Shri Sureshkumar Jethalal Shah, Godhra V. The ACIT, Central Circle-I, Baroda

ITA 2228/AHD/2014

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3741 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-11-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 04-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Section: 271(1)(c); 274; 27; 132; 139

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NOS. 2228/AHD/2014 ( ASSESSMENT YEAR : 2011-12) SHRI SURESHKUMAR JETHALAL SHAH GIRIRAJ SOCIETY, NR. B. B. GANDHI PETROL PUMP, GODHRA DAHOD ROAD, GODHRA - 389001 / VS. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1, AAYAKAR BHAWAN, RACE COURSE CIRCLE, VADODARA ./ ./ PAN/GIR NO. : AIPPS8732E ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BANDISH SOPARKAR, A.RS. / RESPONDENT BY: SHRI L. P. JAIN, SR. D.R. DATE OF HEARING 21/11/2019 !'# / DATE OF PRONOUNCEMENT 28/11/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX(APPEALS)-IV, AHMEDABAD (CIT' IN SHORT), DATED 06.06.2014 ARISING IN THE PENALTY ORDER DATED 27.09.2013 PASSE D BY THE ASSESSING OFFICER (AO) UNDER S. 271(1)(C) OF THE INCOME TAX A CT, 1961 (THE ACT) CONCERNING AY 2011-12. ITA NO. 2228/AHD/2014 (SHRI SURESHKUMAR J. SHAH) AY 2011-12 - 2 - 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA D AS UNDER: 1. THE LEARNED COMMISSIONER OF THE INCOME TAX (APPE AL) -IV, AHMEDABAD ['THE CTT(A)'] ERRED IN FACT AND IN LAW I N CONFIRMING THE ACTION OF ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, BARODA ('THE AO') IN LEVYING PENALTY OF RS. 9,57,900 /- ON ACCOUNT OF UNDISCLOSED INCOME U/ S. 271(1)(C) OF THE INCOME TAX ACT, 1961 ('THE ACT'). 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN R EJECTING THE CONTENTION OF THE APPELLANT THAT NO PENALTY U/S. 27 1(1)(C) CAN BE LEVIED AS THE ASSESSMENT YEAR UNDER CONSIDERATIO N IS 'SPECIFIED PREVIOUS YEAR' AND THE PENALTY FOR 'SPEC IFIED PREVIOUS YEAR' WOULD BE GOVERNED BY SECTION 271AAA OF THE ACT AND NOT BY SECTION 271(1)(C). 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE SUBMITTED THAT A SEARCH ACTION UNDER S.132 OF THE ACT WAS CONDUCTED IN R. K. CONSTRUCTION GROUP OF CASES INCL UDING ASSESSEE ON 09.04.2010. THE ASSESSEE FILED RETURN OF INCOME FO R AY 2011-12 UNDER S.153A OF THE ACT SHOWING TOTAL INCOME OF RS. 22,48,290/-. THE INCOME WAS ASSESSED AT RS.53,74,890/- AFTER PRIMARI LY MAKING ADDITIONS OF RS.31 LAKHS TOWARDS THE DIFFERENCE OF AMOUNT DISCLOSED IN THE COURSE OF SEARCH PROCEEDINGS NOT INCLUDED IN THE RETURN OF INCOME FILED ON WHICH PENALTY WAS IMPOSED AMOUNTING TO RS.9,57,900/-. IN THIS CONTEXT, THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT THE FINANCIAL YEAR RELEVANT TO AY 20 11-12 IS THE YEAR OF SEARCH AND THEREFORE INCOME DECLARED AND ASSESSED I N THE RETURN OF INCOME FOR AY 2011-12 WOULD ATTRACT THE PROVISIONS OF SECTION 271AAA/271AAB OF THE ACT, IF ANY AND PROVISIONS OF SECTION 271(1)(C) OF THE ACT HAS NO APPLICATION FOR THE ALL EGED CONCEALMENT ETC. IN THIS CONTEXT, THE LEARNED AR REFERRED TO AN D RELIED UPON THE DECISION OF THE CO-ORDINATE BENCH IN CASE OF M/S. SOMPURA MARBLE INDUSTRIES VS. DCIT ITA NOS. 1308 & 1728/AHD/2014 DATED 11.01.2018 . ITA NO. 2228/AHD/2014 (SHRI SURESHKUMAR J. SHAH) AY 2011-12 - 3 - 4. LEARNED DR FOR THE REVENUE, ON THE OTHER HAND, R ELIED UPON THE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. AS POINTED OUT, THE SEARCH HAS BEEN CONDUCTED IN THE INSTANT C ASE ON 09.04.2010 AND CONSEQUENTLY, THE PENALTY COULD POSSIBLY BE IMP OSED UNDER 271AAA OF THE ACT ALONE WHERE THE UNDISCLOSED INCO ME RELATES TO SPECIFIED PREVIOUS YEAR. THE SCHEME AND SECTION 271(1)(C) READ WITH EXPLANATION 5A THERETO HAS NO APPLICATION AS H ELD BY THE CO- ORDINATE BENCH IN SOMPURA MARBLES INDUSTRIES (SUPRA) . THE RELEVANT OPERATIVE PARA OF THE ORDER OF THE CO-ORDINATE BENC H IS REPRODUCED HEREUNDER: 8. THE UNDISPUTED FACT IS THAT THE SEARCH TOOK PLA CE O 21.04.2010 AND CONSIDERING THE DATE OF SEARCH LET US NOW CONSI DER THE PROVISIONS OF SECTION 271AAA OF THE ACT :- 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 UND ER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, [BUT BEFORE THE 1ST DAY OF JULY, 2012], THE ASSESSEE SHALL PAY BY WAY OF PENAL TY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT T HE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UN DER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME A ND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED 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) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESS EE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTIO N (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A ) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEW ELLERY ITA NO. 2228/AHD/2014 (SHRI SURESHKUMAR J. SHAH) AY 2011-12 - 4 - OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS (A ) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SE ARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN T HE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMM ISSIONER OR COMMISSIONER BEFORE THE DATE OF THE SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH N OT BEEN CONDUCTED; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS Y EAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) O F SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE TH E DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE R ETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 9. THE AFOREMENTIONED PROVISION IS APPLICABLE WHERE SEARCH HAS BEEN INITIATED AFTER 01.06.2007 BUT BEFORE 01.07.20 12. IN THE CASE IN HAND, THE SEARCH WAS CONDUCTED ON 21.04.201 0. THEREFORE, THE PROVISIONS OF SECTION 271AAA SQUAREL Y APPLY TO THE FACTS OF THE CASE IN HAND. THERE IS NO DISPUTE THAT THE ASSESSEE HAS PAID TAXES ON THE INCOME DISCLOSED AND THIS FACT HAS NOT BEEN CONTROVERTED ANYWHERE. 10. AT THIS JUNCTURE, IT WOULD BE PERTINENT TO MENT ION THAT IT IS NOT A CASE OF WRONG MENTION OF SECTION BUT A CASE OF LEVY ING PENALTY BY SPECIFICALLY INVOKING THE PROVISIONS OF SECTION 271 (1)(C) OF THE ACT. THEREFORE, THE FINDINGS OF THE LD. CIT(A) THAT PROVISIONS OF SECTION 292B APPLY ON THE FACTS OF THE CASE ARE ILL -FOUNDED AND DOES NOT HOLD ANY WATER. 11. IN OUR CONSIDERED OPINION AND THE UNDERSTANDING OF THE FACTS IN ISSUE QUA THE RELEVANT PROVISIONS OF THE ACT, THE A .O. GROSSLY ERRED IN INVOKING THE PROVISIONS OF SECTION 271(1)( C) OF THE ACT AND FURTHER ERRED IN LEVYING PENALTY UNDER THAT SEC TION. CONSIDERING THE DATE OF SEARCH AND THE RELEVANT PRO VISIONS OF SECTION 271AAA OF THE ACT, THE A.O. OUGHT TO HAVE P ROCEEDED BY INVOKING THE PROVISIONS OF SECTION 271AAA OF THE AC T FAILING WHICH THE PENALTY ORDER IS BAD IN LAW AND DESERVE T O BE QUASHED. 12. FOR THE SAKE OF THE COMPLETENESS OF ADJUDICATIO N, ON THE GIVEN FACTS OF THE CASE IN HAND, NO PENALTY IS LEVIABLE U /S 271AAA OF THE ACT AS THE ASSESSEE FULFILLS ALL THE MANDATORY CONDITION MENTIONED UNDER THE PROVISIONS OF SECTION 271AAA OF THE ACT FOR GETTING IMMUNITY FROM THE LEVY OF PENALTY UNDER THE SAID SECTION. ITA NO. 2228/AHD/2014 (SHRI SURESHKUMAR J. SHAH) AY 2011-12 - 5 - 13. CONSIDERING THE FACTS OF THE CASE IN TOTALITY, IN OUR CONSIDERED OPINION, PENALTY U/S. 271(1)(C) OF THE ACT CANNOT B E LEVIED AND ALSO PENALTY U/S. 271AAA OF THE ACT CANNOT BE LEVIE D. IN THE LIGHT OF THE DECISION OF THE CO-ORDINATE BEN CH, WE FIND MERIT IN THE PLEA OF THE ASSESSEE FOR WRONG IMPOSIT ION OF PENALTY. THE PENALTY IMPOSED UNDER S.271(1)(C) OF THE ACT IS THE REFORE LIABLE TO STRUCK DOWN. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMAR K EDIA) JUDICIAL MEMBER ACCOUNTANT ME MBER AHMEDABAD: DATED 28/11/2019 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 28/11/201 9