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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: HON’BLE SHRI MAHAVIR SINGH, VP & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeals by revenue for Assessment Years [in short referred to as ‘AY’] 2010-11 & 2011-12 contest separate orders of learned first appellate authority. However, the facts as well as issues are identical in both the appeals and adjudication in any appeal shall equally apply to the other appeal also. The appeal for 2 & 2508/Mum/2019 SIP Tools Assessment Years: 2010-11 & 2011-12 AY 2010-11 contest the order of Ld. Commissioner of Income-Tax (Appeals)-2, Pune [in short referred to as ‘CIT(A)’], Appeal No. 585/2017-18 dated 29/01/2019 which has deleted penalty of Rs.2.37 Lacs as levied by learned Assessing Officer (AO) u/s 271(1)(c) vide penalty order dated 31/08/2015.
Though none appeared for assessee but the material on record was sufficient for disposal of appeals and therefore, the matter was proceeded with for adjudication after hearing Ld. DR, who pleaded for restoration of penalty as levied by Ld. AO.
The impugned penalty stem from the fact that that an assessment was framed against the assessee for the year under consideration u/s 143(3) r.w.s. 147 on 11/02/2015, wherein the assessee was saddled with certain additions of Rs.7.67 Lacs on account of alleged bogus purchases. Consequently, penalty proceedings were initiated u/s 271(1)(c) in the assessment order against those additions for concealing the particulars of income or furnishing inaccurate particulars of income.
During penalty proceedings, the assessee submitted that purchases were genuine and the payment was made to the suppliers through account payee cheques. The purchases remained unverifiable due to non-compliance of provisions relating to VAT by the selling dealers and therefore, the penalty was unjustified. However, rejecting the same, Ld. AO levied penalty of Rs.2.37 Lacs for concealment of income as well as for furnishing inaccurate particulars of income.
Upon further appeal, Ld. CIT(A), relying upon the decision of Hon’ble Apex Court in CIT V/s SSA’s Emerald Meadows 386 ITR 3 & 2508/Mum/2019 SIP Tools Assessment Years: 2010-11 & 2011-12 13 as well as the decision of Hon’ble Karnataka High Court in CIT V/s Manjunatha Cotton and Ginning Factory 359 ITR 565, held that Ld. AO failed to specify the exact charge against the assessee for which the assessee was being penalized. There was lack of clarity in correct application of specific charge i.e. concealment of income or furnishing of inaccurate particulars of income and therefore, the penalty was to be deleted. Aggrieved, the revenue is in further appeal before us.
Upon due consideration of impugned order, we concur with the conclusion of Ld. CIT(A) that there was failure on the part of Ld. AO to specify exact charge for which the assessee was being penalized. There was lack of clarity in correct application of specific charge i.e. concealment of income or furnishing of inaccurate particulars of income. The failure to do so would vitiate penalty proceedings in terms of binding judicial precedents as relied upon by Ld. CIT(A). Therefore, no fault could be found in the impugned order in cancelling the penalty. The appeal stand dismissed.
Since the facts as well as issues are identical in revenue’s appeal for AY 2011-12, our adjudication as above shall mutatis mutandis apply to this year also. The appeal stand dismissed.
Both appeals stands dismissed. Order pronounced on 01st February, 2021.