Trig Detectives Private Limited Vs DCIT (ITAT Mumbai)
Search u/s 132 was conducted on 18.07.2019 & assessments were framed u/s 153A with multiple disallowances of salary & wages, administrative expenses, 40(a)(ia), excess depreciation & interest. Assessee accepted quantum but contested penalties. Penalties u/s 271(1)(c) (AYs 2014-15 to 2016-17), 270A (AYs 2017-18 to 2019-20) & 271AAB (AY 2020-21) were upheld partly by CIT(A).
Before Tribunal, Assessee argued all additions were mere disallowances with no seized material linking them to search, hence Explanation 5A to 271(1)(c), conditions of 270A & tests of “undisclosed income” u/s 271AAB were not satisfied. Tribunal relied heavily on its own coordinate bench ruling in Swaran Nadhan Salaria vs DCIT, holding that penalties under these sections apply only when incriminating assets or falsity detected in search is established. Here, no seized material existed & disallowances were purely for lack of vouchers or suo-moto corrections in 153A returns. Therefore, estimated or post-search declared amounts cannot attract penalty. Tribunal deleted all penalties across all seven years. Appeals allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This batch of appeals has been filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals)–47, Mumbai [hereinafter referred to as “Ld. CIT(A)”], passed under section 250 of the Income-tax Act, 1961 (“the Act”), pertaining to Assessment Years 2014–15 to 2020–21. All these appeals arise from the respective penalty orders passed by the Ld. DCIT, Central Circle–1(2), Mumbai. The penalty orders under section 271(1)(c) of the Act for Assessment Years 2014–15 to 2016–17 were passed on 10/02/2023; the penalty orders under section 270A of the Act for Assessment Years 2017–18 to 2019–20 were also passed on 10/02/2023; and the penalty order for Assessment Year 2020–21 was passed under section 271AAB of the Act on 27/02/2023.
