Ku. Nishita Singhal, Mhow Distt. Indore V. The ACIT 5(1), Indore

CO 12/Ind/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3610 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 04-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-03-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 25-08-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJAY MEHTA
• Keywords: Gift; Salary income
• Section: 132; 271(1)(c); 143(3); 142(1); 153A; 201; 274; 143(2); 153C

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE RAJPAL YADAV, VICE PRESIDENT AND SHRI MANISH BORAD, ACCOUNTANT MEMBER VIRTUAL HEARING ITA NO.935/IND/2019 ASSESSMENT YEAR: 2015-16 ACIT-5(1) INDORE : APPELLANT V/S KU. NISHITA SINGHAL MHOW : RESPONDENT PAN:FCKPS7475C CO NO.12/IND/2020 (ARISING OUT OF IT NO.935/IND/2019) ASSESSMENT YEAR: 2015-156 KU. NISHITA SINGHAL MHOW PAN: FCKPS7475C : APPELLANT V/S ACIT-5(1) INDORE : RESPONDENT REVENUE BY SHRI HARSHIT BARI, SR. DR RESPONDENT BY SHRI SANJAY MEHTA, AR DATE OF HEARING 05.08.2021 DATE OF PRONOUNCEMENT 04.10.2021 O R D E R NISHITA SINGHAL 2 PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE REVENUE & CROSS OBJECTION BY THE ASSESSEE FOR ASSE SSMENT YEAR 2015-16 ARE DIRECTED AGAINST THE ORDERS OF LD. COMM ISSIONER OF INCOME TAX(APPEALS) (IN SHORT LD. CIT]-II INDORE D ATED 09.08.2019 WHICH ARE ARISING OUT OF THE ORDER U/S 2 71AAB OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 28.05 .2018 FRAMED BY DCIT-5(1), INDORE. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN ITANO.935/IND/2019: WHETHER IN THE FACT AND CIRCUMSTANCES THE LD. CIT( A) ERRED IN DELETING THE PENALTY AMOUNT IMPOSED U/S 271AAB OF T HE IT ACT BY SAYING THAT THE SECTION U/S 271AAB IS NOT APPLICABL E IN THIS CASE WHERE AS THE INCOME OF WHICH REFERENCE THE SAID PEN ALTY AS LEVIED IS JUSTIFIED AS PER PENALTY ORDER. 2. WHETHER IN THE FACT AND CIRCUMSTANCES THE LD. CI T(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE WITHOUT CONSIDE RING THE FACTS THAT THE FATHER OF THE ASSESSEE DECLARED IN HIS STA TEMENT ON OATH THAT THE AMOUNT WAS PROVIDED AS A UNACCOUNTED CASH LOAN GIVEN BY THE ASSESSEE WHO CONSIDERED THE SAME AS UNDISCLO SED IN HER HAND AND FILED ITR FOR THE RELEVANT AY BY MENTIONIN G THE SAME INCOME ACCORDINGLY. 3. WHETHER IN THE FACTS AND CIRCUMSTANCES THE LD. C IT(A) ERRED IN RELYING THE CASE LAW OF I.T.A.T. BENCH IN THE CASE OF DCIT VS. VOLGA DRESSES ITANO.201 & 202/PAN/2016 WHEREAS THAT DOES NOT PERTAIN TO JURISDICTIONAL BY THE DEPT. AND FURT HER APPEAL WAS FILED BY THE REVENUE. 4. THE APPELLANT CRAVES LEAVE TO ADD TO OR DEDUCT F ROM OR OTHERWISE AMEND THE ABOVE GROUNDS OF APPEAL. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL IN CONO.12/IND/2020: NISHITA SINGHAL 3 1. THE LD. AO HAS GROSSLY ERRED UNDER THE FACTS AND CI RCUMSTANCES OF THE CASES IN LEVYING OF RS.65,00,000/- UNDER SEC TION 271AAB WITHOUT PROVING CONCEALMENT. 2. 2. THE LD. AO HAS ERRED IN HIS ORDER ON FACT BY SET TING THAT THE SURRENDERED INCOME WAS DECLARED IN RETURN FILED ON 21.04.2017 AFTER ISSUE OF NOTICE U/S 153C OF THE INCOME TAX AC T, 1961. 3. THE LD. AO HAS GROSSLY ERRED ON LAW IN INVOKING PRO VISION OF SECTION 271AAB IN A CASE ASSESSED U/S 143(3) R.W.S. 153C OF THE INCOME TAX 1961. 4. THE LD. AO HAS GROSSLY ERRED ON PROVISION OF SECTIO N 271AAB BY LEVYING MORE THAN 100% PENALTY WITHOUT SPECIFYING T HE SUBSECTION AND CLAUSE OF 271AAB WHICH WAS APPLIED F OR ARRIVING AT ABOVE RATE. 5. THE LD. AO HAS GROSSLY ERRED ON INVOKING OF SECTION 271AAB WITHOUT PROVING THE REQUIREMENT OF MAINTENANCE OF B OOKS OF ACCOUNTS. 6. SHOW CAUSE NOTICE OF U/S 274 R.W.S. 271AAB OF THE I NCOME TAX DATED.22.11.2017 IS DEFECTIVE AND NO PENALTY CAN BE LEVIED ON BASE OF A DEFECTIVE NOTICE 7. THE ORDER PASSED U/S 27AAB IS DEFECTIVE/ERRONEOUS N OT BASED ON THE FACTS AND LEGAL PROVISION IS LIABLE TO BE QU ASHED. 8. AO HAS REJECTED THE CITED CASE LAW OF VOLGA DRESSES , IN SUPPORT OF THE LEGAL PROVISION WITHOUT REBUTTING THE ERROR IN THE CASE, BUT SIMPLY STATING IT IS FROM A BENCH, OTHER THAN JURIS DICTIONAL I.T.A.T. BENCH, DESPITE OF THE FACT THAT THERE IS NO CONTRAD ICTORY CASE DECIDED IN JURISDICTIONAL COURTS. 9. THE RESPONDENT CRAVES LEAVE TO ADD TO OR DEDUCT FRO M OR OTHERWISE AMEND THE ABOVE GROUNDS OF CROSS OBJECTIO NS. FIRST WE TAKE UP REVENUES APPEAL IN ITANO.935/IND/ 2019 2. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THE ASSESSEE IS INDIVIDUAL EARNING INCOME FROM SALARY A ND OTHER SOURCES. A SEARCH U/S 132 OF THE ACT WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF MR. SHAILENDRA SINGHAL OF A GOH GROUP. IN THE STATEMENT DATED 31.08.2014 HE STATED THAT VARIO US GIFTS AMOUNTING TO RS. 2 CRORE WERE ACCEPTED BY HIS DAUGH TER KU. NISHITA SINGHAL DURING F.Y. 2014-15 AND THE SAID AM OUNT WAS NISHITA SINGHAL 4 GIVEN TO DIFFERENT BARROWERS BY SHRI SHAILENDRA SIN GHAL. HE ALSO ADMITTED THE AMOUNT OF RS.2 CRORE AS UNDISCLOSED IN COME IN THE HANDS OF HIS DAUGHTER. SUBSEQUENTLY, ASSESSEE E-FIL ED THE RETURN OF INCOME ON 31.08.2015, DECLARING INCOME OF RS.2,0 9,67,530/- WHICH INTER ALIA INCLUDED A SUM OF RS.2 CRORE SURRENDERED BY SHRI SHAILENDRA SINGHAL IN HIS STATEMENT GIVEN ON 31.08. 2014. PROCEEDINGS U/S 153C OF THE ACT WERE INITIATED FOLL OWED BY ISSUING OF NOTICES U/S 143(2) & 142(1) OF THE ACT. RETURNED INCOME WAS ACCEPTED AS ASSESSED INCOME VIDE ASSESSM ENT ORDER DATED 22.11.2017 FRAMED U/S 143(3) R.W.S. 153C OF T HE ACT. 3.SUBSEQUENTLY, PENALTY PROCEEDINGS U/S 271AAB OF T HE ACT WERE INITIATED BY ISSUANCE OF NOTICE U/S 274 OF THE ACT AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE PE NALTY OF RS.65,00,000/- WAS LEVIED. 4. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A) AND SUCCEEDED. 5. NOW REVENUE IS IN APPEAL BEFORE THIS TRIBUNAL. L D. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDER OF LD. AO AND ALSO SUBMITTED THAT THE SUR RENDER OF RS.2 CRORE WAS MADE BY THE ASSESSEES FATHER WHO WAS REA L OWNER OF THE UNDISCLOSED INCOME WHICH HE ROUTED AS GIFTS IN THE HANDS OF NISHITA SINGHAL 5 HIS DAUGHTER. SUPPORTING THE ORDER OF LD. AO HE REQ UESTED CONFIRM THE PENALTY LEVIED U/S 271AAB OF THE ACT. 6. PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUPPORTE D THE FINDING OF LD. CIT(A) AND ALSO SUBMITTED THAT THE NOTICE OF SEARCH WAS NOT ISSUED IN THE NAME OF ASSESSEE. NOTICE U/S 274 OF T HE ACT ISSUED TO ASSESSEE IS DEFECTIVE AS IT DOES NOT SPECIFY SPE CIFIC CHARGE AGAINST THE ASSESSEE. HE ALSO REFERRED TO THE WRITT EN SUBMISSIONS RUNNING FROM PAGES 1 TO 8 AND PAPER BOOK PAGES RUNN ING FROM 1 TO 67. 7. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. REVENUES SOLE GRIEVANCE IS THAT THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S 271AAB OF THE ACT AT RS.65 LAKHS. WE OBSERVE THAT THE ASSESSEES FATHER WAS SUBJECTED TO SEARCH U/S 132 OF THE ACT. IN THE STATEMENT RECO RDED U/S 132(4) ASSESSEES FATHER ADMITTED THAT VARIOUS GIFT S AMOUNTING TO RS.2 CRORE WERE ACCEPTED BY HIS DAUGHTER KU. NISHIT A SINGHAL I.E. THE ASSESSEE WHICH WAS UTILIZED FOR GIVING LOANS TO DIFFERENT BORROWERS ON INTEREST. THEREAFTER ASSESSEE WAS SERV ED WITH A NOTICE U/S 153C OF THE ACT. RETURN OF INCOME WAS FI LED ON 31.08.2015 AND INCOME FROM GIFTS OF RS.2 CRORE WAS OFFERED TO TAX. NISHITA SINGHAL 6 8. WE ALSO OBSERVE THAT LD. CIT(A) DECIDED IN FAVOU R OF THE ASSESSEE ON OBSERVING THAT THE PROVISIONS OF SECTIO N 271AAB OF THE ACT ARE APPLICABLE ON THE PERSON WHO IS SUBJECT ED TO SEARCH BUT SINCE THE ASSESSEE WAS NOT SUBJECTED TO SEARCH U/S 132 OF THE ACT, PENALTY CANNOT BE LEVIED U/S 271AAB OF THE ACT. THE FINDING OF LD. CIT(A) READS AS FOLLOWS:- GROUND NO.1 4.0 THIS GROUND OF APPEAL IS WITH REGARD TO IMPOSING PE NALTY OF RE. 65,00,000 U/S 271AAB OF THE IT ACT, 1961. I HAV E CAREFULLY GONE THROUGH THE PENALTY ORDER AS WELL AS SUBMISSIO N OF THE APPELLANT IN THIS REGARD. 4.1 THE BRIEF FACTS OF THE CASE ARE THAT THE APPELLANT HAD FILED HER RETURN OF INCOME ON 31.08.2015 DECLARING TOTAL INCO ME OF RS. 2,09,67,530 FOR THE A:Y. 2015-16. THE APPELLANT HAD DECLARED INCOME FROM SALARY OF RS. 1,05,000, INCOME FROM INT EREST AT RS. 9,30,730 AND AMOUNT OF INCOME SURRENDERED DURING SE ARCH PROCEEDINGS OF RS 2 CRORE BEING A SEARCH RELATED CASE. THE AO HAS ISS UED A NOTICE U/S 153C OF THE ACT. IN RESPONSE TO THE CAS E, THE APPELLANT HAS FILED HER RETURN WHEREIN SHE HAD DECLARED THE SAID SURRENDERS INCOME OF RS. 2 CRORE. THE ASSESSMENT PROCEEDING WAS COMPLETED U/S. 143(3) R.W.S. 153C OF THE ACT AND PENALTY U/S 271AAB WAS SEPARATE LY INITIATED ON UNDISCLOSED INCOME SO SURRENDERED BY T HE APPELLANT ON THE BASIS OF SEARCH CONDUCTED IN AGROH GROUP. 4.2 THE APPELLANT HAS TAKEN THE PLEA THAT THE SAID SECT ION DOES NOT ATTRACT IN THE APPELLANT'S CASE DUE TO FOLLOWIN G REASONS:- 01- THE SEARCH WAS CONDUCTED ON THE FATHER OF, THE ASSESSEE, NOT ON ASSESSE OTHERWISE ASSESSMENT OF ASSESSEE WOULD HAVE BEEN DONE U/S 153A ,. NOT 153C, SINCE NO ASSESSMENT IS DONE U/ S 153_ AND NAME OF ASSESSEE WAS NOT INCLUDED IN NOTICE U/S 132(4), IT IS EVIDENT THAT SEARCH WAS NOT CONDUCTED ON ASSESSEE. SECTION 271AAB STARTS WITH THE WORDS 'PE NALTY WHERE' SEARCH HAS BEEN INITIATED' WHEREAS NO SEARCH WAS INITIATED AGAINST THE ASSESSEE THEREFORE SECTION IS NOT APPLICABLE , ASSESSMENT WAS DONE ON ASSESSEE U/S 14 3(3) R.W.S, 153C WHICH ITSELF IS EVIDENCE OF SEARCH NOT BEING CONDUCTED ON. ASSESSEE. THEREFORE, SECTION 271AAB I S NOT APPLICABLE. NISHITA SINGHAL 7 02- STATEMENT U/S132(4) WHERE INCOME IS SURRENDERE D WAS GIVEN BY FATHER OF THE ASSESSEE AND NOT THE ASSESSE E HERSELF, THEREFORE, SUB-CLAUSE (I) OF SUB SECTION (1L( A) OF SECTION 271AAB ALSO IS NOT COMPLIED IN PRESENT CASE .. ' 03~ SECTION 271AAB IS APPLICABLE ONLY ON THE ASSESS MENTS CONDUCTED U/S 153A NOT ON CASES ASSESSED UJS153C. 4.3 IT WOULD BE PERTINENT TO REPRODUCE THE LANGUAG E OF SECTION 271AAB OF THE IT ACT, 1961:- '271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A' CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JULY, 2012 [BUT BEFORE THE DATE ON WHICH THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016 RECEIVES THE ASSENT OF THE PRESIDENT], THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITI ON TO TAX, IF ANY, PAYABLE BY HIM,- (A) A SUM COMPUTED AT THE RATE OF TEN PER CENT OF T HE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE- I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDE R SUB-SECTION (4) OF SECTION 132 , ADMITS 'THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER III WHICH' SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN. WHICH THE UNDISCL OSED INCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE- (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIE D PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT O F THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE- (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132, DOES NOT ADMIT THE UNDISCLOSED INCOME; AND (II) ON OR BEFORE THE SPECIFIED DATE- (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME FU RNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT 'OF THE UNDISCLOSED INCOME; (C) A SUM 43[COMPUTED AT THE RATE OF SIXTY PER CENT } OFTHE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS RIOT COVERED BY THE PROVISIONS OF CLAUSES (A) AND (B). 44 [(1 A) THE ASSESSING OFFICER MAY, NOTWITHSTANDING A NYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN . INITIATED UNDER SECTION 132 ON OR AFTER THE DATE ON WHICH THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016 RECEIVES THE ASSENT OF THE PRESIDENT, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM,- (A) A SUM COMPUTED AT THE RATE OF THIRTY PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF THE ASSES SEE- (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER S UB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MAN NER IN NISHITA SINGHAL 8 WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE- (IV) (A) PRAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME AND B FURNISHED THE RETURN OF INCOME FOR THE SPECIFIES PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN. (B) A SUM COMPUTED AT THE RATE OF SIXTY PER CENT O F THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED UNDER THE PROVISIONS OF CLAUSE (A).) (2) NO PENALTY UNDER THE PROVISIONS OF 45[SECTION 2 70A OR} CLAUSE (C) OF SUBSECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SU B-SECTION (1) 45A!OR SUB-SECTION (1 A}}. (3) THE PROVISION OF SECTIONS 274 AND 275 SHALL, AS FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN T HIS SECTION .. EXPLANATION.-FOR THE PURPOSES OF THIS SECTION,- (A) 'SPECIFIED DATE' MEANS THE DUE DATE OF FURNISHI NG OF RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION ]39 OR THE DATE ON WHICH THE PERIOD SPECIFIED IN THE NOTICE ISSUED UNDER SECTION 153A F OR FURNISHING OF RETURN OF INCOME EXPIRES, AS THE CASE MAY BE; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS YE AR- (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139JOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE A SSESSEE HAS NOT FURNISHED THE RETURN. OF INCOME FOR THE PREVIOUS YE AR BEFORE THE DATE OF SEARCH; OR (II) IN WHICH SEARCH WAS CONDUCTED; (C) 'UNDISCLOSE D INCOME' MEANS- (I) ANY INCOME OF THE. SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHE R VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS- (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO. SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE PRINCIPAL C HIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COM MISSIONER .. BEFORE THE DATE OF SEARCH; OR (IT) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RE CORDED 'IN THE .BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NOR MAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE' AN. BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED.' 4.4 THE LANGUAGE OF THE SAID SECTION STARTS FROM THE WO RD ' IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTIO N 132' BUT IN THE INSTANT CASE, NO SEARCH PROCEEDING WAS INITIATED. THE SAME PLEA WAS TAKEN BY THE APPELLANT IN ITS WRITTEN REPLY. THE SAME VIEW IS ALSO SUPPORTED BY THE HON'BLE ITAT BENCH OF NISHITA SINGHAL 9 PANAJI IN THE CASE OF DCIT VS VOLGA DRESSES ITA NO 201 & 202/PAN/2016 WHEREIN IT WAS HELD BY THE HON'BLE BENCH OF ITAT, PANAJI THAT 'PENALTY UNDER SECTION 271AAB COULD NOT BE LEVIED UNLESS THERE IS A SEARCH UNDER SECTION 132 OF THE ACT ON THE ASSESSEE.' 4.5' THE ASSESSMENT WAS COMPLETED IN THE APPELLANT'S CASE U] S 143(3) LW.S. 153C; HENCE~ THE SECTION 27]A.A.G IS ALSO NOT APPLICABLE IN THIS CASE. THE SAID SECTION APPLI ES ONLY IN THOSE CASES WHERE ASSESSMENT HAS BEEN COMPLETED U/ S153A. OF THE ACT . 4.6 THE PROVISION OF THE SAID SECTION IS APPLICABLE ONLY ON AN INCOME WHICH IS NOT RECORDED IN THE BOOKS OF ACC OUNT.' IN THE INSTANT CASE, THE APPELLANT HAD NOT UNMAINTAINED RE GULAR BOOKS OF ACCOUNT. THE REASON GIVEN BY HER WAS THAT SHE DI D NOT CARRY OUT ANY BUSINESS ACTIVITY DURING THE YEAR UNDER CON SIDERATION. THE SAID AMOUNT WAS RECEIVED BY HER AS A GIFT; THER EFORE, THERE WAS NO NEED TO HER TO MAINTAIN BOOKS' OF ACCOUNT. F URTHER, THE APPELLANT HAD DEPOSITED ENTIRE TAX AND HAD FILED TH E RETURN OF INCOME BEFORE THE DUE DATE SO REQUIRED U/ S 139 OF THE ACT, WHICH HAD ALSO BEEN ACCEPTED BY THE AO IN THE FIRST PARA OF THE ASSESSMENT ORDER. THE. APPELLANT HAD ALSO PAID TAX AND RETURN WAS ALSO FILED BEFORE THE . ISSUANCE OF NOTICE U J S 153C OF THE ACT. 4.7 HENCE AFTER TAKING INTO ACCOUNT ALL THE FACTUAL MATRIX AND CIRCUMSTANCES OF THE CASE, THE FOLLOWING POINTS ARE EMERGED OUT:- 1. NO SEARCH WAS CONDUCTED IN THE APPELLANTS CASE, THUS THE SAID SECTION DOES NOT APPLY. 2. NO BOOKS OF ACCOUNT WERE MAINTAINED BY THE APPEL LANT AS SHE WAS NOT ENGAGED IN ANY BUSINESS ACTIVITY. SHE HAD R ECEIVED THE SAID AMOUNT AS GIFT. 3. THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 1 53C NOT IN THE SECTION 153A, THEREFORE, THE SAID SECTION DOES NOT ATTRACT IN THE APPELLANTS CASE. 4. THE APPELLANT HAD DEPOSITED ENTIRE TAX AND HAD F ILED THE RETURN OF INCOME BEFORE THE DUE DATE U/S 139 OF THE ACT, WHICH HAD BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE F IRST PARA OF THE ORDER. THE APPELLANT HAS ALSO PAID TAX AND RETU RN WAS ALSO FILED BEFORE THE ISSUANCE OF NOTICES U/S 153C OF TH E ACT. 4.8. THUS, IN VIEW OF THE ABOVE FACTS, THE PENALTY SO IMPOSED BY THE ASSESSING OFFICER IS HEREBY DELETED AND ACCORDI NGLY, THIS GROUND OF APPEAL IS ALLOWED. 9. FROM PERUSAL OF THE ABOVE FINDING OF LD. CIT(A) AS WELL AS THE DECISION OF COORDINATE BENCH PANJI IN THE CASE OF VOLGA DRESSES ITA NO 201 & 202/PAN/2016 WHICH STANDS NISHITA SINGHAL 10 UNCONTROVERTED BY THE LD. DR BEING UNABLE TO PLACE ANY DECISION FAVOURING REVENUE ON THIS ISSUE, WE AR E OF THE VIEW THAT SINCE NO SEARCH WAS CONDUCTED IN THE CASE OF ASSESSEE AND SINCE ASSESSMENT HAS BEEN MADE U/S 153C OF THE ACT, PENALTY PROCEEDINGS CANNOT BE INITIATED U/S 271AAB OF THE ACT. EVEN OTHERWISE IN THE PENALTY NOTICE LD. ASSESSING OFFICER THOUGH HAS LEV IED THE PENALTY U/S 271AAB OF THE ACT BUT HAS NOT CALCULATED THE PENALTY UNDER THE PROVISION OF SECTI ON 271AAB OF THE ACT. IN PARA 8 OF THE PENALTY ORDER L D. ASSESSING OFFICER STATES THAT THE MINIMUM PENALTY I S LEVIABLE IS RS.60 LAKH AND MAXIMUM PENALTY IS LEVIA BLE IS RS.1,80,00,000/- WHICH IS NORMALLY CALCULATED WH EN APPLYING THE PROVISION OF SECTION 271(1)(C) OF THE ACT BUT FINALLY LD. ASSESSING OFFICER LEVIED THE PENALT Y OF RS.65 LAKHS. IT IS ALSO NOT UNDERSTANDABLE AS TO HO W THE PENALTY AMOUNT HAS BEEN WORKED OUT U/S 271AAB OF THE ACT. PROVISION OF SECTION 271AAB OF THE ACT AS REFERRED ABOVE IN THE FINDING OF LD. CIT(A) STATES THAT THE PENALTY UNDER THIS SECTION CAN BE LEVIED EITHER @ 10% OF THE UNDISCLOSED INCOME U/S 271AAB(1)(A) OF T HE NISHITA SINGHAL 11 ACT, OR 20% OF THE UNDISCLOSED INCOME IF THE CASE O F THE ASSESSEE FALLS U/S 271AAB(1)(B) OF THE ACT OR 60% O F THE UNDISCLOSED INCOME IF THE CASE OF THE ASSESSEE FALL S UNDER THE PROVISION OF SECTION 271AAB(1)(C) OF THE ACT BUT THE ALLEGED PENALTY AMOUNT DOES NOT FALL IN EIT HER OF THE THREE CASES. THIS IN ITSELF SHOWS THAT THE LD. ASSESSING OFFICER WAS NOT AWARE AS TO ON WHAT BASIS HE WAS LEVYING THE PENALTY. THIS ACTION OF THE LD. ASSESSING OFFICER IN ITSELF MAKES THE PENALTY PROCEEDINGS NULL AND VOID, AS ASSESSEE WAS NOT SERVED WITH A CORRECT NOTICE U/S 274 OF THE ACT TO INITIAT E THE PENALTY PROCEEDINGS. WE, THUS, FIND NO INFIRMITY IN THE FINDING OF LD. CIT(A) DELETING THE PENALTY LEVIED U /S 271AAB OF THE ACT. ACCORDINGLY GROUNDS RAISED BY TH E REVENUE STANDS DISMISS. 10. NOW WE TAKE THE CROSS OBJECTION FILED BY THE ASSESSEE. THE ASSESSEE HAS RAISED NUMBER OF GROUNDS WHICH ARE REPETITIVE AND ARGUMENTATIVE IN NATURE. E VEN OTHERWISE SINCE WE HAVE ALREADY CONFIRMED THE ORDER OF LD. CIT(A) DELETING THE PENALTY LEVIED U/S 271AAB O F THE ACT ADJUDICATING THE ISSUES RAISED IN THE CROSS NISHITA SINGHAL 12 OBJECTIONS WILL BE MERELY ACADEMIC IN NATURE AND THU S THE SAME ARE DISMISSED AS INFRUCTUOUS. 11. IN THE RESULT, REVENUES APPEAL IN ITANO.935/IND/2019 & ASSESSEES CONO.12/IND/2020 AR E DISMISSED. THE ORDER PRONOUNCED AS PER RULE 34 OF ITAT RULES, 1963 ON 04.10.2021. SD/- SD/- (RAJPAL YADAV) (MANISH BORAD) VICE PRESIDENT ACCOUNTANT ME MBER / DATED : 04.10., 2021 PATEL/PS COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE