ITO 27 (1)(2), MUMBAI vs. BABU VENKETY GOSULA, MUMBAI

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ITA 5732/MUM/2018Status: DisposedITAT Mumbai14 January 2020AY 2009-103 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 quantum and penalty proceedings are separate. The appeal was dismissed as it was covered by the low tax effect circular, despite the Revenue's contention about external information.

What were the facts?

The Revenue appealed against the deletion of a penalty of Rs. 60,211 levied on estimated bogus purchases. The penalty was levied by the AO based on information from an external agency.

What were the issues?

Whether the low tax effect circular applies to penalty proceedings when the quantum additions were based on external information. Whether quantum and penalty proceedings are treated separately for the purpose of circulars.

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, “B” BENCH, MUMBAI

Before: HON’BLE SHRI MAHAVIR SINGH, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Respondent: Ms. Kavita P. Kaushik-Ld. DR

Assessee by : None Revenue by : Ms. Kavita P. Kaushik-Ld. DR सुनवाई की तारीख/ : 14/01/2020 Date of Hearing घोषणा की तारीख / : 14/01/2020 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. In the aforesaid appeal for Assessment Year (AY) 2009-10, the revenue is aggrieved by deletion of penalty of Rs.60,211/- by learned first appellate authority. The penalty under dispute was levied by Ld. AO vide penalty order dated 29/09/2015 against estimated additions @ 12.5% of alleged bogus purchases.

2 Babu Venkety Gosula Assessment Year :2009-10 2. None has appeared for assessee and no valid adjournment application is on record. Therefore, the matter was proceeded with ex- parte qua the assessee in view of the fact that the appeal is covered by low tax effect Circular No.17/2019 dated 08/08/2019 issued by Central Board of Direct Taxes [CBDT].

3.

Upon perusal of case records, it transpires that the quantum of penalty under dispute, being contested by the revenue, is less than prescribed limit of Rs.50 Lacs and the appeal is covered by recently issued low tax effect Circular No.17/2019 dated 08/08/2019 issued by Central Board of Direct Taxes [CBDT]. This recent circular further enhances the monetary limit fixed in earlier Circular No.3 of 2018 dated 11/07/2018 issued by CBDT as amended on 20/08/2018. The Ld. DR has submitted that quantum additions were made pursuant to receipt of certain information from an external agency viz. Sales Tax Department and therefore, the appeal would be covered by the exceptions provided under the circular. However, we are of the considered opinion that quantum proceedings and penalty proceedings are separate proceedings and the circular would apply to each proceeding separately. No separate exception has been provided in any of the circular with respect to quantum of penalty. In view of the same, we dismiss the appeal.

4.

At the same time, a liberty is given to revenue to seek recall of the appeal, if at a later stage, it is found that the matter is covered by any exceptions provided in any of the circular or in case the tax effect as agitated by revenue exceeds the prescribed monetary limit.

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