SUNIL B VORANI,MUMBAI vs. INCOME TAX OFFICER 17(3) (4), MUMBAI

Sunil B. Vorani, ITO-17(3)(4), R. No. 111, 1st floor, 23 Shirin Mansion, 1st बिधम/ Aayakar Bhavan, floor 14, Kosla lane, Vs. Mumbai-400 020 Pydhonie, Mumbai-400 003 स्थायीलेखासं./जीआइआरसं./ PAN No. AAQHS3185J (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant : Shri Karan, AR by प्रत्यथीकीओरसे/Respondentby : Shri Vijay Kumar Menon, DR सुनवाईकीतारीख/ : 11.03.2021 Date of Hearing घोषणाकीतारीख / : 25.03.2021 Date of Pronouncement आदेश / O R D E R

Per S. Rifaur Rahman, Accountant Member:

5.12 Further, I have noted due circumspection the arguments advanced by the Ld. AR. However, I cannot concur with the argument that there is no element of concealment or inaccurate particulars for the simple reason that the appellant has not been able to establish & prove the veracity and the genuineness of the impugned purchases. Moreover, it is for the sake of the balance of convenience that the ITAT has reduced the percentage of the bogus purchase to be adopted as the income. Therefore, the element of inaccurate particulars is conspicuously present. Further, I also note that in the submissions of the A.R., numerous case laws have been quoted. However, on a careful perusal of the same, it is seen that rather than pin-point as to how and in what mode or manner do these precedents, apply to the instant case, the submissions seem to be a rambling exposition on the various aspects of different case laws. It is hardly pointed out as to how they are applicable to the peculiar facts of the appellant's case. Further, it is neither judicially expedient, nor prudent 3 Sunil B. Vorani to superimpose the facts of the case cited by the AR to the facts of the present case. In this sense, each case is undisputedly unique and stands on different pedestal.

5.13 Further, in the matter, it is relevant to note that in the scheme of section 271(1)(c), the infringement that leads to the .imposition of the penalty, is a civil liability and no MENS REA need to be proved. This was so held by the Hon’ble Supreme Court in the case Union of India vrs. Dharmendra Textile Processor(2007) 212 CTR (SC) 432. 5.14 One of the principle arguments of the appellant and as aforementioned is that when the addition is on estimated basis no penalty u/s.271(1)(c) can be levied. However, much as this argument would appear attractive on the face of it, the fact of the matter is that the same conveniently glosses over the aspect of the inability of the appellant to adduce at any stage of the proceedings key and important primary documentation to prove in any manner the veracity of the doubtful purchases. Therefore, it cannot be said that the conduct of the appellant is such so as to escape the rigours of the levy of the penalty u/s. 271(1)(c).

5.15 In view of the above discussion, I have no hesitation in upholding the penalty u/s.271(1)(c) to the tune of Rs.8,54,256/-. The same is therefore, confirmed

3. Aggrieved with the above order, assessee is in appeal before us raising the following grounds:-

1. Ld. Assessing officer erred in levying penalty u/s 271(1)(c), wherein the notice issued for levying penalty is in printed form and cyclostyle notice was issued without specifying under which limb the levy of penalty is proposed and Ld. CIT(A) erred in confirming the same.

2. Ld. Assessing officer erred in levying penalty u/s 271(1)(c) amounting to Rs. 8,54,256/- and Ld. CIT(A) erred in confirming the same.

4. Before us, Ld. AR appeared on behalf of the assessee submitted that AO levied penalty on account of bogus purchases without proposing in the notice whether it is concealment of income or furnishing of inaccurate particulars of income. He further submitted that merely making an estimation and enhancing the GP does not lead to concealment or furnishing of inaccurate particulars of income and invoking the jurisdiction of 5 Sunil B. Vorani section 271(1)(c) of the Act. In this respect, he relied on various decision of Hon’ble High Courts and Hon’ble Supreme Court and submitted that the levy of penalty imposed by AO and confirmed by Ld. CIT(A) may be deleted.

7 Sunil B. Vorani 8. After considering the totality of the facts and circumstances and while considering the series of judgments as mentioned above, we are of the view that there is no active concealment of income on the part of the assessee and additions made on estimation by the AO do not called for initiation of penalty. Thus, in our view, the penalty levied by AO and confirmed by Ld. CIT(A) is hereby deleted. Accordingly, the grounds raised by the assessee are allowed.