ACIT 12 (3)(2), MUMBAI vs. M/S LUTF FOODS PVT LTD., MUMBAI

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ITA 5945/MUM/2019Status: DisposedITAT Mumbai19 April 2021AY 2011-123 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's monetary limit for appeals applies to penalty proceedings and the exception for quantum proceedings is not applicable. Therefore, the Revenue's appeal was not maintainable.

What were the facts?

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

What were the issues?

Whether the CBDT's monetary limit for appeals, including its exceptions, applies to penalty proceedings. Whether an appeal by the Revenue is maintainable if the penalty amount falls below the prescribed monetary limit.

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 Vipul J Shah
For Respondent: Shri Brajendra Kumar, Shri Vipul J Shah
Hearing: 19/04/2021Pronounced: 19/04/2021

आदेश / O R D E R PER M. BALAGANESH (A.M): This appeal in A.Y.2011-12 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-21, Mumbai in appeal No.CIT(A)-21/ACIT-12(3)(2)/IT-561/2017-18 dated 30/05/2019 (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.

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 the open Court on 19/04/2021

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