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Income Tax Appellate Tribunal, BENCH “C”, MUMBAI
Before: SHRI R.C.SHARMA & SHRI PAWAN SINGH
O R D E R PER PAWAN SINGH, JM: 1. These two appeals are filed by the Revenue against the order of CIT(A)-13, Mumbai dated 01.09.2004 for AY 2009-10 & 2010-11 wherein the penalty levied u/s 271(1)(c) of the Act was deleted. As in both the appeals, identical Grounds of appeal are raised by the Revenue, thus both the appeals were heard together and are decided by a common order.
2. First we shall take up the appeal for AY 2009-10. Brief facts as emanated from the records of the case are that the assessee filed return of income for relevant AY on 30.09.2009 declaring total income at Rs.6,41,55,373/-. The assessment was completed on 28.03.2013 u/s 143(3) r.w.s. 147 of the Act, the determining the total income at Rs. 7,37,96,348/-. The AO received information from DJIT (Investigation), Mumbai regarding bogus purchases as informed by the Sale Tax Authorities. As informed by DJIT(I) the assessee was one of the beneficiary for the transaction of Rs. 86,26,469/-. An addition on account of bogus purchases of Rs. 86,26,469/- was added to the income of assessee u/s 69C of the I.T. Act. After addition u/s 69C, penalty proceeding u/s 271(1)(c) was initiated against the assessee for furnishing inaccurate particulars and concealment of income. The assessee was served with a notice of initiation of penalty. The assessee furnished his reply vide reply dated 06.08.2013. In the reply, the assessee contended that they neither concealed nor furnished inaccurate particulars of income. The assessee further contended that the Income-tax Department has issued press release dated 08.03.2013 which has also appeared on Government of India’s Press Information Bureau website under reference PIB release/MH/61 dated 08.03.2013 and also reports from the Economic Times and Times of India dated 09.03.2013 wherein it was reported that large number of tax payer have obtained the bogus bill for non-genuine purchases or expenses, from the field of Hawala dealer and use such bills to suppress from taxable income. Bogus bills were issued by the Hawala dealers to the beneficiaries without actual dispatch of goods. The Income-tax Department investigated the case based on inputs received from VAT/Sale Tax Department of Maharashtra, which has detected more than 2,000/- cases of evasion in the State. The I.T. Department has asked the assessee/tax payer, who have availed such bogus bills to come forward voluntary and disclosed correct state of affair by filing the returns/revised returns and paid requisite tax by 15th of March 2015 which is also the last date for payment on advance tax. As per the press release, the assessee paid the tax on the disputed amount with interest before completion of assessment and re- opening of the assessment and instead of pursuing the appeal, the assessee accepted it to buy peace to concentrate on their business. The contention of the assessee was not accepted by the AO and the AO levied the penalty u/s 271(1)(c) of the Act of Rs. 2,93,300/- being 100% of the tax sought to be evaded. Aggrieved by the order of AO, the assessee filed appeal before the CIT(A). Ld. CIT(A) deleted the entire penalty in the impugned order dated 01.09.2014. Aggrieved by the order of CIT(A), the Revenue has filed the present appeal before us.
We have heard Ld Departmental Representative (DR) for Revenue and Ld Authorised Representative (AR) for assessee and perused the material available on record. Ld. DR for Revenue relied upon the order of AO and prayed that the order of CIT(A) be set-aside and the order passed by the AO may be restored. On the contrary, Ld. AR for assessee strongly opposed the submission made by the DR for Revenue and argued that the purchases made by assessee were genuine one. The assessee has not availed any accommodation entry. The assessee furnished complete set of purchases made from the parties which includes Ledger Account, Purchase invoice, Delivery challans, Lorry receipts, Goods receipt notes, indent from works, Purchase order, Payment approval voucher and the statement of banking transaction. AR of the assessee further argued that the assessee has not filed any appeal as they were motivated by the press release of I.T. Department that the penalty cannot be levied in case, tax is paid by the end of 15th March 2013.
We have considered the rival contentions of the parties and further perused the material available on record. In the present case, the penalty was levied on the addition of impugned bogus purchases of Rs. 86,26,469/-. Against the addition on account of bogus purchases, no appeal was filed by the assessee. The assessee paid the due tax on the addition made u/s 69C on the basis of press release of I.T. Department. The Revenue has not disputed the press release issued by the I.T. Department asking the assessee/tax payer, who availed of such impugned bills/bogus bills to come forward voluntary and disclosed correct state of affair by filing return and paying requisite tax by 15th of March 2013.
The assessee is among the one of such person, who instead of filing appeal/contesting the case further submitted before the various Forums of I.T. Department paid the tax on impugned purchases. All these facts were considered by the CIT(A). The CIT(A) after considering the case of AO, material available on record and the contention raised by assessee passed the following order: “3.9. In the instant case, it is nor disputed that the appellant have firstly informed the AO that they are paying the taxes alongwith interest in compliance to the said press release and then again offer having paid all the taxes and interest, assessee have informed once again that they have done so. It is clear that the appellants conduct goes in their favour to the extent that they have got the immunity for these A.Y.s involved by complying to the said press release dated 08.03.2013. Thus the appellant who have been found having furnished inaccurate particulars as well as concealed income for AY.2009-10 which was assessed u/s.143(3) r.w.s. 147 and thus were liable for imposition of penalty u/s.271(1)(c) as per the provisions, but for the press release issued by the department . The said press release expressed two specific requirements i.e. tax payer have to do so voluntarily and then have to pay tax and interest by 15/03/2013, and both of which having done by the appellant, have gone to their advantage. In view of this, though I am of the considered view that penalty u/s.271(1)(c) was attracted as per provisions of the Act in normal course for furnishing inaccurate particulars as well as concealment of income, is not leviable for the reasons that a press release was issued by the department on this specific issue and appellant complied with the same, following the ratio of decision in case of Bombay Cloth Syndicates vs CIT(cited. Supra). Accordingly penalty levied u/s.271(1)(c) of the Act, for AY.2009-10 for an amount of Rs.29,33,000j-and penalty levied of Rs.19,03,310/- for AY.2010-11, being not sustainable are deleted herewith in appeal No.230/13-14 and appeal no.437/13-14 respectively. The ground taken by appellant in these two appeals are allowed.”
We have carefully gone through the order of CIT(A). While passing the impugned order, following the ratio of Bombay Cloth Syndicate vs. CIT (1995) 79 taxman 352 (Mum) and deleted the penalty. The order of Ld. CIT(A) is reasoned one and does not suffer from any illegality or infirmity, hence, does not require any interference at our end, thus, the appeal filed by Revenue is dismissed. – AY-2010-11 6. The Revenue has raised the identical Grounds of appeal in the present appeal as well. We have dismissed the appeal of Revenue for AY 2009-10, and the facts