MOULIMANI IMPEX PVT LTD,MUMBAI vs. INCOME TAX OFFICER- 1(1)(3), SURAT, SURAT

on or before the date of hearing.”

3. The grounds of appeal raised by the assessee (ITA No.534/SRT/2025) are as follows: “1. Ground 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming penalty u/s 271(1)(c) of the 1 Income Tax Act, 1961 on the basis of invalid penalty order in which the limb of levy of penalty under section 271(1)(c) of Income Tax Act, 1961 not mentioned.

2. Ground 2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming penalty of Rs.1,61,620/- under section 271(1)(c) of Income Tax Act, 1961 without passing speaking order.

3. Ground 3. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to considered that the penalty is not leviable when the addition is made on estimation basis.

4. Ground 4. Appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.”

4. The grounds of appeal raised by the assessee (ITA No.535/SRT/2025) are as follows: “1. Ground 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming penalty u/s 271(1)(c) of the 1 Income Tax Act, 1961 on the basis of invalid penalty order in which the limb of levy of penalty under section 271(1)(c) of Income Tax Act, 1961 not mentioned.

2. Ground 2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming penalty of Rs.53,309/- under section 271(1)(c) of Income Tax Act, 1961 without passing speaking order. to 535 & 536/SRT/2025/AY 2009-10 to 2011-12 & 2012-13 Moulimani Impex Pvt. Ltd.

5. The grounds of appeal raised by the assessee (ITA No.536/SRT/2025) are as follows: “1. Ground 1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming penalty u/s 271(1)(c) of the Income Tax Act, 1961 on the basis of invalid penalty order in which the limb of levy of penalty under section 271(1)(c) of Income Tax Act, 1961 not mentioned. Ground 2. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming penalty of Rs. 1,34,591/-under section 271(1)(c) of Income Tax Act, 1961 without passing speaking order. Ground 3. On the facts and circumstances of the case and law, 3 the Ld. CIT(A) failed to consider that the penalty is not leviable when the addition is made on estimation basis. Ground 4. Appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.”

6. The appeals filed by the assessee are late by 66 days in terms of provisions of section 253(3) of the Act. The assessee has filed an affidavit for condonation of delay in filing of appeal before the Tribunal. It has been stated that notices of hearing were issued to the wrong e-mail Id, i.e., ‘moulimaniImpexpl@gmail.com’ instead of ‘gandhi.himanshu92@yahoo.in’, which was mentioned in Form

35. The CIT(A) passed order on 23.12.2024 and due date for filing of appeal before the Tribunal on 28.02.2025. It came to know about the appeal order while checking the status in Income-tax Portal. The learned Authorized Representative (ld. AR) of the assessee submitted that the to 535 & 536/SRT/2025/AY 2009-10 to 2011-12 & 2012-13 Moulimani Impex Pvt. Ltd. delay in filling appeal neither malafide nor deliberate on the part of the appellant. He requested that in the interest of justice, the delay may be condoned and admitted for hearing. On the other hand, the learned Senior Departmental Representative (ld. Sr. DR) for the revenue did not have any objection, if the delay is condoned.

(AY 2009-10): 8. The facts of the case in brief are that the assessee filed its return of income u/s 139(1) of the Act, declaring total income of Rs.3,67,560/- on 19.09.2009. A search and seizure action u/s 132 of the Act was conducted in case of Rajendra Jain and other groups on 03.10.2013. The seizure made at the premises of Rajendra Jain at C-805, Oberoi Splendor Building, JVL Road, Andheri (E), Mumbai comprises of computer back-up, mobile and two pen drives, which contains detail of group companies including details of Moulimani Impex Pvt. Ltd, the appellant of the instant appeal. The appellant was engaged in the business of providing accommodation entries by way of name of bogus sales, to 535 & 536/SRT/2025/AY 2009-10 to 2011-12 & 2012-13 Moulimani Impex Pvt. Ltd. purchases and unsecured loans. Accordingly, notice u/s 153C of the Act was issued and the appellant was treated as an accommodation entry provider. It was held that assessee was not doing any actual business and earned only commission income on sales, import and loan entries. Hence, the books of account of the assessee were not found to be reliable and were accordingly rejected u/s 145(3) of the Act. Thereafter, assessment was completed by assessing income on estimated commission basis. The Assessing Officer (in short, ‘AO’) estimated the total commission income at Rs.17,05,473/-. He allowed deduction of 25% for paper transactions and related cost from the above estimated commission and computed the commission income at Rs.12,79,105/- (17,05,473 – 4,26,368). He estimated commission @0.02%, @0.20% and @0.50% on total turnover (excluding import and group turnover), import and the outstanding loan respectively. The AO also initiated penalty u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. 8.1 Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). the CIT(A) dismissed the quantum appeal filed by the assessee. It may be mentioned that the ITAT has also dismissed the appeal of the assessee against the order of CIT(A). During the pendency of appeal before the Tribunal, the AO levied penalty, which was also confirmed by the CIT(A). The AO levied the penalty by observing that the assessee had not carried out any business activity and, hence, various data, such as purchases, sales, loans etc. disclosed in the return of income were bogus. Therefore, assessee had furnished inaccurate to 535 & 536/SRT/2025/AY 2009-10 to 2011-12 & 2012-13 Moulimani Impex Pvt. Ltd. particulars of income. During penalty proceedings, the assessee requested to keep the proceedings in abeyance because appeal had been filed before ITAT. The AO did not accept the request of the AO. He referred to Explanation - 1 below section 271(1), which raises a presumption that the amount added or disallowed in computing the total income shall be deemed or represents the income in respect of which particulars have been concealed or inaccurate particulars have been furnished. Hence, he levied minimum penalty of Rs.2,81,669/- u/s 271(1)(c) of the Act. In the appeal before the CIT(A), the appellant submitted that the issue is already decided by the jurisdictional Surat Tribunal in case of its sister concern, M/s Nazar Impex Pvt. Ltd. vide order in & 133/SRT/2021, dated 30.03.2022. The appellant also submitted that penalty cannot be levied just because assessed income is higher than the returned income. Further, the AO himself is not sure whether income is assessable in the hands of the appellant or Shri Rajendra Jain. It was also submitted that when commission income was computed on estimation basis, penalty cannot be levied. The appellant relied on various decisions, which are reproduced at pages 6 to 10 of the appellate order. It was also submitted that the penalty notice itself was bad in law, therefore, no penalty can be imposed. However, the contention of the assessee was not accepted and the CIT(A), primarily on the basis of the reasons given by the AO, upheld the penalty levied u/s 271(1)(c) of the Act. to 535 & 536/SRT/2025/AY 2009-10 to 2011-12 & 2012-13 Moulimani Impex Pvt. Ltd.

7. Considering the fact that addition in the assessment order, on the basis of which the penalty was levied, is purely an estimated addition. It is settled position in law that no penalty under section 271(1)(c) can be levied on additions made on estimation. The similar view was taken by the Hon'ble Jurisdictional High Court in Manish Dhirajlal Mehta Vs. ACIT, Vijay Proteins Ltd., Vs. CIT (supra), in Vijay Proteins Vs CIT (supra) and other various cases. No to 535 & 536/SRT/2025/AY 2009-10 to 2011-12 & 2012-13 Moulimani Impex Pvt. Ltd. contrary facts or law is brought to our notice by the ld. Sr. DR for the revenue at the time of hearing of these appeals. Therefore, considering the totality of facts and circumstances, we direct to delete the penalty levied under Section 271(1)(c) of the Act.” 11.1 Following the above decision, the ITAT deleted similar penalty levied u/s 271(1)(c) in case of Sanjay Kumar Chaudhary (HUF) (supra). The relevant para is reproduced below for ready reference: “8. I note that penalty on estimation addition should not be levied and this issue is no longer res integra and has been decided by the Co-ordinate Bench of ITAT, Surat in the case of Nazar Impex Pvt. Ltd. (supra), wherein the penalty levied on estimation was deleted by the Tribunal, therefore respectfully following the binding precedent of Co-ordinate Bench in the case of Nazar Impex Pvt. Ltd. (supra), I delete the penalty.”

535 & 536/SRT/2025 (AYs.2010-11, 2011-12 & 2012-13): 14. The facts and grounds taken up by the appellant are similar in these appeals as in (AY.2009-10), decided above. Following the to 535 & 536/SRT/2025/AY 2009-10 to 2011-12 & 2012-13 Moulimani Impex Pvt. Ltd. reasons given in the said appeal, the AO is directed to delete the penalties levied u/s 271(1)(c) of the Act in all three years.