9911796707
TMI Blog2025 (2) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... rs by the Deputy Commissioner of Income Tax, Central Circle - 2(1), Mumbai, dated 31.05.2023 for Assessment Years 2015-16 and 2016-17, u/s. 271(1)(c) of the Income-tax Act (hereinafter referred to as the "Act") and for 2017- 18, u/s. 271AAB of the Act. 2. This set of three appeals by the assessee is on a common issue of levy of penalty on the issues which in the quantum proceedings have been decided by the Coordinate Bench of ITAT Bench in assessee's own case, granting partial relief by adopting certain percentages on an estimate basis. For appeal in ITA No.6004/Mum/2024 for Assessment Year 2017-18, the penalty levied is u/s. 271AAB and for the other two years u/s. 271(1)(c). Since identical issue is involved in all the three appeals, we t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led its return of income u/s 153C for A.Y. 2015-16 on 04.10.2018 declaring total income at Rs. 4,10,19,620/-. An order u/s 143(3) r.w.s. 153C of the Act was passed on 27.12.2018, assessing the total income at Rs. 6,37,94,600/-, after making addition of Rs. 1,83,380/- on account of cash expenses Rs. 58,59,297/- on account of bogus purchases expenditure u/s. 69C and Rs. 1,67,32,303/- on account of bogus labour payment u/s. 69C of the Act. Penalty proceedings u/s 271(1)(c) were initiated for furnishing inaccurate particulars of income and a notice u/s. 271(1)(c) of the Act dated 27.12.2018 was issued and served on the assessee to file explanation for the same within seven days. Assessee filed a letter on 16.01.2019 requesting to keep penalty p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Bogus Labour Contract Payment (Rs.1,67,32,303/-) (i) Payments made to 9 parties which could not be verified. 1,26,36,860 63,18,430 (Reduced to 50% from 100%) 6,31,843 (5% of disallowance confirmed) 6,31,843 (ii) Other expenses claimed for payments of labour contract (3% of total payments) 40,95,443 40,95,443 (Confirmed the addition made by the AO) Nil [Total addition amount deleted by ITAT) NIL Total addition confirmed by the Hon'ble ITAT 7,09,350 5. Despite the above tabulated findings of Coordinate Bench, allowing partial relief to the assessee, which is reproduced by ld. Assessing Officer in para -6 of the impugned order while imposing penalty, he noted in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er res integra and it is a settled law that in the said factual position, penalty is not imposable on additions sustained on estimate basis. It is an accepted fact that whenever an addition is made on the basis of estimate, penalty u/s. 271(1)C is not leviable. There is no scope to levy penalty under the said section. Accordingly, in the given set of facts, the penalty levied u/s. 271(1)C is deleted. Ground raised by the assessee is allowed. 6. In the result, appeal of the assessee is allowed. 7. For the other two appeals, for Assessment Year 2016-17 and 2017-18, there being identical fact pattern, except that for Assessment Year 2017-18, the penalty is imposed u/s. 271AAB, our observations and findings in ITA No.6002/Mum/2024 applies mut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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