ACIT, CC-XXIV, KOLKATA, Kolkata V. M/s Kailash Courier Pvt. Ltd., Kolkata

ITA 1519/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83221 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 19-10-2012
• Court: TRIBUNAL
• Department Lawyers: D BANERJEE
• Assessee Lawyers: SUBASH AGARWAL ADVOCTAE
• Keywords: Search and seizure
• Section: 133A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B , KOLKATA [BEFORE HON BLE SRI MAHAVIR SINGH, JM& HON BLE SRI SHAMIM YAHYA , A M ] ITA NO.1519 /KOL/2012 ASSESSMENT YEAR : 2009 - 10 ( A PPELLANT ) (RESPONDENT) A.C.I.T., CENTRAL CIRCLE - XXIV, - VS - M/S.KAILASH COURIER (P)LTD., KOLKATA KOLKATA (PAN: AACCK 5248 F) FOR THE APPELLAN T SHRI D.BANERJEE, JCIT FOR THE RESPONDENT SRI SUBASH AGARWAL, ADVOCTAE DATE OF HEARING : 12 .12.2014 DATE O F PRONOUNCEMENT : 1 6/12/2014. ORDER PER SHRI SHAMIM YAHYA, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF L D. C.I.T - (A) - CENTRAL - III , KOLKATA DT. 19 .07 .2012 AND PERTAIN S TO ASSESSMENT YEAR 2009 - 10. 2. THE ISSUE RAISED IN THIS APPEAL IS THAT THE LD . CIT(A) ERRED IN DELETING THE LEVY OF PENALTY U/S 271(1)(C) OF THE I.T.ACT. 3. THE BRIEF FACTS OF THIS CASE ARE AS UNDER : - BRIEFLY STATED, THE FACTS LEADING TO IMPOSITION OF PENALTY ARE THAT THERE WAS A SEARCH AND SEIZURE ACTION CARRIED OUT IN THIS CAS E ON 05.08.2008 ON RECEIPT OF INFORMATION FROM DIRECTORATE OF REVENUE INTELLIGENCE, MUMBAI THAT SOME CASH WAS FOUND BY THEM AT THE MUMBAI OFFICE OF THE ASSESSEE COMPANY. SEARCH WAS CONDUCTED AT THE ASSESSEE S MUMBAI OFFICE AND SURVEY U/S 133A WAS CONDUCTED AT ITS KOLKATA OFFICE AND HEAD OFFICE AT CHENNAI ON 06.08.2008. AT MUMBAI OFFICE CASH OF RS.47,40,000/ - WAS FOUND OUT OF WHICH CASH OF RS.47,00,000/ - WAS SEIZED. AT HYDERABAD PREMISES OF THE ASSESSEE A SUM OF RS.9,00,000/ - WAS ALSO FOUND. IN HIS RETURN OF INCOME FOR THE YEAR UNDER APPEAL, FILED SUBSEQUENT TO THE SEARCH, THE ASSESSEE DECLARED A TAXABLE INCOME ITA.NO.1519 /K/2012 M/S.KAILASH COURIER PVT.LTD., A.YR. 2009 - 10 2 OF RS.56,53,450/ - INCLUDING THE SUM OF RS.47,00,000/ - SEIZED FROM ITS MUMBAI OFFICE AND RS.9,00,000/ - FOUND AT ITS HYDERABAD OFFICE. THE ASSESSMENT W AS COMPLETED AT AN INCOME OF RS.56,80,300/ - . THE A.O. ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) IN RESPECT OF THE AMOUNT OF RS.56,00,000/ - , AS STATED IN THE IMPUGNED PENALTY ORDER. SUBSEQUENTLY, THE A.O. LEVIED PENALTY OF RS.28,55,160/ - U/S 271(1)(C ) BEING 150% OF THE AMOUNT SOUGHT TO BE EVADED HOLDING THAT THE DISCLOSURE OF THE INCOME OF RS.56,00,000/ - WAS NOT MADE VOLUNTARILY BY THE ASSESSEE COMPANY AND SUCH INCOME WOULD NOT HAVE BEEN DISCLOSED BY THE ASSESSEE IN THE ABSENCE OF A SEARCH. 4. BEFO RE THE LD. CIT(A) THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD OF ITS OWN DISCLOSED THE INCOME OF RS.56,00,000/ - IN ITS RETURN FILED FOR THE YEAR UNDER APPEAL. THEREFORE THERE WAS NO CONCEALMENT ON THE PART OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT TH E CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE PURVIEW OF EXPLANATION 5 OR EXPLANATION 5A OF SECTION 271(1)(C), THEREFORE, THE PENALTY HAS BEEN WRONGLY LEVIED. CONSIDERING THE ABOVE THE LD. CIT(A) OBSERVED THAT RECORD IN THIS CASE DOES NOT SUGGEST THAT AM OUNT OF RS,56,00,000/ - WHICH WAS FOUND AT THE TIME OF SEARCH IN THIS CASE WAS ACQUIRED BY THE ASSESSEE COMPANY UTILIZING ITS INCOME OR REPRESENTED ITS INCOME FOR ANY PREVIOUS YEAR WHICH HAD ENDED BEFORE THE TIME OF SEARCH. THE LD. CIT(A) OBSERVED THAT THE AO HAS ALSO NOT GIVEN ANY SUCH FINDING . HE FURTHER OBSERVED THAT EXPLANATION 5A ALSO DOES NOT APPLY THE FACTS OF THIS CASE. HENCE THE LD. CIT(A) HELD THAT PENALTY LEVIED U/S 271(1)(C) OF THE ACT WAS LIABLE TO BE DELETED. AGAINST THE ABOVE THE REVENUE IS IN APPEAL BEFORE US. 5. AT THE OUTSET IN THE CASE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN THIS CASE IS NOT SUSTAINABLE AS PENALTY IN THAT SECTION WAS NOT AT ALL LEVIABLE IN THIS CASE. FOR THIS HE REFERRED TO THE PROVISION OF SECTION 271AAA OF THE ACT WHICH READS AS UNDER : - 271AAA (1) THE ASSESSING OFFICER 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 O R AFTER THE 1 ST DAYS OF JUNE, 2007, THE ASSESSEE SHALL PAY BY WAY OF 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 YEAR. ITA.NO.1519 /K/2012 M/S.KAILASH COURIER PVT.LTD., A.YR. 2009 - 10 3 (2) NOTHING CONTAINED IN SUB - SECT ION (1) SHALL APPLY IF THE ASSESSEE, - (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB - SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED ; (II) SUBSTANTIATES THE MANNER IN WHIC H THE UNDISCLOSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF SUB - SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RE SPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB - SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. 5.1. REFERRING TO THE ABOVE THE LD. COUNSEL OF THE ASSESSEE POINTED OUT THAT SEARCH IN THIS CASE WAS CONDUCTED ON 05.8.2008. HE SUBMITTED THAT AS PER THE EXPLANATION TO SECTION 271AAA OF THE ACT THE CASE FALLS UNDER 271AAA OF THE ACT. HENCE HE SUBMITTED THAT THE PENALTY, IF ANY, WAS LIABLE ONLY U/S 271AAA OF THE IT ACT. REFERRING TO SUB - SECTION (3) OF THE ABOVE THE LD. COUNSEL OF THE ASSESSEE REITERATED THAT THIS CASE FALLS U/S 271AAA OF THE ACT AND NO PENALTY U/S 271(1)(C) OF THE ACT WAS LEVIABLE. IN THIS REGARD THE LD.COUNSEL OF THE ASSESSEE ALSO REFERRED TO THE D ECISION OF ITAT DELHI BENCH IN THE CASE OF CARIO INTERNATIONAL VS DCIT IN ITA NO.4439/DEL/2012 FOR A.YR.2008 - 09 . I N THIS CAS E VIDE ORDER DATED 11.10.2013, T HE TRIBUNAL HAD HELD THAT PENALTY IMPOSED BY THE AO U/S 271(1)(C) OF THE ACT AND CONVERTED BY THE LD. CIT(A) INTO SECTION 271AAA EVEN ON REDUCED AMOUNT CANNOT BE HELD TO BE PROPER OR LEGALLY JUSTIFIED. HENCE THE TRIBUNAL HAD DELETED THE LEVY OF PENALTY IN THAT C ASE U/S 271(1)(C) OF THE ACT AS REDUCED BY THE LD. CIT(A) U/S 271AAA OF THE ACT. HENCE THE L D. COUNSEL OF THE ASSESSEE PLEADED THAT PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN THIS CASE IS NOT AT ALL SUSTAINABLE. THE LD. DR COULD NOT REBUT THIS SPECIFIC SUBMISSION OF THE LD. COUNSEL OF THE ASSESSEE. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS AND RECORDS. IT IS APPARENT THAT SEARCH IN THIS CASE WAS CARRIED ON 05.08.2008 AND THE INCOME UPON WHICH PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN LEVIED IS UNDISCLOSED INCOME AS CLAIMED BY THE REVENUE ARISING OUT OF THE SAID SEARCH. AS PER THE MANDATE U/ S 271AAA OF THE ACT AFTER SEARCH INITIATED U/S 132 ON OR AFTER 1 ST JUNE, 2007 BUT BEFORE 1 ST JULY, 2012 PENALTY WAS LEVIABLE U/S 271AAA OF THE ACT. SUB - SECTION (3) OF 271AAA CLEARLY PROVIDES THAT IN ITA.NO.1519 /K/2012 M/S.KAILASH COURIER PVT.LTD., A.YR. 2009 - 10 4 SUCH CASE NO PENALTY U/S 271(1)(C) OF THE ACT CAN BE IMPO SED. IN THIS VIEW OF THE MATTER WE AGREE WITH THE LD.COUNSEL OF THE ASSESSEE THAT NO PENALTY U/S 271(1)(C) OF THE ACT WAS L EV IABLE, IN AS MUCH AS THE CASE COME S UNDER THE PURVIEW OF SECTION 271AAA OF THE ACT. THERE IS NO AMBIGUITY IN THIS REGARD, AND THE V IEW IS ALSO SUPPORTED BY THE TRIBUNAL DECISION IN THE CASE OF CARIO INTERNATIONAL (SUPRA). ACCORD INGLY WITHOUT ADVERTING TO THE P LANK ON WHICH THE L D. CIT(A) DELETED THE PENALTY, W E HOLD THAT THE ASSESSEE IN THIS CASE CANNOT BE VISITED FOR THE PENALTY U/S 271(1)(C) OF THE ACT IN AS MUCH AS THE CASE FALLS UNDER 271AAA OF THE ACT. ACCORDINGLY WE UPHOLD THE DELETION OF PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. O RDER PRONOUNCE D IN THE COURT ON 1 6/12/2014. SD/ - SD/ - [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE : 16/12/2014. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . M/S.KAILASH COURIER PVT.LTD., 9, CLIVE ROW, KOLKATA - 700001. 2 A.C.I.T., CENTRAL CIRCLE - XXIV, KOLKATA. 3 . CIT(A) - CENTRAL - III, KOL KATA 4. CIT - KOLKATA CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, ASST. REGISTRAR , ITAT, KOLKATA BENCHES