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TMI Blog2025 (2) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... der, for all the additions made by the ld. AO have been either reduced to a lower percentage from the percentage at which the addition was made or have been deleted in toto. As in the case of addition for cash expenses on account of "site expenses", AO made the addition by applying 50% of the expenses which was reduced by CIT(A) to 35% and was subsequently reduced to 20% by the Coordinate Bench. Similar is the case for other expenses and payments for which additions have been made. Even the first appellate authority, despite taking record of partial relief to the assessee in terms of the findings as stated above has observed that there appears to be a malafide intention of the assessee and "mens rea" is present in the case. He concluded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8, 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 take up appeal for Assessment Year 2015-16 for drawing the facts and give our findings thereon which will apply mutatis mutandis on the other two appeals also. 3. Assessee filed its return of income on 29.09.2015 reporting tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 proceedings in abeyance for the reason that assessee had filed an appeal before the Ld. CIT(A) which was pending for disposal. 3.2. Ld. CIT(A) passed a combined order for A.Y. 2015-16 & 2016-17 and granted part relief to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 - 8 that, submissions made by the assessee are found to be not acceptable. Such an irresponsible noting by ld. Assessing Officer despite having findings of the Coordinate Bench on the quantum additions on record, reflects abs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty 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 mutatis mutandis to ITA No.6003/Mum/2024 and 6004/Mum/2024. Both, ld. Assessing Officer and ld. CIT(A) have made identical observations and arrived at adverse conclusions despite partial relief granted by Coordinate Bench on quan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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