2022 (9) TMI 1243 - AT - Income Tax

Maintainability of appeal - Monetary limit - Penalty u/s 271(1)(c) - HELD THAT - We find that similar issue arose for consideration before the Co ordinate Bench of the Tribunal in appeal in DCIT v/s Aluvind Architectural Pvt. Ltd 2021 (4) TMI 1340 - ITAT MUMBAI wherein the Tribunal, while deciding the issue in favour of the tax payer. As tax effect on the amount disputed by the Revenue in the present appeal is below the revised monetary limit of Rs.50 lakh, as per CBDT Circular no. 17/2019, dated 08/08/2019, r/w CBDT Circular no.3/2018, dated 20/08/2018. In view of the aforesaid, Revenue s appeal deserves to be dismissed.

Summary

Issues:
Challenge to deletion of penalty under section 271(1)(c) of the Income Tax Act, 1961.

Detailed Analysis:

1. Background and Appeal: The Revenue filed an appeal challenging the deletion of penalty under section 271(1)(c) of the Income Tax Act for the assessment year 2009-10. The appeal arose from the order passed by the Assessing Officer and the subsequent order by the Commissioner of Income Tax (Appeals).

2. Grounds of Appeal: The Revenue raised grounds questioning the deletion of the penalty by the Commissioner of Income Tax (Appeals) and sought restoration of the Assessing Officer's decision.

3. Factual Overview: The assessee, a trading company in Pool equipments, filed its return of income for the relevant year. Reassessment proceedings were initiated based on information regarding bogus purchases. The Assessing Officer made an addition to the income, leading to the penalty under section 271(1)(c).

4. Appeals Process: The Commissioner of Income Tax (Appeals) upheld the assessee's appeal against the penalty order, emphasizing that it was a disallowance of expenditure and not concealment of income. This decision led to the Revenue's appeal before the Tribunal.

5. Legal Arguments: During the hearing, the Authorized Representative argued that the tax effect in the Revenue's appeal fell below the revised monetary limit for appeals before the Tribunal. The Departmental Representative contended that the case fell within an exception allowing the appeal.

6. Precedent and Decision: The Tribunal referred to a similar case where it was held that the monetary limit for appeals applied to quantum assessment proceedings and not penalty proceedings. Considering the tax effect and the applicable circulars, the Tribunal dismissed the Revenue's appeal.

7. Final Decision: The Tribunal, following the precedent and the monetary limit criteria, dismissed the Revenue's appeal against the deletion of the penalty under section 271(1)(c) of the Income Tax Act for the assessment year 2009-10.

This detailed analysis covers the background, grounds of appeal, factual overview, appeals process, legal arguments, precedent, and the final decision of the Appellate Tribunal ITAT Mumbai in the case involving the challenge to the deletion of the penalty under section 271(1)(c) of the Income Tax Act, 1961.