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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH, JM
Assessee by: Shri N. R. Agarwal & Manish N. Shah Department by: Shri B. D. Naik सुनवाई क" तार"ख / Date of Hearing: 23.05.2016 घोषणा क" तार"ख /Date of Pronouncement: 13.07.2016 आदेश / O R D E R PER AMARJIT SINGH, JM:
The above mentioned appeals have been filed by the assessee against the orders dated 1-9-2010 and order dated 30-08-2013 passed by the Commissioner of Income Tax (Appeals)-31, Mumbai & 6084/M/13 A.Y. 2006-07 [hereinafter referred to as the “CIT(A)”] relevant to the 2006-07. The assessee has challenged the quantum of order and penalty order passed by Assessing Officer which have been confirmed by the CIT(A) under order challenged.
The brief facts of the case are that the assessee filed return of income on 31.10.2006 declaring total income to the tune of Rs.1,89,850/-. The source of income was declared as business income from the proprietary concern viz. M/s. N. R. Gems and bank interest of Rs.333/-. The return was processed under section 143(1) of the Income Tax Act, 1961 ( in short “the Act”). Notice u/s.148 of the Act dated 24.03.2009 was issued and served upon the assessee because the income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. Thereafter, the assessee relied upon the income which he had filed earlier. Thereafter, the assessment was completed by assessing bogus transactions to the tune of Rs.32,23,879/-on the bill dated 18.05.2005 and assessed the income to the tune of Rs.34,13,340/-. Thereafter, the assessee filed an appeal before learned CIT(A) who confirmed the order passed by the Assessing Officer, therefore the assessee filed the present appeal before us.
The assessee has raised the following grounds of appeal:- A.Y. 2006-07 "1. The assessment order is bad in law on the facts and circumstances.
2. On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in adding a sum of Rs.32,23,819/- by way of disallowing claim of appellant towards non-existence of purchases from M/s.Zalak Impex. Disallowance being bad in law needs to be cancelled.
3. On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in not providing natural justice to appellant by not confronting any material and / or cross examination of the concerned parties. Disallowance being bad in law needs to be cancelled.
4. On the facts and in the circumstances of the case and in law, the learned Assessing Officer has erred in levying interest Under Sections 234B, 234C & 234D which needs to be deleted.”
Additional Ground:- “1. The learned CIT(A) erred in dismissing the appeal on the ground that Though no notice u/s.143(2) is issued by A.O., Assessee has not raised objection before A.O., hence u/s.292BB grievance of the appellant is untenable or not acceptable.”
The assessee has raised the following “1. On the fact and circumstances of the case and in law, the order of the CIT(A) is bad in law and needs to be cancelled. 2. Without prejudice to para 1 above, A.Y. 2006-07 On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the penalty levied by the learned Assessing Officer u/s.271(1)(c) of the Income Tax Act, 1961 amounting to Rs.10,29,038/- on account of filling of inaccurate particulars of income and also for concealing particulars of income. The reason for upholding the penalty is wrong and insufficient. Order of penalty being bad in law needs to be cancelled. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not providing natural justice to appellant by not confronting any materials and / or cross examination of the concerned parties. Order of penalty being bad in law needs to be cancelled. 4. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in stating that the assessee has not substantiated his claim of purchase made from M/s.Zalak Impex and therefore upheld the levy of penalty u/s.271(1)(c). Order of penalty being bad in law needs to be cancelled. ” Addl. Ground of the ITA.N 1815/m/10
We have heard the arguments advanced by the learned representative of the parties and perused the record. The learned representative of the assessee has argued that the present case is the case taken up u/s.147 of the Act wherein notice u/s.143 of the Act was not issued by the Assessing Officer, therefore, the proceeding u/s.147 of the Act is wrong against law and facts and is liable to be set aside. He also placed reliance of the law settled in CIT Vs. Mr. Salman A.Y. 2006-07 Khan I.T. Appeal no. 2362 of 2009 dated 01.12.2009 (Bombay High Court) and Kuber Tobacco Products (P) Ltd. Vs. DCIT 18 DTR 1 (Delhi Special Bench). It is also argued that the present case is of the A.Y.2006-07 whereas the section 292BB of the Act was having different facts from the present case, therefore the said provision is not applicable to the present case. On the other hand, the learned representative of the department has placed reliance upon the order passed by the learned CIT(A) in question. On appraisal of the order dated 04.12.2009 passed by the Assessing Officer nowhere it came into notice that the Assessing Officer issued notice u/s.143(2) of the Act. The provision of u/s.292BB of the Act is applicable for the A.Y.2008-09 onwards. The said amendment is prospective in nature. In view of the law settled in CIT Vs. Mr. Salman Khan I.T. Appeal no. 2362 of 2009 dated 01.12.2009 (Bombay High Court) and Kuber Tobacco Products (P) Ltd. Vs. DCIT 18 DTR 1 (Delhi Special Bench), we are of the view that the proceedings initiated u/s.147 of the Act is wrong on account of non-following of the mandatory provision i.e. the issuance of notice u/s.143(2) of the Act therefore order dated 1.09.2010 in question is not liable to be sustainable in the eyes of law therefore the same is hereby order to be set aside Therefore, these issues are decided in favour of the assessee against the revenue.
Issue No.1 to 4 of quantum appeal:- A.Y. 2006-07
All the issues are factual in nature wherein the Assessing Officer has disallowed the purchase to the tune of Rs.32,23,819/- from M/s. Zalak Impex. There is no need to decide these issues because the assessment u/s.147 has already been adjudicated by holding that the assessment is wrong against law and facts, therefore decision on this issue would merely be of the nature of the academic, therefore, there is no need to decide the same.
Issue No.1 to 4 of penalty appeal:-