Income Tax Appellate Tribunal - Chandigarh
M/S Taksus Steels Pvt. Ltd., Mandi ... vs Acit, Patiala on 4 December, 2017
1
IN THE INCOME TAX APPELLATE TRIBUNAL
CHANDIGARH BENCHES 'B', CHANDIGARH
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER &
Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER
ITA No. 967/Chd/2016
Assessment Year: 2008-09
M/s Taksus Steels Pvt. Ltd., Vs. The ACIT, Central Circle,
Grain Market, Patiala
Mandi Gobindgrh
PAN No. AAACT6876G
(Appellant) (Respondent)
Appellant By : S/Sh. Ashwani Kumar, Aditya Kumar
Respondent By : Smt. Meenakshi Vohra
Date of hearing : 06.09.2017
Date of Pronouncement : 04.12.2017
ORDER
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals), [hereinafter referred to as CIT(A)]-5, Ludhiana dated 20.06.2016, agitating the levy of penalty u/s 271(1)(c) of the Act.
2. Brief facts of the case are that in the quantum proceedings, the Assessing officer made an addition of Rs. 13,22,011/- into the returned income of the assessee on account of CENVAT credit disallowance and 2 further addition of Rs. 31,56,401/- was made on account of enhancement of GP rate on estimation basis. The basis for the enhancement of the GP rate by the Assessing officer was because the Assessing officer doubted certain purchases made by the assessee from one M/s Rohit Ispat (India), Mandi Gobindgarh. In first appeal, the CIT(A) deleted the addition on account of the CENVAT but retained the addition on account of low GP rate. The Assessing officer, therefore, levied penalty of Rs. 9,75,216/- @ 100% of tax sought to be evaded in relation to the aforesaid confirmation of addition of Rs. 31,56,401/-.
3. The assessee in the quantum proceedings carried over the matter to the Tribunal. The Tribunal further restricted the disallowance made on account of enhanced rate to Rs. 4 lakhs as against the addition of Rs. 31,56,401/- made by the Assessing officer. The Ld. CIT(A), therefore, restricted the penalty @ 100% on the aforesaid addition of Rs. 4 lacs confirmed by the Tribunal. Being aggrieved by the above conformation of the penalty, the assessee has come in appeal before us.
4. Admittedly, in the assessment proceedings, the addition has been made by the Assessing officer only on estimation basis. The Assessing officer doubted the purchases made by the assessee from one party and presumed that the assessee might have purchased the material at some lower price from the grey market. The addition in this case has been made on preponderance of probabilities and not on the basis of an adverse evidence found against the assessee. It is a settled law that penalty proceedings are different from assessment proceedings. For the levy of penalty, it has to be established on the file that assessee has furnished inaccurate particulars of income or has concealed his income. In ever y 3 case, penalty cannot be levied merely because some additions have been made into the income of the assessee. In view of the above discussion, we do not find it a fit case for levy of penalty u/s 271(1)(c) of the Act and the same is accordingly ordered to be deleted.
5. In the result, the appeal of the assessee is hereby allowed.
Order pronounced in the Open Court on 04.12.2017 Sd/- Sd/-
(ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 04.12.2017 Rkk Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR