High Voit Electicals Pvt Ltd Vs ITO (ITAT Mumbai)
Summary: The Mumbai Bench of the Income Tax Appellate Tribunal allowed all four appeals filed by High Voit Electicals P Ltd for Assessment Year 2013-14, deleting penalties imposed under sections 271(1)(b), 271(1)(c), 271B and 271F of the Income-tax Act, 1961. The appeals arose from separate orders of the NFAC dated 20.06.2025.
The dispute arose principally from the Department having originally allotted PAN AABFH1723L to the assessee with the status of a partnership firm, although the assessee was a private limited company. Since the assessee could not file its return using the PAN carrying the incorrect status, it obtained another PAN, AABCH7678H, under the correct status of a company and filed its return for AY 2013-14 under that PAN. The assessee had also stated that an application for cancellation of the earlier PAN had been made earlier.
In the first appeal, penalty of ₹20,000 was imposed under section 271(1)(b) for two alleged failures to comply with notices issued under section 142(1) during reassessment proceedings under sections 147/148. The assessee relied, among other things, on the pending quantum appeal and the existence of the two PANs. The Tribunal noted that the coordinate Bench had subsequently deleted the additions in the assessee’s own quantum proceedings in ITA No. 4461/Mum/2025 dated 14.08.2025 after examining Form 26AS, ledger accounts, audited financial statements and other documentary evidence. The coordinate Bench had found that the contract receipts and service charges appearing against the old PAN had already been accounted for and offered to tax under the correct PAN, and that separate addition would result in double taxation. The credit-card expenditure addition was also deleted. The Tribunal therefore held that the factual basis for drawing an adverse inference against the assessee no longer survived. It further observed that penalty under section 271(1)(b) is not automatic and reasonable cause must be considered in the surrounding circumstances. ([TaxGuru][1])
