Shri M Prabhakar, Hyderabad V. ITO, Ward-6(4), Hyderabad

ITA 1713/HYD/2012

• Counselvise Citation: 171322514 RSA 2012
• Duration Of Justice: 2 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 23-11-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITRA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1713/HYD/2014 ASSESSMENT YEAR: 2008-09 S. YELLAIAH, HYDERABAD. PAN AGQPS 2236 Q VS. ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 5, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : SHRI RAJAT MITRA DATE OF HEARING : 16-07-2015 DATE OF PRONOUNCEMENT : 22-07-2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER DATED 22/09/2014 OF LD. CIT(A) I, HYDERABAD DISMISSING ASSESSEES APPEAL AGAINST INITIATION OF PENALTY PROCEEDING U/S 271(1) (C) OF THE ACT, FOR THE AY 2008-09. 2. BRIEFLY THE FACTS ARE, ASSESSEE IS AN INDIVIDUAL . AS OBSERVED BY AO, ASSESSEE IS ENGAGED IN REAL ESTATE BUSINESS ALO NG WITH FIVE OTHER PARTNERS. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED IN CASE OF SHRI M. SAMBASIVA RAO AND OTHE RS INCLUDING ASSESSEE. IN PURSUANCE TO THE SEARCH AND SEIZURE OP ERATION, A NOTICE U/S 153A OF THE ACT WAS ISSUED TO ASSESSEE. IN RESP ONSE TO THE SAID NOTICE, ASSESSEE FILED RETURN OF INCOME DECLARING I NCOME OF RS. 34,20,000 IN TERMS WITH THE ADMISSION MADE DURING T HE SEARCH AND SEIZURE OPERATION. AO COMPLETED THE ASSESSMENT VIDE ORDER DATED 2 ITA NO. 1713 /HYD/2014 S. YELLAIAH 31/12/2010 ACCEPTING THE INCOME DECLARED. HOWEVER, WHILE DOING SO, HE ALSO INITIATED PROCEEDING FOR IMPOSITION OF PENA LTY U/S 271(1)(C) OF THE ACT. AS IT APPEARS, BEING AGGRIEVED WITH THE IN ITIATION OF PENALTY PROCEEDING U/S 271(1)(C) BY AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). 3. LD. CIT(A) AFTER EXAMINING THE MATERIAL ON RECOR D FOUND THAT AO HAS ONLY INITIATED PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT IN THE ASSESSMENT ORDER, AGAINST WHICH ASSESSEE HAS PREFER RED APPEAL. NO ORDER IMPOSING PENALTY HAS BEEN PASSED BY AO. SHE, THEREFORE, OBSERVING THAT GROUNDS RAISED BY ASSESSEE ARE PREMA TURE DISMISSED THE APPEAL AS INFRUCTUOUS. BEING AGGRIEVED, ASSESSE E HAS FILED THE PRESENT APPEAL. 4. HAVING CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE DO NOT FIND ANY REASON T O INTERFERE WITH THE ORDER OF LD. CIT(A). IT IS APPARENT FROM RECORD THA T AO HAS ONLY INITIATED PROCEEDING FOR IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT WHILE COMPLETING THE ASSESSMENT VIDE ORDER DATED 31 /12/2010. TILL DATE, AO HAS NOT EVEN ISSUED THE MANDATORY SHOW CAU SE NOTICE TO ASSESSEE SEEKING HIS EXPLANATION AS TO WHY PENALTY U/S 271(1)(C) SHALL NOT BE IMPOSED. AT LEAST, NO SUCH NOTICE, IF AT ALL, ISSUED BY AO HAS BEEN BROUGHT TO OUR NOTICE. THAT BEING THE CASE , ASSESSEES APPEAL AGAINST INITIATION OF PENALTY PROCEEDING U/S 271(1)(C) OF THE ACT, IN OUR VIEW, IS NOT ONLY PREMATURE BUT IS ALSO NOT MAINTAINABLE UNTIL AND UNLESS AO IMPOSES PENALTY U/S 271(1)(C). THIS IS BECAUSE AO EVEN THOUGH HAS INITIATED PROCEEDING FOR IMPOSIT ION OF PENALTY U/S 271(1)(C), HE MAY AS WELL DROP THE PROCEEDING INITI ATED, IF HE IS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. IN THE AFORESAID FACTS AND CIRCUMSTANCES, WE UPHOLD THE ORDER OF LD. CIT(A ) BY DISMISSING GROUND RAISED. 3 ITA NO. 1713 /HYD/2014 S. YELLAIAH 5. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 22 ND JULY, 2015. SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 22 ND JULY, 2015 KV COPY TO:- 1) SHRI S. YELLAIAH, C/O P. MURALI & CO., CAS., 6-3 -655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 500 082 2) ACIT, CENTRAL CIRCLE 5, HYDERABAD. 3) CIT(A) I, HYDERABAD 4) CIT(CENTRAL), HYDERABAD 4) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.