DCIT, New Delhi V. M/s. Sam India Abhimanyu Housing, Uttar Pradesh

ITA 1257/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6930 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 05-01-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIMA BARNWAL SENIOR
• Keywords: Search and seizure; Loose papers
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER ITA NO.1257/DEL./2015 (ASSESSMENT YEAR : 2011-12) DCIT, CENTRAL CIRCLE 13, VS. M/S. SAM INDIA ABHIMA NYU HOUSING, NEW DELHI. JAIPURIA PLAZA, SECTOR 26, NOIDA EXTENSION, UTTAR PRADESH-201 301. (PAN : ABUFS6733R) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.S. ANAND, CA REVENUE BY : SMT. ANIMA BARNWAL, SENIOR DR O R D E R PER A.T. VARKEY, JUDICIAL MEMBER : THIS APPEAL, AT THE INSTANCE OF THE REVENUE, IS FIL ED AGAINST THE ORDER OF CIT (APPEALS)-25, NEW DELHI DATED 14.01.2015 FOR TH E ASSESSMENT YEAR 2011. 2. THE ONLY EFFECTIVE GROUND TAKEN BY THE REVENUE I S AGAINST THE DELETION OF PENALTY LEVIED AMOUNTING TO RS.12,50,000/- ON AC COUNT OF UNDISCLOSED INCOME. 3. THE ASSESSEE FIRM WAS DEVELOPING A HOUSING PROJE CT IN NOIDA EXTENSION. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CARRIED OUT ON SAM INDIA BUILTWELL PRIVATE LIMITED & OTHERS ON 15. 06.2011, FEW ITA NO.1257/DEL./2015 2 DOCUMENTS/LOOSE PAPERS (CONTAINING SOME NOTINGS MOS TLY RELATING TO CASH EXPENDITURE) PERTAINING TO THE ASSESSEE WERE ALSO F OUND. SINCE THE MANAGEMENT WAS FINDING IT DIFFICULT TO CORRELATE EA CH OF SUCH CASH NOTINGS APPEARING ON SUCH DOCUMENTS/LOOSE PAPERS WITH THE E NTRIES APPEARING IN THE BOOKS OF ACCOUNT, IT HAD TAKEN A CONSCIOUS DECISION , WITH A VIEW TO BUY PEACE OF MIND AND TO AVOID LITIGATION, TO OFFER LUMP-SUM AMOUNT OF RS.1,25,00,000/- AS ITS INCOME FOR THE YEAR UNDER CONSIDERATION. IN RESPONSE TO THE NOTICE ISSUED U/S 153C OF THE INCOME-TAX ACT, 1961 (HEREIN AFTER THE ACT), THE ASSESSEE HAD FILED ITS RETURN OF INCOME DECLARING T OTAL INCOME OF RS.1,25,00,000/- FOR THE YEAR UNDER CONSIDERATION. THE AO ALSO COMPLETED THE ASSESSMENT VIDE ORDER DATED 26.03.2014 U/S 143( 3) R.W.S. 153C ON AN INCOME OF RS.1,25,00,000/-. 4. IN COMPLIANCE TO SHOW CAUSE NOTICE DATED 01.09.2 014 ISSUED WITH REFERENCE TO PENALTY PROCEEDINGS U/S 271AAA, THE AS SESSEE HAD FILED ITS REPLY DATED 09.09.2014 THROUGH WHICH THE ASSESSEE HAD REQ UESTED THE AO TO DROP THE PENALTY PROCEEDINGS INITIATED U/S 271AAA. HOWE VER, THE AO IMPOSED THE PENALTY U/S 271AAA AT RS.12,50,000/- ON THE BASIS T HAT THE CASE OF THE ASSESSEE IS COVERED UNDER THE PROVISIONS OF SECTION 271AAA AND ALSO THAT THE ASSESSEE HAD FAILED TO SATISFY THE CONDITIONS MADE IN THE PROVISION OF SECTION 271AAA. ITA NO.1257/DEL./2015 3 5. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BE FORE THE FIRST APPELLATE AUTHORITY AND THE LD. CIT (A) DELETED THE PENALTY B Y OBSERVING AS UNDER :- I HAVE GONE THROUGH THE SUBMISSION OF THE APPELLA NT AND FINDING OF THE AO IN THE PENALTY ORDER. THE PENALTY HAS BEEN L EVIED U/S 271AAA OF THE I.T. ACT. IN THIS REGARD, LD. AR OF THE APPELLA NT HAS AGITATED THE ACTION OF AO BY PRODUCING THE DETAILS OF THE ORDER U/S 133 A (3) (IA) OF THE I.T. ACT AS PER WHICH THERE IS ONE IMPOUNDING ORDER IN P URSUANCE TO SURVEY CONDUCTED U/S 133 A OF THE I.T. ACT DATED 15 TH JUNE, 2011. IN THIS REGARD, HE HAS FURTHER RELIED ON THE PROVISION OF SECTION 2 71AAA AS PER WHICH THIS PENALTY IS LEVIED IN THE CASE WHEREIN THERE IS SEAR CH HAS BEEN CONDUCTED U/S 132 OF THE I.T. ACT. I HAVE GONE THROUGH THE PROVIS ION OF SECTION 271 AAA WHICH READS AS UNDER:- THE AO MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007 [BUT BEFORE THE 1 ST DAY OF JULY, 2012], THE ASSESSEE SHALL PAY BY WAY O F PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YE AR.' FROM THE READING OF THE ABOVE SECTION, IT IS APPARE NT THAT PROVISION OF SECTION 271 AAA CAN BE ATTRACTED WHEREIN SEARCH ACTION HAS BEEN CONDUCTED U/S 132 OF THE I.T. ACT. IN THE INSTANT C ASE, THERE WAS SURVEY U/S 133A OF THE I.T. ACT AS IS EVIDENT FROM ORDER U/S 1 33A (3)(IA) OF THE I.T. ACT DATED 15TH JUNE, 2011. IN VIEW OF THE ABOVE DIS CUSSION, MY FINDINGS ARE AS UNDER:- (I) I FOUND FORCE IN THIS ARGUMENT OF THE LD AR O F APPELLANT. IT IS NOT THE CASE OF THE AO THAT IN THE CASE OF APPEL LANT, SEARCH U/S 132 WAS EVER INITIATED. (II) IT IS A TRITE LAW THAT THE PROVISIONS OF SEC TION 271 AAA ARE APPLICABLE ONLY WHERE SEARCH U/S 132 WAS CONDUCTED. (III) THE CASE LAWS RELIED UPON BY THE AO HAVE NO APPLICABILITY IN THE INSTANT CASE BECAUSE THE SAME WERE REGARDING PENALTY U/S 271 (1) (C). (IV) I AM OF THE CONSIDERED OPINION THAT THE PENA LTY LEVIED BY THE AO CANNOT BE CONFIRMED. I, THEREFORE, DELETE TH E PENALTY OF RS. 12,50,000/- LEVIED U/S 271 AAA. IN VIEW OF THE ABOVE DISCUSSION, GROUND 1, 2 & 3 O F THE APPEAL DESERVES TO BE ALLOWED. IN THE RESULT, APPEAL IS ALLOWED. ITA NO.1257/DEL./2015 4 6. LD. DR, RELYING ON THE ORDER OF THE AO , PLEADED THAT THE ORDER OF THE LD. CIT (A) BE SET ASIDE AND THAT OF THE AO BE REST ORED. 7. ON THE OTHER HAND, THE LD. AR FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT (A) AND SUBMITT ED THAT IN THE CASE OF ASSESSEE, THERE WAS NO SEARCH U/S 132 OF THE ACT, H OWEVER, THE PENALTY PROCEEDINGS WAS INITIATED U/S 271AAA OF THE ACT AND THE AO LEVIED PENALTY OF RS.12,50,000/-. IN THIS REGARD, LD AR SUBMITTED THAT SUCH LEVY OF PENALTY IS UNSUSTAINABLE IN LAW IN VIEW OF THE PROVISIONS OF S ECTION 271AAA OF THE ACT. FURTHER, LD AR BROUGHT OUR ATTENTION TO THE LANGUAG E OF THE SAID SECTION 271AAA OF THE ACT AND READ OUT THAT 'THE ASSESSING OFFICER MAY.DIRECT THAT; IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007 [BUT BEFORE THE 1 ST DAY OF JULY, 2012]. . HE, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT (A) BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD AS WELL AS THE PROVISION OF SECTION 271AAA OF THE ACT. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE OFFERED THE DISCLOSED IN COME AND PAID TAXES. THAT ISSUE ON QUANTUM REACHED THE FINALITY. WHEN COMES T O THE PENALTY PROCEEDINGS, WE FIND THAT THE AO INITIATED THE PENA LTY PROCEEDINGS U/S 271AAA OF THE ACT WHEN THE PRESENT ASSESSEE IS NOT COVERED U/S 132 I.E. SEARCH CONDUCTED ON THE ASSESSEE. THE ASSESSEE IS C OVERED ONLY BY SURVEY U/S 133A OF THE ACT AS SUCH INITIATION OF PENALTY PROCE EDING U/S 271AAA IS NOT ITA NO.1257/DEL./2015 5 LEGALLY TENABLE SO AO ERRED INITIATING ACTION UNDER SECTION 271AAA OF THE ACT. FURTHER, ON PERUSAL OF THE ORDER OF THE CIT (A ), WE FIND THAT THE FINDING OF THE LD. CIT (A) IN THIS REGARD IS LEGALLY RIGHT AND SO UPHELD. THEREFORE, THE IMPUGNED ORDER DOES NOT CALL FOR ANY INTERFERENCE A ND SO UPHELD. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 5 TH DAY OF FEBRUARY, 2016. SD/- SD/- (N.K. SAINI) (A.T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 5 TH DAY OF FEBRUARY, 2016 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-25, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.