ITA No. 3959/Mum/2024

Parties Involved

Facts Summary

The assessee, Kay Kay Synthetics, is a partnership firm engaged in the business of processing yarn products. The firm filed an income return for the assessment year 2011-12, disclosing a total income of Rs.4,52,360/-. Subsequently, the Assessing Officer (A.O) received information that the assessee had entered into bogus purchase transactions with parties providing accommodation bills. Based on this information, the A.O issued a notice under section 148 of the Income Tax Act, 1961. The assessee filed a letter to treat the earlier filed return as due compliance to the notice. The A.O issued further notices under sections 143(2) and 142(1) of the Act. The assessee submitted information and written submissions in response, but the A.O was not satisfied with the explanations. The A.O estimated the profit element on non-genuine purchases at 12.5%, amounting to Rs.11,33,097/-, and assessed the total income at Rs. 15,85,460/-. The A.O initiated penalty proceedings under section 271(1)(c) of the Act, levying a penalty of Rs. 1,40,050/-. The assessee appealed against the penalty order to the Commissioner of Income Tax (Appeals), who confirmed the penalty. The assessee further appealed to the Income Tax Appellate Tribunal (ITAT).…

Legal Issues

• 1. The learned C.I.T (Appeals), NFAC has erred in law and on facts and circumstances of the case in upholding levy of penalty of Rs. 1,40,050/- u/s. 271(1)(c) of Income Tax Act, 1961 for furnishing inaccurate particulars of income.
• 2. The Learned C.I.T (Appeals), NFAC has erred in law and on facts and circumstances of the case in not considering the action of the Assessing officer (A.O) in initiating penalty for furnishing inaccurate particulars of income.
• 3. The Learned C.I.T. (Appeals), NFAC has erred in law and on facts and circumstances of the case in upholding the passing of Penalty Order by the Assessing Officer (A.O), after the expiry of the time limit as prescribed u/s. 275 of the Act, thereby rendering order null and void.

Judgment Outcome

Decided in favour of Assessee.

Similar Judgements

• Shree Krishna Vanaspati Industries Pvt. Ltd. vs. Income Tax Officer, Ward-23(3), New Delhi

  Delhi Bench ‘G’ benchAY 2012-13Allowed

• C & S Electric Limited vs. National Faceless Assessment Centre

  Delhi Bench 'B', New Delhi benchAY 2015-16Allowed

• BMW Industries Limited Vs. DCIT, Central Circle 4(1)

  Kolkata benchAY 2012-13, 2015-16, 2016-17Allowed

• Ram Garhia Cooperative Bank Ltd. vs Assistant Commissioner of Income Tax, Central Circle-63(1), New Delhi

  Delhi Bench ‘F’, New Delhi benchAY 2014-15Allowed

• Sanjeev Kumar vs. Central Circle-14

  Delhi bench

• Sapra Iron Store vs. Income Tax Officer

  Delhi Bench 'C', Delhi benchAY 2012-13 & 2013-14Allowed