GORUR INFRA PROJECTS PRIVATE LIMITED,NEW PANVEL vs. DY. CIT, PANVEL CIRCLE, PANVEL
What did the Tribunal hold?
The Tribunal held that since the AO, in effect, allowed the deduction under Section 80IA(4) on the income from bogus purchases, the penalty for furnishing inaccurate particulars related to those purchases does not survive. Therefore, the penalty imposed by the AO and confirmed by the CIT(A) was not justified.
What were the facts?
The Assessing Officer (AO) made additions for bogus purchases and under Section 80IA(4). The CIT(A) partially confirmed the additions and granted relief under Section 80IA(4). The ITAT dismissed the Revenue's appeal on Section 80IA(4) due to low tax effect.
What were the issues?
Whether the penalty under Section 271(1)(c) is sustainable when the income, initially treated as bogus purchases, was later allowed as a deduction under Section 80IA(4).
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI
आदेश / ORDER
PER S.S. VISWANETHRA RAVI, JM :
This appeal by the assessee against the order dated 01-10-2019 passed by the Commissioner of Income Tax (Appeals)-2, Thane [„CIT(A)‟] for assessment year 2010-11.
The only issue is to be decided is as to whether the CIT(A) is justified in confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act in the facts and circumstances of the case.
Heard both the parties and perused the material available on record. We note that the AO initially completed the assessment u/s. 143(3) of the Act vide its order dated 26-03-2013 wherein he determined the total income of the assessee at Rs.3,20,80,770/- against the Nil return inter alia making addition u/s. 80IA(4) of the Act and on account of bogus purchases to an extent of Rs.90,84,435/- and Rs.2,29,96,335/-, respectively. Against which, the assessee preferred an appeal before the CIT(A) wherein the CIT(A) partially confirmed the order of AO in respect of bogus purchases and gave relief u/s. 80IA(4) of the Act by holding that the assessee is entitled to claim exemption u/s. 80IA of the Act. The ld. AR submits that the appeal filed by the Revenue against the relief given by the CIT(A) u/s. 80IA(4) of the Act was dismissed by this ITAT being low tax effect and directed the AO to consider the issue of bogus purchases keeping in view of eligibility of assessee is also part of profit u/s. 80IA(4)(b) of the Act. We note that the AO passed order u/s. 143(3) r.w.s. 254 r.w.s. 144B of the Act giving effect to the orders of ITAT which is at Page No. 2 of the paper book. On perusal of Para No. 4 of the assessment order dated 29-09-2021 we note that the AO added the bogus purchases to the total income of the assessee and held that the assessee is eligible for deduction as per the provisions of section 80IA(4) of the Act. Therefore, when the AO initiated penalty proceedings initially u/s. 271(1)(c) of the Act in view of the finding during the original assessment proceedings u/s. 143(3) of the Act for furnishing inaccurate particulars of income in terms of the bogus purchases which were treated by the AO in terms of directions of ITAT same as part of income which resulted into increase of income which is eligible for deduction u/s. 80IA(4) of the Act. Therefore, the penalty as imposed by the AO on account of furnishing inaccurate particulars relating to the bogus purchases does not survive. Thus, the penalty imposed by the AO as confirmed by the CIT(A) is not justified. Thus, the order of CIT(A) is not justified and grounds raised by the assessee are allowed.
In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 17th January, 2022.
Sd/- Sd/- (R.S. Syal) (S.S. Viswanethra Ravi) VICE PRESIDENT JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 17th January, 2022. रवव आदेश की प्रनिलऱपप अग्रेपषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. 3. The CIT(A)-2, Thane 4. The Pr. CIT-2, Thane ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, “ए” बेंच, 5. ऩुणे / DR, ITAT, “A” Bench, Pune. गार्ड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रतत// True Copy// आदेशानुसार / BY ORDER,
वररष्ठ तनजी सधचव / Sr. Private Secretary आयकर अऩीऱीय अधधकरण ,ऩुणे / ITAT, Pune
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