INCOME TAX OFFICER 9(2)(2), MUMBAI , MUMBAI vs. CAPRO VALVAS & CONTROLS PRIVATE LIMITED, MUMBAI

These appeals in 5981/Mum/2019 for A.Y.2009-10 & 2011-12 arise out of the order by the ld. Commissioner of Income Tax (Appeals)-16, Mumbai in appeal No.CIT(A)-16/IT-10385/ITO- 9(2)(2)/2018-19 & CIT(A)-16/IT-10386/ITO-9(2)(2)/2018-19 respectively dated 28/06/2019 (ld. CIT(A) in short) in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act (hereinafter referred to as Act).

The ld. DR argued vehemently that the penalty levied by the ld. AO in respect of disallowance made on bogus purchases. Accordingly, in the opinion of the ld. DR, the same would fall within the exception provided in the CBDT Circular No.17/2019 dated 08/08/2019. We find that the exception provided in the said Circular dated 08/08/2019 issued by the CBDT would apply only in respect of quantum assessment proceeding and the same cannot be made applicable for penalty proceeding and it is well settled that penalty proceeding and assessment proceedings are distinct and separate. In view of this, we are inclined to treat these appeals as not maintainable in view of the CBDT Circular No.17/2019 dated 08/08/2019 treating it as an appeal involving tax effect less than the prescribed monetary limit.

In the result, appeals filed by the revenue are dismissed as not maintainable.