TaxTMI 
TaxTMI 
2020 (11) TMI 638
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....me Tax Act, 1961 (for short the 'Act'). 2. Brief facts of the case are that the assessee company engaged in the business of construction, repairs and engineering, filed its return of income for the assessment year under consideration declaring total income at Rs. 1,59,51,458/-. The return was processed u/s 143 (1) of the Act and the Assessment was completed u/s 143 (3) of the Act. Subsequently, on the basis of information received from the Sales Tax Deptt. Govt. of Maharashtra, that the assessee had obtained bogus purchase bills from 'hawala' dealers, AO reopened the assessment after issuing notice u/s 148 of the Act. Accordingly, the AO passed assessment order u/s 143 (3) r.w.s. 147 of the Act determining the total income of the assesse....
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.... of the Income Tax Act, 1961 ["the Act"]. 2.2 The Ld. CIT (A) failed to appreciate that the order passed by the A.O. and/or the penalty levied was bad and illegal as the necessary conditions for initiating the penalty proceedings and the completion thereof were not fulfilled. 2.3 It is submitted that in the facts and the circumstances of the case, and in law, no such penalty was leviable. Without further prejudice to the above 3.1 The Ld. CIT (A) erred in confirming the action of the A.O. in levying penalty of Rs. 18,98,380/- u/s 271 (1) (c) of the Act on the allegation of concealment of income/furnishing inaccurate particulars of income by the Appellant. 3.2 It is submitted that in the facts and....
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....culars of the income within the meaning of section 271 (1) (c) of the Act, the Ld. CIT(A) has wrongly confirmed the penalty levied by the AO. The counsel accordingly submitted that since the issue involved in the present appeal is covered in favour of the assessee by the aforesaid decisions of the Tribunal, the impugned order is liable to be set aside. 5. On the other hand, the Ld. departmental representative (DR) supported the order passed by the Ld. CIT(A) on the ground that since the ITAT has sustained the addition of 12.5% of total amount of bogus purchases, the Ld. CIT(A) has rightly upheld the penalty 6. We have heard the rival submissions of the parties and perused the material on record in the light of the rival contentions. A....
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....enalty levied u/s 271 (1) (c) of the Act." 7. Similarly, in the case of Sameer D. Punjabi and ETCO Telecom Ltd.,(supra), the coordinate Bench has categorically held that the addition made on estimation basis does not amount to concealment of income or furnishing of inaccurate particulars of income within the meaning of Section 271(1)(c) of the Act. The findings of the coordinate Bench in the case of Sameer D. Punjabi and ETCO Telecom Ltd. (supra) read as under :- "3. A perusal of the order of the authorities below reveal that purchases effected by the assessee from four parties totaling to Rs. 4,66,133/- were found to be doubtful in view of the information received regarding the four parties from the Maharashtra Sales Tax Depart....
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....at the sales effected by the assessee corresponding to the impugned purchases were accepted. Be that as it may, it is a case of mere non-substantiation of an expenditure and not a case where falsity has been proved to the hilt. Even if one has to go by the manner in which the addition has been made by the Assessing Officer by resorting to estimating the profit element no penalty is sustainable. Therefore, in this view of the matter, we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the penalty of Rs. 18,006/- imposed under section 271(1)(c) of the Act." 8. In the present case, the AO made addition of the total amount of bogus purchases. However, the Ld. CIT(A) restricted the addition to 12.5% of the question....