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TMI Blog2024 (5) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty u/s 271(1)(c) of the Act could not have been levied. Thus as relying on Krishi Tyre Retreading and Rubber Industries [ 2014 (2) TMI 21 - RAJASTHAN HIGH COURT] the appellate orders of the ld. CIT (A) deleting the penalty u/s 271 (1) (c) of The Act , are confirmed. - Decided in favour of assessee. - Shri Prashant Maharishi, AM And Shri Sunil Kumar Singh, JM For the Assessee : None For the Revenue : Shri Rajesh Meshram, DR ORDER PER PRASHANT MAHARISHI, AM: 01. ITA No.4459/Mum/2023, is filed by the learned Assessing Officer against the order passed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] dated 11th October, 2023, wherein the penalty levied under Section 271(1)(c) of the Act by penalty order dated 28th March, 2018, passed by the Income Tax Officer, Ward 19(2)(3), Mumbai, levying the penalty of ₹ 2,38,595/- was allowed, penalty was deleted following the order of the co-ordinate Bench in case of Poonam K Prajapati holding that when the addition is made on account of bogus purchases on adhoc estimated basis the penalty cannot survive. Therefore, the learned Assessing Officer is aggrieved with the same and is in appeal before us. 02. Following g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 133(6) of the Act, which were returned back by postal authorities with remarks not known‟. Assessee was asked to establish the genuineness of the purchases along with the supporting evidences and to produce the parties. The assessee could not produce these parties but also failed to furnish any new address. However, he produced the ledger account of the parties, copies of purchase bills, bank statement and therefore, it submitted that the available information is furnished. The learned Assessing Officer issued a show cause notice for rejection of the books of account. The assessee submitted that all available information with him is furnished. The learned Assessing Officer rejected the contention of the assessee and thereafter after considering the several judicial precedents, rejected the books of account of the assessee by invoking the provisions of Section 145(3) of the Act and made a 100% addition of ₹ 61,77,214/- of purchases from hawala parties. The total income of the assessee was assessed at ₹ 68,80,373/- by passing an assessment order under Section 143(3) read with section 147 of the Act on 18th Mach, 2015. 04. The learned Assessing Officer also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... non genuine and assessee is the beneficiary of that. It is further contested that the assessee has failed to return correct income because of this hawala entries and therefore, the decision of the Hon'ble Supreme Court in case of K P Madhusudan V CIT 295 ITR 99 and the decision of Hon'ble Supreme Court in case of NK Proteins. 09. Despite notice to the assessee none appeared before us and the notices sent to the address of the assessee returned back by the postal department stating 'not known'. Therefore, the issue is decided on the merits of the case, as per information available on record. 010. We have carefully considered the contention raised by the learned DR and we find that the addition is made by the learned Assessing Officer to the extent of 100% of the alleged bogus purchases. This alleged bogus purchase are alleged on the basis of information received from Maharashtra Sales Tax Department by DGIT investigation Mumbai which was in turn forwarded to the ld AO wherein five parties were found to be hawala parties providing accommodation bills. When the assessee was questioned, the assessee submitted the copies of the invoices, ledger account of the parties an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as purchased. Assessee confessed that as sufficient cash balance was not available on that date, it obtained hand loans from the friends which were to be repaid within short time and therefore, no entries were made in the books of account. In that circumstances, the learned Assessing Officer was justified in levying the penalty. Thus, there was a failure on the part of the assessee to return his correct income was due to fraud. In the present case before us neither there is such allegation nor such finding. The learned CIT (A) has deleted the penalty by following the decision of the co-ordinate Bench on identical facts and circumstances that there is no failure on part of the assessee in submitting whatever details it had to the learned Assessing Officer, therefore, we do not find any reason to sustain the penalty levied of ₹ 238,595/- under Section 271(1)(c) of the Act. 011. Honourable Gujarat High court in RAMESHCHANDRA A SHAH VERSUS ASSTT. CIT, CIRCLE 3 OR HIS SUCCESSOR TAX APPEAL NO. 800 of 2008 dated August 10, 2016, on the question of law Whether on the facts and circumstances of the case, the Income-tax Appellate Tribunal, was right in law in confirming the penalty und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed income up to the date of payment. Clause (2) did not prescribe the time limit within which the assessee should pay tax on income disclosed in the statement u/s. 132(4) and thus, the assessee was entitled to immunity under clause (2) of Explanation 5 to section 271(1)(c). Learned Counsel for the appellant has also placed reliance on the decision of this Court in the case of Vijay Proteins Ltd. v. Commissioner of Income-tax in Income Tax Reference No.139/1996 with Tax Appeal No.243/2002 wherein the question of law was answered in favour of the assessee and against the Revenue and consequently, the penalty imposed was quashed and set aside. It is submitted in the facts of the present case, the order of penalty also imposed upon the assessee may be dismissed. 5. On the other hand, learned Counsel for the respondent Department has submitted that in view of the bogus purchases, the order of penalty may be confirmed. 6. We have heard learned Counsel for the respective parties and perused the records of the case. Taking into consideration the order the Tribunal, the evidence which has surfaced on record as well as the decision of this Court in the case of Vijay Proteins Ltd. v. Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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