ITO 31 (1)(5), MUMBAI vs. GAUTAM ASHOK VARSHNEY, MUMBAI

Aforesaid appeals by revenue for Assessment Years [in short referred to as ‘AY’] 2010-11 and 2011-12 contest common order of Ld. Commissioner of Income-Tax (Appeals)-42, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No.CIT(A)-42/IT-315/16-17 and CIT(A)-42/IT- -88/Mum/2018 Gautam Ashok Varshney Assessment Years: 2010-11 & 2011-12 314/16-17 dated 21/06/2018. In the said appeal, Ld. CIT(A) has deleted penalty of Rs.28,595/- & Rs.50,683/- for AYs 2010-11 & 2011-12 respectively as levied by Ld. AO u/s 271(1)(c) vide separate penalty orders dated 28/09/2016. Upon perusal of penalty order passed by Ld. AO, it is evident that penalty was levied on account of estimated additions against alleged bogus purchases.

None has appeared for assessee and no valid adjournment application is on record. Therefore, the matter was proceeded with ex- parte qua the assessee since the revenue’s appeals are, prima facie, covered by latest low tax effect Circular No.17/2019 dated 08/08/2019 [F.No.279/Misc. 142/2007-TTJ(Pt.) issued by CBDT. 3. The Ld. DR submitted that the penalty was levied on account of alleged bogus purchases as per information received from Sales Tax Department, Maharashtra and therefore, the appeal would be covered by exception given in the said circular. 4. Upon perusal of case records, prima facie, it appears that the tax effect of quantum of penalty being contested by the revenue is less than prescribed limit of Rs.50 Lacs in both the years and the same 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. So far as the contentions raised by Ld. DR are concerned, we are of the considered opinion that quantum proceedings and penalty proceedings were separate proceedings and the circular would apply to each proceeding separately. No separate exception has been provided in any -88/Mum/2018 Gautam Ashok Varshney Assessment Years: 2010-11 & 2011-12 of the circular with respect to quantum of penalty. In view of the same, we dismiss both the appeal. 5. At the same time, a liberty is given to revenue to seek recall of any 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. 6. In the result, both the appeals stand dismissed. Order pronounced in the open court on 06th January, 2020. Sd/- Sd/- (Ravish Sood) (Manoj Kumar Aggarwal) �ाियक सद� / Judicial Member लेखा सद� / Accountant Member मुंबई Mumbai; िदनांक Dated : 06/01/2020 Sr.PS, Jaisy Varghese आदेशकी�ितिलिपअ�ेिषत/Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. 2. ��थ�/ The Respondent 3. आयकरआयु�(अपील) / The CIT(A) 4. आयकरआयु�/ CIT– concerned 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, मुंबई/ DR, ITAT, Mumbai 6. गाड�फाईल / Guard File