ITO 22 (1)(3), MUMBAI vs. CHIRAG J. MEHTA, MUMBAI

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ITA 2265/MUM/2019Status: DisposedITAT Mumbai08 December 2020AY 2010-114 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 tax effect in the appeal was below ₹.50 Lakhs and therefore, the appeal was not maintainable as per CBDT Circular No. 17/2019. No exceptions to the circular were applicable.

What were the facts?

The Revenue appealed against the deletion of penalty levied under Section 271(1)(c) by the CIT(A). The penalty was related to disallowance of bogus purchases made by the assessee.

What were the issues?

Whether the Revenue's appeal is maintainable due to low tax effect, and whether the penalty deletion by CIT(A) was correct.

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, MUMBAI BENCH “SMC”, MUMBAI

Before: SHRI C.N. PRASAD, HON’BLEShri Chirag J. Mehta

For Respondent: Shri Sanjay J. Sethi
Hearing: 18.11.2020Pronounced: 08.12.2020

O R D E R PER C.N. PRASAD (JM) This appeal is filed by the revenue against the order of the Learned Commissioner of Income Tax (Appeals)-34, Mumbai [hereinafter in short “Ld.CIT(A)”] dated 25.01.2018 for the A.Y. 2010-11 in deleting the penalty levied u/s. 271(1)(c) of the Act.

(A.Y: 2010-11) Shri Chirag J. Mehta 2. Revenue in its appeal has raised following grounds: "

1. "Whether on the facts and in the circumstances of the case and in law the Ld. CIT(A) is correct in deleting penalty holding that the assessee had made full and complete disclosure of all relevant particulars in its return of income, revised return and survey proceedings and has not furnished any inaccurate particulars of income.

2. The Ld. CIT(A) failed to see that the Assessee had originally filed return of Income on 30.09.2010 and then during survey on 04.12.2012 (approx. 2 years later) admitted additional income and bogus purchases and accepted the same of addition in assessment order passed on 01.03.2013.

3. The CIT(A) should have seen that but for survey conducted by the department, the Assessee would have stuck to returned income only and thereby not withdrawing the bogus purchases claim."

4. The appellant prays that the order of the CIT(A) on the above ground be reversed and that of the Assessing Officer be restored.

5. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.”

3.

At the time of hearing, Ld. AR submitted that tax effect on the issue in the present appeal is below ₹.50 Lacs and in view of the CBDT Circular No. 17/2019 dated 08.08.2019 in F.No.279/Misc.142/2007-ITJ (Pt), the appeal of the Revenue is not maintainable.

4.

On the other hand, Ld. DR submitted that this appeal is filed against deletion of penalty of ₹.45,53,396/- levied u/s.271(1)(c) of the Act on the disallowance made towards bogus purchases for the A.Y.2010-11.

(A.Y: 2010-11) Shri Chirag J. Mehta 5. We have heard the rival submissions, perused the grounds of appeal in these appeals and the orders of the authorities below. We find that the tax effect in this appeal is less than ₹.50 Lakhs and therefore the appeal of the revenue is not maintainable on account of low tax effect in view of the CBDT Circular No. 17/2019 dated 08.08.2019. We also observed that since the issue is in respect of levy of penalty u/s.271(1)(c) of the Act none of the exception in the circular are applicable. Accordingly, this appeal is dismissed for low tax effect.

6.

In the result, appeal of the revenue is dismissed.

Order pronounced on 08.12.2020 as per Rule 34(4) of ITAT Rules by placing the pronouncement list in the notice board.

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