NEELAM SOORMA, MUMBAI V. ASST CIT CEN RG 15 & 16, MUMBAI

ITA 1023/MUM/2016

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4725 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 01-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Search and seizure; Set aside
• Section: 201; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI SHAMIM YAHYA ( AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 1023/MUM/2016 ASSESSMENT Y EAR: 2010 - 11 SMT. NEELAM SOORMA, SHIV SHAKTI, PLOT NO. 30, N S ROAD NO. 10, JUHU, MUMBAI - 400049 PAN: AEXPS4136C VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL RANGE 15 &16, AIR INDIA BUILDING, 19 TH FLOOR, NARIMAN POINT, MUMBAI - 400021 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIPUL JOSHI & MS. DINKLE HARIYA (A R) REVENUE BY : SHRI D.G. PANSARI (D R) DATE OF HEARING: 28/11 /201 8 DATE OF PRONOUNCEMENT: 22 / 02 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27.11.20 15 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 51 (FOR SHORT THE CIT (A) ) , MUMBAI , FOR THE ASSESSMENT YEAR 2010 - 11 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER PASSED U/S 271AAA OF THE INCOME TAX A CT, 1961 (FOR SHORT THE ACT). 2. BRIEF FACTS OF THE CASE IS THAT A SEARCH AND SEIZURE WAS CARRIED OUT IN THE CINEYUG GROUP ON 25.11.2009 AT THE OFFICE PREMISES AS WELL AS RESIDENTIAL PREMISES OF THE DIRECTORS/ PARTNERS OF THE GROUP. T HE ASSESSEE, AN IND IVIDUAL AND ONE OF THE DIRECTOR S /PARTNER S OF CINEYUG GROUP CONCERNS IS ENGAGED IN THE BUSINESS & PROFESSIONAL ACTIVITIES OF FILM PRODUCTION, MANAGEMENT OF THE ENTERTAINMENT/EVENT SHOWS AND DISPLAY OF FIREWORKS . DURING THE COURSE OF SEARCH THE ASSESSEE MADE TOTAL DISCLOSURE OF RS. 52,10,585/ - , WHICH WAS 2 ITA NO. 1023/MUM/2016 ASSESSMENT YEAR: 2010 - 11 REFLECTED IN THE RETURN OF INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE SAID AMOUNT WAS ADDED BACK TO THE INCOME OF THE ASSESSEE AS ADDITIONAL DISCLOSED INCOME. ACCORDINGLY, THE AO INITIATED PENAL TY PROCEEDINGS U/S 271AAA AND LEVIED PENALTY OF RS. 5,21,058/ - AFTER OBTAINING APPROVAL FROM THE ADDITIONAL COMMISSIONER OF INCOME TAX. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE CIT(A). THE LD. CIT(A) AFTER HEARING THE ASSESSEE/APPELLANT RESTRIC TED THE PENALTY TO RS. 4,40,280/ - . STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE FOLLOWING EFFECTIVE GROUNDS: 1. A. ON FACTS & IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) 51, MUMBAI [THE CIT (A) ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271AAA OF THE INCOME TAX ACT, 1961 (ACT) IN RESPECT OF INCOME DISCLOSED OF RS. 44,02,810/ - . 1. B. THE CIT (A) ERRED IN FACTS AND IN LAW IN NOT CONSIDERING THE SUBMISSION MADE BEFO RE HIM FULLY AND THEREBY CONFIRMING THE PENALTY LEVIED UNDER SECTION 271AAA OF THE ACT. THE APPELLANT THEREFORE PRAYS THAT THE ORDER OF THE CIT (A) BE SET ASIDE AND THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 15 & 16, MUMBAI BE DIRECTED TO DE LETE THE PENALTY LEVIED OF RS. 44,02,80/ - UNDER SECTION 271 AAA OF THE ACT. 4. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN SUSTAINING PENALTY IN RESPECT OF RS. 44,02,810/ - IGNORING THE SUBMISSIONS MADE BY THE AS SESSEE. THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEE IS IN THE BUSINESS OF ENTERTAINMENT AS A SCRIPT WRITER AND ALLIED SERVICES. THE ASSESSEE EARNED AN ADDITIONAL INCOME OF RS. 44,52,810/ - DURING THE RELEVANT YEAR, WHICH SHE SPENT ON TRAVELING LODGI NG AND BOARDING ETC. THE ASSESSEE HAD DISCLOSED THE SAID INCOME U/S 132 (4) OF THE ACT, THE AO WHILE COMPLETING ASSESSMENT HAS ACCEPTED THIS INCOME AND NOT MADE ANY ADVERSE OBSERVATION. ONCE THE DEPARTMENT HAS ACCEPTED THE DISCLOSURE MADE ON THE 3 ITA NO. 1023/MUM/2016 ASSESSMENT YEAR: 2010 - 11 BASIS OF T HE PLEA OF THE ASSESSEE PENALTY U/S 271 AA A OF THE ACT CANNOT BE LEVIED. THE LD. COUNSEL FURTHER CONTENDED THAT THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS LAID DOWN IN SUB SECTION 2 OF SECTION 271 AA A OF THE ACT. THE LD. COUNSEL FURTHER CONTENDED THAT S INCE NO SPECIFIC QUERY WAS PUT TO THE ASSESSEE BY DRAWING H ER ATTENTION TO SECTION 271AAA OF THE ACT ASKING HIM TO SPECIFY THE MANNER IN WHICH THE UNDISCLOSED INCOME SURRENDERED DURING THE COURSE OF SEARCH HAD BEEN DERIVED , PENALTY IS NOT SUSTAINABLE IN VI EW OF THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. EMIRATES TECHNOLOGIES PVT. LTD . 399 ITR 189 (DEL) . THE LD. COUNSEL FURTHER SUBMITTED THAT THE ASSESSEES CASE IS OTHERWISE COVERED BY THE PRINCIPLE LAID DOWN BY THE HONBLE HIGH COU RT IN WHICH IT HAS BEEN HELD THAT WHEN JURISDICTIONAL REQUIREMENT OF SECTION 271AAA WAS NOT MET, THE PENALTY U/S 271AAA IS NOT JUSTIFIED. 5 . ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE ORDER OF THE LD. CIT (A) SUBMITTED THA T SINCE THE ASSESSEE HAS FAILED TO FULFILL THE CONDITIONS UNDER SUB SECTION 2 OF SECTION 271AAA OF THE ACT, THE LD. CIT (A) HAS RIGHTLY SUSTAINED THE PENALTY TO THE EXTENT OF RS. 44,02,810/ - . 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIA L ON RECORD INCLUDING THE CASES RELIED UPON BY THE PARTIES. THE ONLY GRIEVANCE OF THE ASSESSEE/APPELLANT IS THAT THE LD. CIT (A) HAS WRONGLY SUSTAINED THE PENALTY OF RS. 44,02,810/ - U/S 271AAA OF THE ACT. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, THE AO HAS NOT PUT SPECIFIC QUERY TO THE ASSESSEE BY DRAWING HER ATTENTION TO SECTION 271AAA OF THE ACT ASKING HER TO SPECIFY THE MANNER IN WHICH THE UNDISCLOSED INCOME SURRENDERED DURING THE COURSE OF SEARCH HAD BEEN DERIVED. HOWEVER, WE NOTICE THAT THE ASSESSEE HAS EXPLAINED THAT SINCE SHE HAD NO OTHER BUSINESS THEN THE BUSINESS OF FILM P RODUCTION, M ANAGEMENT OF THE E NTERTAINMENT/ E VENT , THE QUESTION OF EARNING INCOME FROM ANY OTHER SOURCE DOES NOT ARISE. T HE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT V S. 4 ITA NO. 1023/MUM/2016 ASSESSMENT YEAR: 2010 - 11 EMIRATES TECHNOLOGIES PVT. LTD. (SUPRA ) HAS HELD THAT WHEN JURISDICTIONAL REQUIREMENT OF SECTION 271AAA WAS NOT MET PENALTY IMPOSED U/S 271AAA SHOULD NOT BE JUSTIFIED. THE RELEVANT PARAS OF THE ORDER OF THE HONBLE HIGH COURT READ AS UNDER: - 2. THE QUE STION SOUGHT TO BE URGED BY THE REVENUE IS WHETHER THE ITAT ERRED IN LAW IN CONFIRMING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL) [ CIT (A)] DELETING THE PENALTY IMPOSED UPON THE RESPONDENT ASSESSEE UNDER SECTION 271AAA OF THE INCOME TAX ACT, 196 1. 3. THE CIT (A) IN PARA 4.7 OF THE ORDER DATED 4 TH NOVEMBER, 2013 NOTED THAT NO SPECIFIC QUERY HAD BEEN PUT TO THE ASSESSEE BY DRAWING HIS ATTENTION TO ITA 400/2017 PAGE 1 OF 2 SECTION 271AAA OF THE ACT ASKING HIM TO SPECIFY THE MANNER IN WHICH THE UNDI SCLOSED INCOME, SURRENDERED DURING THE COURSE OF SEARCH, HAD BEEN DERIVED. THE CIT (A), THEREFORE, RELYING ON THE DECISION OF THIS COURT HELD THAT THE JURISDICTIONAL REQUIREMENT OF SECTION 271AAA WAS NOT MET. 7 . IN OUR CONSIDERED VIEW, THE SOLE GROUND OF APPEAL OF THE ASSESSEE IS COVERED IN FAVOUR OF ASSESSEE BY THE ORDER OF THE HONBLE DELHI HIGH COURT DISCUSSED ABOVE. HENCE, RESPECTFULLY FOLLOWING THE AFORESAID DECISION, WE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S 271AAA OF THE ACT. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 11 IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY , 2019 . SD/ - SD/ - ( SHAMIM YAHYA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 22 / 02 / 201 9 ALINDRA, PS 5 ITA NO. 1023/MUM/2016 ASSESSMENT YEAR: 2010 - 11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI