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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI B.R.Baskaran & SHRI SANDEEP GOSAIN
Date of Hearing-03.04.2018 Date of Order –02.05.2018 O R D E R PER: SANDEEP GOSAIN, JUDICIAL MEMBER.
The present appeal has been filed by the assessee against the order of the Ld. CIT(A)-53, Mumbai, dated 30/12/2015 and pertains to AY 2011-12. The grounds of appeal read as under:-
The learned CIT (A) erred in confirming the Penalty Order 1. passed by the Assessing Officer u/s 271(1)(c) of the Income ./2016 Kalpataru Plus Sharyans Tax Act, 1961 amounting to Rs. 1,80,806/- on account of disallowance u/s 69C towards purchase of construction materials from suspicious dealers based on information available on the website of Sales Tax Department. The learned CIT (A) failed to appreciate that the Appellant has 2. made a true and full disclosure of material facts in the return of income and accompanying documents during the assessment proceedings, resulting in absolutely no case of either concealment or furnishing of inaccurate particulars of Income.
3. The learned CIT (A) erred in stating in its Order that the Appellant couldn't produce before the Assessing Officer or CIT (A), the documents related to Purchases in order to establish the genuineness of the Purchases. The learned CIT (A) failed to verify the details submitted by 4. the Appellant during the course of assessment proceedings vide submission dated 20.02.2014 submitting all the relevant documentary proofs evidencing genuineness of purchases i.e. copies of invoices, delivery challans, entry in the inward register at site, purchase orders, Bank Statements for proof of payment to respective parties and their ledger accounts. The learned CIT (A) erred in drawing adverse inferences of 5. the judicial rulings relied upon by the Appellant. The learned CIT (A) failed to consider the facts and law 6. applicable and endorsed the views and findings of the Assessing Officer. The conclusions of the learned CIT (A) are contrary to law and 7. facts on record and unsustainable in law. The learned CIT (A) erred in upholding levy of Penalty u/s 8. 271(1)(c) of the Income Tax Act, 1961.
The appellant craves leave to add, alter, amend, delete, and vary any or all the above grounds of appeal.
Brief facts of the case are that the assessee has filed its e-return of income on 23/09/2011 declaring total income of Rs. 8,64,860/-. The assessment was completed u/s 143(3) of the ./2016 Kalpataru Plus Sharyans Income Tax Act, on 26/02/2014 after making addition of Rs. 6,02,668/- u/s 69C of the Act on account of unexplained credit. During the assessment proceedings, it was found by the AO that assessee had not purchased any goods from the parties mentioned in the order of assessment, therefore, AO treated the purchases amounting to Rs.6,02,668/- as unexplained expenditure as per the provision of section 69C of the Act. Consequently, the penalty proceedings u/s 271(1)(c) of the Act was initiated against the assessee for that purpose. The AO also issued show cause notice u/s 274 r.w.s 271(1)(c) of the Act and after seeking reply and providing opportunity of hearing to the assessee, imposed penalty of Rs.1,80,806/- u/s 271(1)(c) of the Act for concealing particulars of income.
Aggrieved by the order of penalty u/s 271(1)(c) dated 27/08/2014, the assessee preferred appeal before the Ld. CIT(A) and the Ld. CIT(A) after considering the contentions raised by the assessee as well as the Revenue dismissed the appeal of the assessee and upheld and sustained the penalty.
Aggrieved by the order of the Ld. CIT(A), the assessee has filed the present appeal before us on the grounds mentioned hereinabove. ./2016 Kalpataru Plus Sharyans 5. At the very outset, the Ld. AR appearing on behalf of the assessee, drawn our attention to the order of assessment passed u/s 143(3) of the Act dated 26/02/2014, where the total income of the assessee is computed at Rs. 8,64,870/-. The Ld. AR submitted that original returned income filed by the assessee is also same i.e. `.8,64,860/- and when once the returned income and the assessed income is same then there is no evasion of amount of tax . In this respect, Ld. AR drawn our attention to explanation-4 to section 271 of the Act, which reads as under:-
[Explanation 4.—For the purposes of clause (iii) of this sub- section,— (a) the amount of tax sought to be evaded shall be determined in accordance with the following formula— (A - B) + (C - D) where, A = amount of tax on the total income assessed as per the provisions other than the provisions contained in section 115JB or section 115JC (herein called general provisions); B = amount of tax that would have been chargeable had the total income assessed as per the general provisions been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished; C = amount of tax on the total income assessed as per the provisions contained in section 115JB or section 115JC; D = amount of tax that would have been chargeable had the total income assessed as per the provisions contained in section 115JB or section 115JC been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished: Provided that where the amount of income in respect of which particulars have been concealed or inaccurate particulars have ./2016 Kalpataru Plus Sharyans been furnished on any issue is considered both under the provisions contained in section 115JB or section 115JC and under general provisions, such amount shall not be reduced from total income assessed while determining the amount under item D : Provided further that in a case where the provisions contained in section 115JB or section 115JC are not applicable, the item (C - D) in the formula shall be ignored; (b) where in any case the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has the effect of reducing the loss declared in the return or converting that loss into income, the amount of tax sought to be evaded shall be determined in accordance with the formula specified in clause (a) with the modification that the amount to be determined for item (A - B) in that formula shall be the amount of tax that would have been chargeable on the income in respect of which particulars have been concealed or inaccurate particulars have been furnished had such income been the total income; (c) where in any case to which Explanation 3 applies, the amount of tax sought to be evaded shall be the tax on the total income assessed as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice under section 148.]
It was further submitted that since, the assessed income and the returned income is same, therefore, the assessee do not fall under any of the provisions contained in explanation-4 and thus there is no evasion of any amount of tax by the assessee. Although, this plea has never been raised by the assessee before the Ld. Assessing Officer as well as Ld. CIT(A), but the same being legal in nature, is being considered at this stage.
We have heard the counsels of both the parties at length and we have also perused the material placed on record as well as ./2016 Kalpataru Plus Sharyans orders passed by the revenue authorities. We have also gone through the grounds of appeal raised by the assessee and entertain these grounds. From the record, we find that this plea has never been raised at any time or at any stage before the Revenue authorities. We are also of the view that this matter also needs verification, consequently, considering the interest of justice, we set aside the order of Ld. CIT(A) and remit the matter back to the file of AO with a direction to verify the same and thereafter pass afresh order keeping in view Explanation-4 of section 271(1)(c) of the I.T. Act. It is needless here to mention that before passing the order, the AO shall provide sufficient opportunity of hearing to the assesse. Before parting, we may make it clear that our decision to restore the matter back to the file of AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently in accordance with law.
In the net result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the Open Court on 02.05.2018