The DCIT, Central Circle-4, Surat V. M/s. K.G.Developers, Surat

ITA 1139/AHD/2012

• Counselvise Citation: 113920514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-09-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 28-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: M J SHAH
• Keywords: Income from undisclosed sources
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI T.R. MEENA, ACCOUNTANT MEM BER THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, SURAT (APPELLANT) VS M/S K.G. DEVELOPERS FINAL PLOT NO. 104, ALTHAN CANAL ROAD, NR. GUJARAT VITRAN MANTHAK, SURAT, PAN: AAIFK9749C (RESPONDENT) REVENUE BY: SRI P.L. KUREEL, SR.D.R. ASSESSEE BY: SRI M.J. SHAH, A.R. DATE OF HEARING : 04-09-2013 DATE OF PRONOUNCEMENT : 13-09-20 13 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE REVENUES APPEAL AGAINST THE ORDER OF LD. CIT(A)-II AHMEDABAD DATED 22-03-2012. 2. REVENUE HAS TAKEN FOLLOWING EFFECT GROUND:- ITA NO. 1139/AHD/2012 ASSESSMENT YEAR 2009-10 I.T.A NO.1139/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. M/S K.G. DEVELOPERS 2 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO DELETE THE PENALTY OF RS. 5,20,000/- LEVIED B Y THE ASSESSING OFFICER U/S. 271AAA OF THE ACT. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH U/S. 1 32 WAS CARRIED OUT AT THE RESIDENCE OF SHI SHAILESH GONAWALA, THE PARTNER OF THE FIRM ON 20-01-2009. SHRI SHAILESH GONAWALA, ON BEHALF OF THE FIRM, MADE DISCLOSURE OF UNACCOUNTED INCOME OF RS. 52,50,000/-. THE ASSESSE E FURNISHED ITS RETURN OF INCOME DECLARING UNDISCLOSED INCOME OF RS. 52,50,00 0/- ADMITTED BY THE PARTNER OF THE FIRM DURING THE SEARCH U/S. 132 OF T HE ACT. ASSESSMENT WAS COMPLETED AT DECLARED INCOME OF RS. 52,50,000/-. PENALTY PROCEEDINGS U/S. 271AAA WERE INITIALED ON ADMITTED UNDISCLOSED INCOM E OF RS. 52,50,000/- AND AFTER ISSUING SHOW CAUSE NOTICE AND AFTER TAKIN G INTO CONSIDERATION THE ASSESSEES SUBMISSION, AO LEVIED PENALTY OF RS. 5, 20,500/-ON THE GROUND THAT THE ASSESSEE DID NOT DESCRIBE THE MANNER IN WH ICH SUCH INCOME WAS DERIVED BY HIM AS THE ASSESSEE HAD NOT FILED ANY SP ECIFIC DETAILS OF THE AMOUNT RECEIVED. 4. IN APPEAL, THIS PENALTY WAS DELETED BY LD. CIT(A ) BY OBSERVING AS UNDER:- 5. I HAVE CONSIDERED THE FACTS OF THE CASE, THE OR DER OF THE ASSESSING OFFICER LEVYING PENALTY, THE SUBMISSIONS OF THE APP ELLANT AND THE CASE LAWS RELIED UPON. IT IS SEEN THAT THERE IS NO SEA RCH U/S.132 IN THE CASE OF THE FIRM AND ACCORDINGLY, SECTION 271AAA IS NOT APPLICABLE AT ALL AND THEREFORE, THE PENALTY U/S.271AAA NEEDS TO BE D ELETED OUT RIGHTLY AS BEING ILLEGAL AND BAD IN LAW SINCE SECTION 271AA A IS APPLICABLE ONLY IN A CASE WHERE SEARCH ACTION U/S.132 HAS BEEN INITIATED. FROM THE FACTS THAT IN THE CASE OF THE APPELLANT FIRM, T HE ASSESSMENT ORDER FOR A.Y. 2008-09 WAS PASSED U/S. 143(3) R.W.S. 153C AND FROM THE COPY OF THE PANCHNAMA IN THE CASE OF SHRI SHAILESH GONAWALA, IT IS I.T.A NO.1139/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. M/S K.G. DEVELOPERS 3 ESTABLISHED THAT NO SEARCH ACTION WAS INITIATED IN THE CASE OF THE APPELLANT FIRM AND ON GOING THROUGH THE PROVISIONS OF SECTION 271AAA AND THE DEFINITION OF THE 'SPECIFIED PREVIOUS YEAR IN SUB CLAUSE (B) OF EXPLANATION 2 TO SECTION 271AAA, I AGREE WITH THE A PPELLANT THAT THE PROVISIONS OF SECTION 271AAA ARE NOT APPLICABLE IN THE PRESENT CASE OF THE APPELLANT AS NO SEARCH ACTION HAS BEEN INITIATE D U/S. 132 OF THE I.T. ACT IN THE CASE OF THE APPELLANT. AS PER ALTERNATIVE ARGUMENTS OF THE APPELLANT AND T HE CASE LAWS RELIED UPON ALSO, THE PENALTY U/S. 271AAA IS NOT LEVIABLE AS ALL THE THREE CONDITIONS PROVIDED IN EXCEPTION IN SUBSECTION (2) OF SECTION 271AAA, ARE FULFILLED. HENCE, THE PENALTY OF RS.5 , 20,500/- AS LEVIED U/S.271AAA OF THE I.T. ACT BY THE ASSESSING OFFICER IS DELETED. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT NO SEARCH O PERATION U/S. 132 OF THE ACT WAS CONDUCTED IN ASSESSEES CASE. THEREFORE PROVIS IONS OF SECTION 271AAA ARE NOT ATTRACTED IN HIS CASE BECAUSE SECTION 271AA A IS APPLICABLE ONLY IN CASES WHERE SEARCH U/S. 132 HAS BEEN INITIATED WHIC H IS CLEAR FROM THE PLAIN READING OF THIS SECTION WHICH READS AS UNDER:- PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 O N OR AFTER THE 1 ST DAY OF JUNE, 2007 [BUT BEFORE THE 1 ST DAY OF JULY, 2012], THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, I F ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE U NDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. IN VIEW OF THE ABOVE, WE FEEL NO NEED TO INTERFERE WITH THE ORDER PASSED BY LD. CIT(A) AND THE SAME IS HEREBY UPHELD. I.T.A NO.1139/AHD/2012 A.Y. 2009-10 PAGE NO DCIT VS. M/S K.G. DEVELOPERS 4 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (T.R. MEENA) ( D.K. TYAGI) ACCOUNTANT MEMBER J UDICIAL MEMBER AHMEDABAD : DATED 13/09/2013 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER/ , / ,