J&K&L High Court: Maternity Leave is a Constitutional Right and Cannot be Treated as State Charity  ||  P&H High Court: Second Anticipatory Bail Plea is Not Maintainable After Supreme Court Rejection  ||  Bombay High Court: No Prior Sanction is Required to Prosecute Police For Custodial Assault  ||  Allahabad High Court: Strict Proof of Marriage is Unnecessary if Couple Lived as Husband and Wife  ||  Delhi High Court: UP Passport Disputes Cannot be Filed in Delhi Only Because MEA is Based There  ||  Bombay High Court: Revenue Officers Cannot Decide Caste Status to Remove Tribal Land Protections  ||  Calcutta High Court: Punjab National Bank Liable to Compensate Farmers For Crop Insurance Lapse  ||  Calcutta High Court: Joint Settlement of Liquor Licence is Allowed if All Eligible Heirs Consent  ||  Delhi High Court Holds Multiple Sclerosis is a Specified Disability under the RPWD Act  ||  Allahabad High Court: An Alibi Must be Proved at Trial and Cannot be Accepted by the IO Alone    

Assistant Commissioner of Income Tax, Mumbai vs. Me N Moms Retails Pvt Ltd. - (Income Tax Appellate Tribunal) (02 Sep 2021)

Quantum proceedings and penalty proceedings are independent and so, distinct proceedings and confirmation of an addition cannot, on a standalone basis, justify upholding of a penalty

MANU/IU/0570/2021

Direct Taxation

By present miscellaneous application, the applicant revenue seeks to recall order passed, wherein the revenue's appeal was summarily dismissed on account of low tax effect. It is the claim of the revenue that though the 'tax effect' involved in the appeal in question was admittedly below the threshold monetary limit of Rs. 50 lac specified in the CBDT Circular No. 17/2019, dated 8th August, 2019, however, the same being covered by the exception carved out in Para 10(e) of the CBDT Circular No. 3/2018, dated 11th July, 2018 was thus, maintainable.

It is the claim of the assessing officer, that as the issue involved in the appeal in question pertains to a penalty that was imposed under Section 271(1)(c) of the Income Tax Act, 1961 (IT Act) in respect of addition of bogus purchases that was made on the basis of information received from the Sales Tax Authorities i.e an external agency, therefore, pursuant to the exception carved out in Para 10 of the CBDT Circular No. 3/2018, dated 11th July, 2018 the appeal was maintainable, and had wrongly been summarily dismissed on the ground of low tax effect therein involved .

It is a settled position of law that, quantum proceedings and penalty proceedings are independent and distinct proceedings and confirmation of an addition cannot on a standalone basis justify imposition/upholding of a penalty under Section 271(1)(c) of the IT Act. Adopting the same logic, present Tribunal is of the considered view that unless a specific exception is provided in the circular w.r.t penalty also, it could by no means be construed that penalty was to be treated at par with the quantum addition.

As is discernible from Para 10(e) of the CBDT Circular No. 3/2018 (as amended on 20th August, 2018), the same applies only to additions which were based on information received from external sources. Since the levy of penalty by no means could be construed as an addition within the meaning of Para 10(e) of the circular, therefore, there is no merit in the claim raised by the revenue that the aforementioned exception carved out in the CBDT Circular No. 3/2018 would also take within its sweep penalty imposed by the A.O under Section 271(1)(c) of the Act in respect of an addition of bogus purchases on the basis Assessment year: 2010-11 of an information received from Sales Tax Authorities i.e an external agency. The miscellaneous application filed by the revenue is dismissed.

Tags : ASSESSMENT   PENALTY   UPHOLDING OF  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved