DEPUTY COMMISSIONER OF INCOME TAX-9(2)(2), MUMBIA vs. M/S. CIRON DRUGS & PHARMACEUTICALS PVT. LTD, MUMBIA

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ITA 5485/MUM/2019Status: DisposedITAT Mumbai10 March 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 CBDT circular, which allows for appeals to be treated as not maintainable if the tax effect is below a certain limit, applies only to quantum assessment proceedings and not to penalty proceedings. Penalty proceedings are distinct from assessment proceedings.

What were the facts?

The Revenue filed an appeal against the order of the CIT(A) concerning a penalty imposed under Section 271(1)(c) for bogus purchases. The Revenue argued that the penalty should be considered in light of a CBDT circular regarding tax effect.

What were the issues?

Whether a CBDT circular concerning monetary limits for appeals in quantum assessment proceedings can be applied to penalty proceedings. The distinction between assessment and 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, ‘C‘ BENCH

Before: SHRI M.BALAGANESH, AM & SHRI RAVISH SOOD, JM &

For Respondent: Ms. Shreekala Pardeshi
Hearing: 10/03/2021Pronounced: 10/03/2021

आदेश / O R D E R PER M. BALAGANESH (A.M):

1.

This appeal in A.Y.2010-11 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-16, Mumbai in appeal No.CIT(A)-16/DCIT-9(2)(2)/IT-10001/2018-19 dated 31/05/2019 in the matter of imposition of penalty u/s.271(1)(c) of the Income Tax Act, 1961.

2.

The ld. DR argued vehemently that the penalty levied by the ld. AO in respect of disallowance made on bogus purchases. Accordingly, in the M/s. Ciron Drugs & Pharmaceuticals Pvt. Ltd., 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 this appeal 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.

3.

In the result, appeal filed by the revenue is dismissed as not maintainable.

Order pronounced in the open Court on 10/03/2021.

Sd/- Sd/- (RAVISH SOOD) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 10/03/2021 KARUNA, sr.ps

M/s. Ciron Drugs & Pharmaceuticals Pvt. Ltd.,

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