mumbai10 May 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 penalty proceedings are distinct from quantum assessment proceedings. The exception mentioned in CBDT Circular No. 17/2019 for quantum proceedings is not applicable to penalty proceedings.

What were the facts?

The Assessing Officer levied penalty under Section 271(1)(c) on estimated additions made for bogus purchases. The CIT(A) deleted this penalty, holding that no penalty can be levied on estimated additions.

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on estimated additions, and whether CBDT Circular No. 17/2019 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, ‘A’ MUMBAI

For Appellant: Shri Jitendra Singh
For Respondent: Shri Brajendra Kumar, Shri Jitendra Singh
Hearing: 10/05/2021Pronounced: 10/05/2021

आदेश / O R D E R PER M. BALAGANESH (A.M): These appeals in 6807/Mum/2019 for A.Y.2010-11 & 2011-12 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-44, Mumbai in appeal No.CIT(A)-44/ITO- 32(1)(1)/IT-126/18-19 & CIT(A)-44/ITO-32(1)(1)/IT-132/18-19 dated 30/08/2019 (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’)

1.

2 & 6807./Mum/2019 Ms. Alka Narendra Madhani 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 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 10/05/2021.

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