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TMI Blog2021 (7) TMI 1194X X X X Extracts X X X X X X X X Extracts X X X X ..... e. - ITA no.5466/Mum./2019 - - - Dated:- 27-7-2021 - Shri Saktijit Dey, Judicial Member, And Shri S. Rifaur Rahman, Accountant Member For the Revenue : Shri T.S. Khalsa For the Assessee : None ORDER PER S. RIFAUR RAHMAN, A.M. The captioned appeal has been filed by the Revenue challenging the impugned order dated 31st May 2019, passed by the learned CIT(A) 16, Mumbai, deleting the penalty of ₹ 9,93,809, imposed under section 271(1)(c) of the Income Tax Act, 1961 (for short the Act ) by the Assessing Officer which pertaining to the assessment year 202013 14. 2. When the appeal was called for hearing neither the assessee nor any of the authorized representatives was present on behalf of the respondent assessee to represent the case. There is no application for adjournment of hearing either. Consequently, we deem it fit and appropriate to proceed to dispose off the appeal ex parte qua the respondent assessee after hearing the learned Departmental Representative and on the basis of material available on record. 3. Facts in brief: The assessee filed its return of income for the year under consideration on 29th November 2013, declaring total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her concealment of income as all the documentary evidencing the genuineness of the transactions were submitted to the Ld. AO nor the appellant company has furnished inaccurate particulars of income as the appellant company has truly disclose the purchase transaction before the Revenue authorities. Considering these facts I tend to agree with the appellant's contention. 4.1.3 In support of my view, I would like to place reliance on decision of Hon'ble jurisdictional ITAT in the case of Dcit 24(2), Mumbai vs Unisynth Chemicals 5967/MUM/2014,held that:- From a perusal of the finding of the CIT(A) in the impugned order it is seen that the addition of ₹ 47,04,960/-, on the basis of which penalty under section 271 (1)(c) of the Act was levied by the Assessing Officer, was on account of undisclosed income on account of bogus purchases and sales. On an appreciation of the material on record we are inclined to concur with the view of the CIT(A) that the explanation put-forth by the appellant in the penalty proceedings was a plausible one, inasmuch as, the circumstances on which the additional income was offered was because the disputed parties with whom these transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- A glance at the provisions of section 271(1)(c) of the I.T. Act, 1961 suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the appellant. Secondly, the appellant must have furnished inaccurate particulars of his income. The meaning of the word particulars used in section 271(1)(c) would embrace the detail of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the appellant cannot be held guilty of furnishing inaccurate particulars. In order to expose the appellant to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the appellant, because that is the only document where the appellant can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the return must not be accurate, not exact or correct, not according to the truth or erro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew that the ld.CIT(A) was not justified to confirm the penalty. Therefore, order of ld. CIT(A) was set aside. 6.1.7 The Hon'ble Jurisdictional ITAT in the case of Deepak Gogri, Mumbai vs ITO 25(3)(2) 1396/MUM/2017. In so far as the penalty levied on estimation of profit element on purchases is concerned, we are of the view that Assessing Officer had made only adhoc estimation of profit on certain purchases treated as unexplained expenditure. Assessing Officer did not doubt the sales made by the assessee from out of such purchases. Assessing Officer based on the decision of the Hon ble Gujarat High Court in the case of CIT v. Simit P. Seth (356 ITR 4511 estimated the profit element in such purchases at 12.5% and by reducing the Gross Profit already declared by the assessee. In the circumstances, we hold that there is no concealment of income or furnishing of inaccurate particulars as the profit element was determined by way of adhoc estimation. Coming to the interest, the assessee furnished complete details in the return of income and made a claim and simply because the claim is denied and cannot lead to furnishing of inaccurate particulars or concealment of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the Revenue. 6.1.11 In view of what has been discussed above, I am of the view that A.O. has erred in levying the penalty of ₹ 9,93,809 which is not sustainable in the eyes of law, hence ordered to be deleted. Consequently, the appeal filed by the appellant is hereby allowed. 5. Considered the submissions of the learned Departmental Authorities and perused the material on record. As it appears, the Assessing Officer imposed penalty under section 271(1)(c) of the Act on ad hoc basis without adducing any evidence on record for concealment of income. Penalty under section 271(1)(c) of the Act is liable to be imposed only where the assessee has concealed its particulars of income or furnished inaccurate particulars. Action of making addition on ad hoc basis does not result into imposition of penalty u/s 271(1)(c) of the Act and hence cannot be termed as either concealment or furnishing of inaccurate particulars of income. We find support from the series of decisions by different High Courts as well the decision of the Co ordinate Benches of the Tribunal, wherein it was held that when addition is made on estimate basis, penalty is not sustainable in the eyes of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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