DCIT Vs Relcon Infraprojects Limited (ITAT Mumbai)
Penalty not leviable on estimated bogus-purchase disallowance – Revenue appeals dismissed
The Mumbai ITAT dismissed all seven appeals filed by the Revenue for AYs 2014-15 to 2020-21, upholding deletion of penalties levied under sections 271(1)(c) (for AYs 2014-15 to 2016-17) and 270A (for AYs 2017-18 to 2020-21).
In the quantum proceedings arising from a search u/s 132, additions for alleged bogus purchases were ultimately restricted to 2% on an estimated basis, due to lack of evidence quantifying the extent of inflation. Relying on settled law, the Tribunal held that penalty cannot be levied where additions are made purely on estimation, as such cases do not establish concealment or furnishing of inaccurate particulars.
For later years where penalty was invoked u/s 270A for alleged “misreporting,” the Tribunal found that the assessee had furnished supporting purchase documents and that the disallowance stemmed from presumptions drawn from a director’s statement relating to another year. Hence, the case did not fall within misreporting under section 270A(9). The Tribunal also rejected the Revenue’s arguments across all years by following consistent coordinate-bench precedents.
Accordingly, the CIT(A)’s orders deleting penalties were affirmed, and all Revenue appeals were dismissed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
