M/s. Cargo Solutions Pvt. Ltd., Bhubaneswar V. DCIT, Central Circle - 1(4), Kolkata, Kolkata

CO 78/KOL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1261 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 02-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K TRIBREWAL
• Assessee Lawyers: P K SRIHARI
• Keywords: Assessment record
• Section: 133A; 153A; 32; 132

Judgement Text

1 ITA NO. 227/KOL/2017 & CO NO.78/KOL/2018 CARGO SOLUTIONS PVT. LTD., AY 2013-14 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NO. 227/KOL/2017 ASSESSMENT YEAR: 2013-14 DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(4), KOLKATA. VS. M/S. CARGO SOLUTIONS PVT. LTD. (PAN: AACCC8397F) APPELLANT RESPONDENT & C.O. NO. 78/KOL/2018 IN I.T.A. NO. 227/KOL/2017 ASSESSMENT YEAR: 2013-14 M/S. CARGO SOLUTIONS PVT. LTD. VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(4), KOLKATA. CROSS OBJECTOR RESPONDENT DATE OF HEARING 20.11.2018 DATE OF PRONOUNCEMENT 28.11.2018 FOR THE APPELLANT SHRI P. K. SRIHARI, CIT, DR FOR THE RESPONDENT SHRI A. K. TRIBREWAL, AR ORDER PER SHRI A.T.VARKEY, JM THE APPEAL PREFERRED BY THE REVENUE AND THE CROSS O BJECTION FILED BY THE ASSESSEE ARE AGAINST THE ORDER OF THE LD. CIT(A)-20, KOLKATA DAT ED 26.09.2016 FOR AY 2013-14. 2. THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT (A) IN DELETING THE PENALTY LEVIED U/S. 271AAB OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) IN VIOLATION OF RULE 46A OF THE I. T. RULES, 1962 AND THE CROSS OBJ ECTION OF THE ASSESSEE IS THAT OF THE AO OUGHT NOT TO HAVE LEVIED PENALTY U/S. 271AAB OF THE ACT SINCE NO SEARCH WAS INITIATED IN THE CASE OF THE ASSESSEE COMPANY U/S. 132 OF THE ACT. 2 ITA NO. 227/KOL/2017 & CO NO.78/KOL/2018 CARGO SOLUTIONS PVT. LTD., AY 2013-14 3. WE NOT THAT THE ASSESSEE HAS RAISED THE LEGAL ISSUE IN ITS CROSS OBJECTION SO WE ARE INCLINED TO ADJUDICATE THE SAME FIRST. THOUGH THE LD. CIT, DR VEHEMENTLY OPPOSED THE ADMISSION OF THE LEGAL ISSUE FOR THE FIRST TIME BEF ORE US, WE TAKING NOTE OF THE HONBLE SUPREME COURT DECISION IN NTPC VS. CIT 229 ITR 383 (SC) ARE INCLINED TO ADMIT THE LEGAL ISSUE WHICH THE ASSESSEE HAS RAISED FOR THE FIRST T IME BEFORE THIS TRIBUNAL. THE ASSESSEE HAS CHALLENGED THE INVOCATION OF PENALTY PROCEEDING U/S . 271AAB OF THE ACT ON THE GROUND THAT THE ASSESSEE COMPANY WAS NOT SEARCHED U/S. 132 OF T HE ACT. 4. BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE A SURVEY OPERATION WAS CONDUCTED AGAINST THE ASSESSEE NAMELY, CARGO SOLUTIONS PVT. LTD. ON 1 6.10.2012 WHILE SEARCH TOOK PLACE ON THE SAME DAY AT THE PREMISES OF GHANASHYAM MISRA GR OUP OF CASES. AFTER THE SURVEY OPERATION CONDUCTED AT THE ASSESSEES PREMISES ON 1 6.10.2012 THE AO ISSUED 153C NOTICE DATED 18.02.2015, WHICH IS REPRODUCED AS UNDER: 3 ITA NO. 227/KOL/2017 & CO NO.78/KOL/2018 CARGO SOLUTIONS PVT. LTD., AY 2013-14 4 ITA NO. 227/KOL/2017 & CO NO.78/KOL/2018 CARGO SOLUTIONS PVT. LTD., AY 2013-14 WE NOTE FROM THE ORDER SHEET BEFORE US THAT WHEN TH E MATTER WAS FIXED FOR HEARING ON 7 TH TIME ON 26.07.2018 THIS TRIBUNAL PASSED THE FOLLOWI NG INTERIM ORDER: LD. AR A. K. TIBREWAL, FCA AND LD. CIT, DR, A. K. TIWARI PRESENT FOR THE ASSESSEE AND REVENUE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS T HAT THE ASSESSEE AS A RESPONDENT WANTS TO RAISE A NEW LEGAL ISSUE TO SUPPORT THE IMPUGNED ORDER OF THE CIT(APPEAL) CANCELLING THE PENALTY IMPOSED BY THE AO U/S. 271AAB(1)(A) ON THE GROUND THAT THERE WAS NO SEARCH ACTION CONDUCTED IN THE CASE OF ASSESSEE. THE LD. DR SEEK S TIME TO PREPARE THE REPLY OF THE REVENUE ON THIS ISSUE. SINCE THIS ISSUE IS IMPORTANT, WHIC H IS LIKELY TO ARISE IN OTHER CASES ALSO, THIS CASE IS TO BACK TO C BENCH AND HEARING IS ADJOURN ED TO 24.09.2018. THE LD. DR IS ALSO DIRECTED TO PRODUCE THE RELEVANT ASSESSMENT RECORDS WHICH IS NECESSARY FOR DECIDING THIS ISSUE. SD/- (SSG) SD/ (PMJ) JM AM 5. WE NOTE THAT ON 26.07.2018 THE LD. DR SOUGHT TI ME TO PREPARE THE REPLY OF THE REVENUE AS TO WHETHER THE PENALTY U/S. 271AAB WOULD SURVIVE SINCE THERE WAS NO SEARCH U/S. 132 OF THE ACT CARRIED OUT AGAINST THE ASSESSE E COMPANY. EVEN THE DEPARTMENT WAS DIRECTED TO PRODUCE THE RELEVANT ASSESSMENT RECORDS . HOWEVER, THE DEPARTMENT COULD NOT CONTROVERT THE CHALLENGE RAISED BY THE ASSESSEE THA T IN ITS CASE ON 16.10.2012 ONLY SURVEY U/S. 133A OF THE ACT HAPPENED AND NOT SEARCH U/S. 1 32 OF THE ACT AND ALSO THAT THE AO INITIATED 153C PROCEEDINGS AND NOT 153A PROCEEDINGS AGAINST THE ASSESSEE AND FRAMED THE ASSESSMENT ORDER. FROM THE PERUSAL OF THE RECORD OF THE SURVEY PROCEEDINGS PLACED BEFORE US, WE NOTE THAT THERE WAS A SURVEY PROCEEDINGS AT THE PREMISES OF THE ASSESSEE ON 16.10.2012 AND ON A PERUSAL OF THE NOTICE ISSUED BY THE AO DATED 18.02.2015, SUPRA REVEALS THAT THE AO INTENDED TO INVOKE SEC. 153C PROCEEDING S AGAINST THE ASSESSEE. IN SUCH A SCENARIO, WE FIND FORCE IN THE CHALLENGE RAISED BY THE ASSESSEE THAT WITHOUT SEARCH BEING INITIATED U/S. 132 OF THE ACT AGAINST THE ASSESSEE, PENALTY PROVISIONS ENVISAGED IN SEC. 271AAB OF THE ACT CANNOT BE INITIATED AGAINST THE A SSESSEE. A PERUSAL OF THE HEADING TO THE PROVISION OF SEC. 271AAB READS AS PENALTY WHERE SEARCH HAS BEEN INITIATED AND ON FURTHER PERUSAL OF THE PROVISION OF SECTION 271AAB IT REVEALS ABOUT THE ASSESSEES DISCLOSURE BY STATEMENT U/S. 132(4) ABOUT ANY UNDISCLOSED INCO ME IN THE COURSE OF SEARCH. ADMITTEDLY, IN THE PRESENT CASE, THERE HAS BEEN NO SEARCH U/S. 132 OF THE ACT. SEARCH HAPPENED IN THE CASE OF GHANSHYAM MISRA GROUP OF CASES ON 16.10.201 2 AND ADMITTEDLY THERE WAS SURVEY PROCEEDING U/S. 133A ON 16.10.2012 AGAINST THE ASSE SSEE COMPANY. WE NOTE THAT THE AO 5 ITA NO. 227/KOL/2017 & CO NO.78/KOL/2018 CARGO SOLUTIONS PVT. LTD., AY 2013-14 HAS NOT INITIATED ANY 153A PROCEEDING PURSUANT TO T HE SEARCH AND IN CASE IF THE ASSESSEE HAD BEEN SEARCH U/S. 132 OF THE ACT, THEN PROCEEDINGS U /S. 153A OF THE ACT SHOULD HAVE BEEN INITIATED AGAINST THE ASSESSEE. IN THIS CASE, FROM A PERUSAL OF THE NOTICE REVEALS THAT THE AO HAS INITIATED 153C PROCEEDINGS AGAINST THE ASSESSEE . IN THE LIGHT OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY U/S. 271AAB COULD NOT HAVE BEEN INITIATED BY THE AO SINCE THERE HAS BEEN NO SEARCH ON THE ASSESS EE COMPANY. THEREFORE, THE ASSESSEE SUCCEEDS AND THE VERY INITIATION OF PENALTY PROCEED ING U/S. 271AAB OF THE ACT IS QUORAM NON JUDICE AND NON-EST IN THE EYES OF LAW AND IS, T HEREFORE, QUASHED. TO COME TO SUCH A CONCLUSION, WE RELY ON THE COORDINATE BENCH DECISIO N IN THE CASE OF DCIT VS. VOLGA DRESSES, IN ITA NO. 201 & 202/PAN/2016 FOR AYS 2013 -14 AND 2014-15 DATED 27.03.2017. IN THE SAID CASE, IT HAS BEEN HELD AS UNDER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERU SAL OF THE PROVISIONS OF SECTION 271AAB SHOWS THAT THE OPENING WORDS ARE PENALTY WHERE SEA RCH HAS BEEN INITIATED A PERUSAL OF THE PROVISIONS UNDER SECTION 271AAB ALSO TALKS OF THE A SSESSEE DECLARING ANY UNDISCLOSED INCOME IN THE COURSE OF THE SEARCH IN THE STATEMENT UNDER SECTION 132(4). ADMITTEDLY IN THE PRESENT CASE, THAT IS IN THE CASE OF THE ASSESSEE FIRM IN A PPEAL THERE HAS BEEN NO SEARCH. SEARCH ADMITTEDLY IS ON THE RESIDENCE OF ONE OF THE PARTNE R OF THE ASSESSEE FIRM. FURTHER A PERUSAL OF THE ORDER OF THE LEARNED LD. CIT(A) ALSO CLEARLY SH OWS THAT THE LEARNED CIT(A) HAS CANCELLED THE PENALTY ON THE GROUND THAT THERE WAS NO SEARCH IN THE CASE OF THE ASSESSEE FIRM. THE REVENUE HAS NOT BEEN ABLE TO POINT OUT AS TO HOW TH IS FINDING OF THE LEARNED CIT(A) IS ERRONEOUS. THIS BEING SO THE FINDING OF THE LEARNE D CIT(A) ON THIS ISSUE STANDS CONFIRMED. SINCE WE ALLOW THE LEGAL ISSUE RAISED BY THE ASSESS EE IN ITS CROSS OBJECTION IN RESPECT OF PENALTY PROCEEDINGS U/S. 271AAB OF THE ACT, THE REV ENUE APPEAL HAS BECOME ACADEMIC AND INFRUCTUOUS. THEREFORE, WE DISMISS THE REVENUES A PPEAL AND ALLOW THE CROSS OBJECTION OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL BY THE REVENUE IS DI SMISSED AND THE CROSS OBJECTION OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28TH NOVEMBE R, 2018. SD/- SD/- (M. BALAGANESH) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28TH NOVEMBER, 2018 JD.(SR.P.S.) 6 ITA NO. 227/KOL/2017 & CO NO.78/KOL/2018 CARGO SOLUTIONS PVT. LTD., AY 2013-14 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT DCIT, CENTRAL CIRCLE-1(4), KOLKATA 2 RESPONDENT M/S. CARGO SOLUTIONS PVT. LTD., 103, 2 ND FLOOR, SAHEED NAGAR, BHUBANESWR, ODISHA-751007. 3 4 5 CIT(A) -20, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY