Surabi Bullion, Coimbatore V. ACIT, Coimbatore

CO 64/CHNY/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2490 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S PARAMASIVAM ITP
• Assessee Lawyers: SUPRIYO PAL
• Keywords: Income from undisclosed sources
• Section: 143(3); 263; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' # . $ , & ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICI AL MEMBER I.T.A.NO.334/MDS/2016 & C.O.NO.64/MDS/2016 ( / ASSESSMENT YEAR: 2013-14) THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, COIMBATORE VS M/S. SURABI BULLION, 405, SURYA COMPLEX, BIG BAZZAR STREET, COIMBATORE-641 001. PAN: ABRFS7669H ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. SUPRIYO PAL, JCIT /RESPONDENT BY : MR. S.PARAMASIVAM, ITP /DATE OF HEARING : 7 TH SEPTEMBER, 2016 /DATE OF PRONOUNCEMENT : 23 RD NOVEMBER, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THE APPEAL AND THE CROSS OBJECTION ARE FILED BY TH E REVENUE AND THE ASSESSEE RESPECTIVELY AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)- 18, CHENNAI DATED 30.09.2015 IN ITA NO.594/14-15 P ASSED UNDER SECTION 271 AAB OF THE ACT. 2. THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS AP PEAL; HOWEVER THE CRUX OF THE ISSUE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D IRECTING THE LEARNED ASSESSING OFFICER TO RESTRICT THE PENAL TY LEVIED UNDER SECTION 271AAB OF THE ACT TO 10% OF UNDISCLOS ED 2 ITA NO.334/MDS/2016 & C.O.NO.64/MDS/2016 INCOME AS AGAINST 30% LEVIED BY THE LEARNED ASSESSI NG OFFICER. 3. THE CRUX OF THE ISSUE RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY T O 10% OF THE UNDISCLOSED INCOME INSTEAD OF DELETING THE SAME . 4. BRIEF FACTS OF THE CASE ARE THAT A SEARCH & SEIZ URE OPERATION UNDER SECTION 132 OF THE ACT WAS CONDUCTE D ON 24.09.2012 IN THE CASE OF SHRI K.VASUDEVAN & SHRI K .KARTHIK, WHO ARE THE PARTNERS OF THE ASSESSEE FIRM. DURING T HE COURSE OF SEARCH, CASH AGGREGATING TO RS.4,56,39,990/- WAS FOUND AND SEIZED FROM THE PARTNERS RESIDENCE AND THE BUS INESS PREMISES OF THE ASSESSEE AGAINST WHICH THE ASSESSEE ADMITTED RS.4,45,00,000/- AS UNDISCLOSED INCOME. PURSUANT TO NOTICE UNDER SECTION 143(2) THE ASSESSEE FILED I TS RETURN UNDER SECTION 153C OF THE ACT ON 19.09.2013 ADMITTI NG RS.4,42,78,230/- AS ITS INCOME AND DURING THE COUR SE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FURTHER ADMITTE D 3 ITA NO.334/MDS/2016 & C.O.NO.64/MDS/2016 RS.11,39,930/- AS ITS UNDISCLOSED INCOME. THEREAFT ER THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF TH E ACT ON 31.07.2014, ASSESSING THE INCOME AT RS.4,42,78,2 30/- AND UNACCOUNTED INCOME FROM THE BUSINESS AS RS. 11,39,9 30/- AGGREGATING TO RS. 4,56,39,930/- . SUBSEQUENTLY, TH E LEARNED ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 271AAB(I)(C) OF THE ACT AND LEVIED PENALTY @ 30% ON THE ENTIRE AMOUNT OF RS.4,56,39,930/- AMOUNTING TO RS.1,36,91,980/-. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) RELYING IN THE DECISION OF THE CHENNAI BE NCH OF THE TRIBUNAL IN THE CASE S.DURAIPANDI AND S.THALAVAIPAN DIAN VS. ACIT IN ITA NO.223 TO 229/MDS/2012, CHANDIGARH BENC H OF THE TRIBUNAL IN THE CASE ACIT VS. HANSRAJ (ASSESSM ENT YEAR 2008-09), KOLKATA BENCH OF THE TRIBUNAL IN THE CASE ACIT VS. NARENDRA N.THACKER IN IT(SS)A NO.01/KOL/2002 AND RA JKOT BENCH OF THE TRIBUNAL IN THE CASE RAM S.SARDA VS. D CIT IN ITA NO.1172/RJT/2010, RESTRICTED THE PENALTY AT 10% OF THE UNDISCLOSED INCOME BY OBSERVING AS UNDER:- 4 ITA NO.334/MDS/2016 & C.O.NO.64/MDS/2016 IN THE LIGHT OF THE ABOVE DISCUSSIONS, AS THE FACT ARE VERY SIMILAR IN THE INSTANT CASE, ORE ME THE APPELL ANT VEHEMENTLY ARGUED THAT HE HAD VALIDLY MADE REQUEST TO ADJUST THE SEIZED CASH WHICH WAS NOT ACTED UPON BY THE AO. RESPECTFULLY FOLLOWING THE. ITAT DECISIONS SUPR A, I AM OF THE OPINION THAT THE APPELLANT DEEMED TO HAVE BEEN PAID THE DEMAND WITHIN THE SPECIFIED DATE. JUS T BECAUSE AO FAILED TO ACT UPON THE ASSESSEE'S REQUES T THE APPELLANT SHOULD NOT BE PENALIZED. IN THESE CIRCUMSTANCES, THE APPELLANT HAS DEEMED TO HA VE BEEN PAID THE TAXES WITHIN THE SPECIFIED DATES AND THERE BY PENALTY U/ S. 271AAB SHALL BE RESTRICTED TO 10% OF THE UNDISCLOSED INCOME. AS THE APPELLANT SATISFIES EVER Y CONDITIONS OF SECTION 132B(4) AND EXPLAINED THE SOURCES THEREOF, I DIRECT THE AO TO RESTRICT THE PENALTY TO 10% AND THE APPEAL MAY BE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT SINCE THE ASSESSEE HAD NOT ADMITTED THE ENTIRE CASH SEIZED AS ITS UNDISCLOSED INCOME AND PAID TAX WITHIN THE SPECIFIED TIME, PENALTY LEVIED BY THE LEARNED ASSES SING OFFICER @ 30% IS JUSTIFIED AND THEREFORE THE ORDER OF THE LEARNED ASSESSING OFFICER MAY BE UPHELD. 7. THE LEARNED AUTHORIZED REPRESENTATIVE ON THE OTH ER HAND, SUBMITTED BEFORE US THAT THE LEARNED COMMIS SIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT HAD SET AS IDE THE ASSESSMENT ORDER FOR THE RELEVANT ASSESSMENT YEAR V IDE HIS ORDER DATED 15.07.2016 IN C.NO.2744/C-2/2016-17/01 AND 5 ITA NO.334/MDS/2016 & C.O.NO.64/MDS/2016 THEREFORE THE PENALTY ORDER SUBSEQUENTLY PASSED BY THE LEARNED ASSESSING OFFICER AND PARTLY CONFIRMED BY T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAVE BECOME INFRUCTUOUS, HENCE THE APPEAL OF THE REVENUE MAY BE DISMISSED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. WE FIND MERIT IN T HE CONTENTION OF THE LEARNED AUTHORIZED REPRESENTATIVE . THE LEARNED AUTHORIZED REPRESENTATIVE HAS PLACED BEFORE US THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX UNDER SECTION 263 OF THE ACT CITED SUPRA, WHEREIN H E HAS SET ASIDE THE ASSESSMENT ORDER DATED 31.07.2014 WITH A DIRECTION TO REDO THE ASSESSMENT WITH REGARD TO THE ISSUES DI SCUSSED IN THE ORDER UNDER SECTION 263. HENCE, AS ON DATE THE ASSESSMENT ORDER FOR THE RELEVANT ASSESSMENT YEAR D OES NOT EXIST AND THEREFORE THE PENALTY ORDER PASSED BY THE LEARNED ASSESSING OFFICER WHICH WAS PARTLY CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BOTH WILL ALSO NOT SURVIVE. FOR THE ABOVE STATED REASONS, THE APPEAL FILED BY 6 ITA NO.334/MDS/2016 & C.O.NO.64/MDS/2016 THE REVENUE AS WELL THE CROSS OBJECTION OF THE ASSE SSEE HAS BECOME INFRUCTUOUS. 9. IN THE RESULT, BOTH THE APPEAL OF THE REVENUE AN D THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED AS IN FRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON THE 23 RD NOVEMBER , 2016 SD /- SD/- ( ' # . $ ) ( . ) ( DUVVURU RL REDDY ) ( A. MOHAN ALANKAMONY ) ! # / JUDICIAL MEMBER # / ACCOUNTANT MEMBER ! /CHENNAI, & /DATED 23 RD NOVEMBER, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF