9911796707
TMI Blog2025 (5) TMI 516X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [in short "CIT(A)"], for Assessment Years (AYs) 2010-11 to 2012-13 and 2007-08 respectively. Since facts of the cases and the grounds taken up in the appeals are similar except variation in the amounts, these appeals were heard together and a common order is passed for the sake of convenience and brevity. ITA No. 107/SRT/2025 is taken as the lead case. 2. The grounds of appeal raised by the revenue as per in ITA No. 107/SRT/2025 (AY.2010-11), are as follows: "a) On the facts and circumstances of the case and law, the Id.CIT(A) has erred in deleting the penalty levied by the A.O. u/s 271(1)(c) of the I.T. Act, 1961 of Rs. 24,019/- without appreciating the fact that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer be restored. g) The appellant craves leave to add, alter, amend and/or withdraw any grounds of appeal either before or during the course of hearing of the appeal." 3. The grounds of appeal raised by the revenue in ITA No. 115/SRT/2025 (AY.2007-08), are as follows: "a) On the facts and circumstances of the case and law, the ld.CIT(A) has erred in deleting the penalty levied by the A.O. u/s 271(1)(c) of the I.T. Act, 1961 of Rs. 2,77,371/- without appreciating the fact that the assessee claimed bogus purchases in its Return of Income in order to suppress taxable income thereby making himself liable for Penalty uls 271(1)(c) of the Income-tax Act, 1961. b) Whether on the facts and circumstances of the case and law, the Id. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07-08), are as follows: "a. There being no concealment of income / furnishing of inaccurate particulars, no proper investigation and higher satisfaction of proof for initiation of penalty, also notice not being clear on applicable limb, penalty deletion be upheld. b. Appellant's plea that deletion of penalty is not in accordance with decision of Hon'ble jurisdictional high court in cases of CIT Vs. Subhash Trading Co. (1996) 86Taxman30 (Guj.) and CIT Vs. S.P. Bhatt (1974) 97 ITR 440 (Guj.) is incorrect. In fact both the above cases are in favour of assessee whereby penalty has been deleted. Here appellant reference to decision of Hon'ble jurisdictional high court is against its plea. c. Hon'ble ITAT has reduced the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the ITAT was pending for disposal. The AO did not accept such request and proceeded to levy the penalty because the CIT(A) had dismissed appeal of the assessee. He levied minimum penalty of Rs. 24,019/- u/s 271(1)(c) of the Act, being 100% of tax sought to be evaded. 6. Aggrieved by the order of AO, the assessee filed appeal before CIT(A) where appellant raised three grounds including validity of the notice issued u/s 274 r.w.s. 271(1)(c) of the Act and merit of the penalty imposed by the AO. The CIT(A) has passed order u/s 250 of the Act for AY.2010-11 in which he had noted that the ITAT passed an order on 09.11.2021 involving AYs.2009-10 to 2012-13 by restricting the estimated addition at 6% of bogus purchases made in each ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition u/s 69C of the Act was Rs. 1,16,996/- on total purchase of Rs. 4,67,995/- from the said group. In appeal, the CIT(A) upheld the said disallowance. The appellant filed appeal before ITAT, Surat Bench, which restricted the addition to 6% of bogus purchases as against 25% made by the AO and CIT(A). The ld. AR of the assessee submitted that the addition in quantum assessment as well as appellate proceedings before the ITAT were made/upheld on estimation basis. He submitted that it is now fairly well settled that in Income-tax proceedings, no penalty is leviable on addition made on estimated addition. Therefore, the penalty levied by the AO is liable to be deleted. The ld. AR further submitted that the decisions relied upon by the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2024 and DCIT vs. M/s Opulent Jewels Pvt. Ltd., in ITA No. 1855/AHD/2010/SRT, dated 15.11.2018, have also held that no penalty is leviable on estimated addition. The ITAT, Mumbai in case of Mun Gems vs. ACIT, 155 taxmann.com 1, has held that where AO treated entire purchase as bogus based on findings of Investigation Wing and levied penalty u/s 271(1)(c), since payment of purchase had been made through account payee cheques and there was corresponding sales, ad hoc GP rate applied on alleged bogus purchases to factor in suppression of alleged gross profit could not be basis of levying penalty for furnishing of inaccurate particulars of income or concealing particulars of income. Since the facts are similar, following the above decisions, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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