IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER)

AND SHRI ANIKESH BANERJEE (JUDICIAL MEMBER)

Assessment Year: 2007-08 &

ITA No. 870/MUM/2025 Assessment Year: 2012-13 Income Tax Officer- 23(3)(1), Tisya Jewels Mumbai G-2 Sagar Fortune, 184

525A, 5^th Floor, Piramal Chambers, Vs. Waterfield road, Bandra West, Parel, Mumbai-400012 Mumbai- 400050 PAN NO. AADFT 8056 G Appellant Respondent Assessee by : Mr. Nishit Gandhi a/w Ms. Aadnya Bhandari Revenue by : Mr. Hemanshu Joshi, CIT-DR Date of Hearing : 18/06/2025 Date of pronouncement : 27/06/2025

ORDER

PER OM PRAKASH KANT, AM These appeals filed by the Revenue is directed against two separate orders, both dated 12.12.2024, passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’], in relation to penalty levied u/s 271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’), for assessment years 2007-08 and 2012-13 respectively. In these appeals, identical grounds have been raised challenging deletion of the penalty levied by the Assessing officer, therefore for the brevity, we are reproducing only the grounds raised in 2007-08 as under:

“1. Whether on the facts and circumstances of the case and in low, Id. CIT(A) has erred in deleting the penalty levied of Rs. 21,005/ of the Act, by ignoring the fact that the Maharashtra Sales Tax Department thru DGIT(Investigation Wing), Mumbai has proved beyond doubt that M/s. Prime Star, M/& Mohit Enterprises & M/s. Mayur Exports, all were paper companies, controlled and operated by Mr. Bhavarlal Jain, a hawala trader, who were involved in providing accommodation entries of bogus purchases and the assessee firm has availed accommodation entries of bogus purchases of Rs. 5,06,530/- from three hawala traders and deliberately furnished inaccurate particulars of income for the A.Y. 2007-08?"

“2. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the penalty levied of Rs. 21,005/-of the Act, by ignoring the provisions of the Section 2988 of the Act, which is relevant this case which defines that, no return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid ar shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act ?"

“3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the penalty levied of Rs. 21,005/-u/s 271(1)(c) of the Act, without considering the fact that AO has clearly stated his reason for levying the Penalty 12% which is on reduced profit percentage to 12.32% of unproven bogus purchases of Rs. 5,06,530/-, and this view was confirmed by Hon'ble ITAT in the case of CIT Vs. Simit P Seth in ITA No. 3345/Mum/2017, while restricting only GP %?"

“4. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred night in deleting the penalty levied of Rs. 21,005/- u/s 271(1)(c) of the Act, bij ignoring the fact that there was a conscious concealment of particulars of income and a deliberate failure to furnish accurate particulars of the income and relevant evidences by the assessee, even at the penalty proceedings, which attracts the provision of section 271(1)(c) and explanation thereto, as held in the case of K.P. Madhusudhan Vs. CIT reported in 251 ITR 99 (SC) ?"

5. "Whether on the facts and circumstances of the case and in law, Ld. CIT(A) has erred in deleting the penalty levied of Rs. 21,005/ u/s 271(1)(c) of the Act, by ignoring the observations of Hon'ble High Court in the CIT Vs