Sri Suresh H Kerudi, Bagalkot V. The Income Tax Officer, Ward- 1, Bagalkot

ITA 2295/BANG/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2600 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-11-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 01-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Section: 132

Judgement Text

ITA NO.2295/BANG/2019 SRI SURESH H KERUDI, BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL CBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENTAND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.2295/BANG/2019 ASSESSMENT YEAR:2013-14 SRI SURESH H KERUDI NEAR LIONS SCHOOL EXTENSION AREA, WARD NO.10 BAGALKOT-587 105 KARNATAKA PAN NO :ANXPK7519G VS. ITO WARD-1 BAGALKOT APPELLANT RESPONDENT APPELLANT BY : SHRI PRANAV KRISHNA, A.R. RESPONDENT BY : SMT. R. PREMI, D.R. DATE OF HEARING : 26.11.2020 DATE OF PRONOUNCEMENT : 26.11.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 28.8.2019 PASSED BY LD. CIT(A) BELGAUM FOR ASSESSME NT YEAR 2013- 14 CONFIRMING THE PENALTY OF RS.3,80,000/- LEVIED B Y THE A.O. U/S 271AAB OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR SH ORT]. 2. THE LD. A.R. SUBMITTED THAT AN IDENTICAL ISSUE W AS CONSIDERED IN THE ASSESSEES OWN CASE IN ITA NOS.2950 TO 2955/ BANG/2018 RELATING TO ASSESSMENT YEARS 2007-08 TO 2012-13. T HE COORDINATE BENCH HAS PASSED THE ORDER ON 25.10.2019 HOLDING TH AT THE PROVISIONS OF SECTION 271AAB OF THE ACT COULD NOT B E INVOKED IN THE ITA NO.2295/BANG/2019 SRI SURESH H KERUDI, BANGALORE PAGE 2 OF 4 HANDS OF THE ASSESSEE, SINCE THE ASSESSEE WAS NOT A PERSON WHO WAS SUBJECTED TO SEARCH. THE LD. A.R. SUBMITTED TH AT THE RATIO OF ABOVE SAID DECISION WOULD SQUARELY APPLY TO THE INS TANT YEAR ALSO. 3. WE HEARD LD. D.R. AND PERUSED THE RECORD. WE NOTICE THAT THE PENALTY U/S 271AAB OF THE ACT WAS LEVIED UPON THE A SSESSEE FOR ASSESSMENT YEARS 2007-08 TO 2012-13 ALSO. THE COOR DINATE BENCH IN THE ASSESSEES OWN CASE REFERRED (SUPRA) HAS DEL ETED THE PENALTY WITH FOLLOWING OBSERVATIONS: 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AN IDENTICAL PLEA WAS PUT FORTH BY THE ASSESSEE IN THE CASE OF SHREEJI CORPORATION (SUPRA) AND THE AHMEDABAD BENCH OF THE TRIBUNAL IN ITS ORDER ACCEPTED THE STAND AND HELD AS FOLLOWS:- '5. A PERUSAL OF THE ASSESSMENT ORDER UNDISPUTEDLY POIN TS OUT THAT NO SEARCH HAD TAKEN PLACE IN THE CASE OF T HE ASSESSEE PER SE UNDER S.132 OF THE ACT. A BARE READ ING OF LAW CODIFIED IN SECTION 271AAB(1) CLEARLY PROVIDES THAT THE AO MAY DIRECT THE ASSESSEE TO PAY A SUM BY WAY OF P ENALTY AT SPECIFIED PERCENTAGE WHERE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR HAS BEEN DETECTED AS A RESU LT OF SEARCH UNDER S.132 'OF THE ACT. SECTION 271AAB(1)(A ) HOWEVER SIMULTANEOUSLY PROVIDES CONCESSIONAL TREATM ENT IN THE MATTER OF PENALTY UNDER S.271AAB WHERE THE ASSE SSEE ADMITS THE UNDISCLOSED INCOME IN A STATEMENT UNDER SUB- SECTION 4 OF SECTION 132 OF THE ACT SUBJECT TO FULF ILLMENT OF OTHER CONDITIONS WITH WHICH WE ARE PRESENTLY NOT CO NCERNED WITH. THEREFORE, IT IS MANIFEST THAT APPLICABILITY OF SECTION 271AAB IS INTEGRALLY CONNECTED TO SEARCH UNDER S.13 2 OF THE ACT. IN THE ABSENCE OF SEARCH UNDER S. 132 OF T HE ACT, THE ASSESSEE HAS NO OCCASION TO AVAIL THE CONCESSIO NAL TREATMENT BY WAY OF ADMISSION UNDER S.132(4) OF THE ACT. THUS, WE FIND OBVIOUS MERITS IN THE OBSERVATIONS MA DE BY THE FIRST APPELLATE AUTHORITY THAT PROVISIONS OF SE CTION 271AAB OF THE ACT ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE. IN THE ABSENCE OF SEARCH UNDER S.132 OF T HE ACT, THE CONSEQUENTIAL OR INCIDENTAL ASSESSMENT PROCEEDI NGS UNDER S.153C OF THE ACT WILL NOT, IN OUR VIEW, ENTI TLE THE AO TO USURP JURISDICTION UNDER S.2.71AAB OF THE ACT FO R THE ITA NO.2295/BANG/2019 SRI SURESH H KERUDI, BANGALORE PAGE 3 OF 4 PURPOSES OF IMPOSITION OF PENALTY. HENCE, WE DO NOT SEE ANY INFIRMITY IN THE CONCLUSION DRAWN BY THE CIT(A).' 11. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF V OLGA DRESSES(SUPRA) HAS ALSO TAKEN A SIMILAR VIEW:- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSA L OF THE PROVISIONS OF SECTION 271AAB SHOWS THAT THE OPENING WORDS ARE 'PENALTY WHERE SEARCH HAS BEEN INITIATED' A PERUSAL OF THE PROVISIONS UNDER SECTION 271 AAB ALS O TALKS ELF THE ASSESSEE DECLARING ANY UNDISCLOSED INCOME I N THE COURSE OF THE SEARCH IN THE STATEMENT UNDER SECTION 132(4). ADMITTEDLY IN THE PRESENT CASE, THAT IS IN THE CASE OF THE ASSESSEE FIRM IN APPEAL THERE HAS BEEN NO SEARCH. S EARCH ADMITTEDLY IS ON THE RESIDENCE OF ONE OF THE PARTNE R OF THE ASSESSEE FIRM. FURTHER A PERUSAL OF THE ORDER OF TH E LEARNED CIT(A) ALSO CLEARLY SHOWS THAT THE LEARNED CIT(A) H AS CANCELLED THE PENALTY ON THE GROUND THAT THERE WAS NO SEARCH IN THE CASE OF THE ASSESSEE FIRM. THE REVENUE HAS NOT BEEN ABLE TO POINT OUT AS TO HOW THIS FINDING OF THE LEARNED CIT(A) IS ERR ONEOUS. THIS BEING SO THE FINDING OF THE LEARNED CIT(A) ON THIS ISSUE STANDS CONFIRMED.' 12. IN VIEW OF THE AFORESAID DECISION OF COORDINATE BEN CHES, WE ARE OF THE VIEW THAT THE PENALTY IN THE CASE OF ASS ESSEE CANNOT BE SUSTAINED AS THE ASSESSEE WAS NOT A PERSON WHO WAS SUBJECTED TO SEARCH U/S. 132 OF THE ACT AND CONSEQUENTLY THE PRO VISIONS OF SECTION 271AAB COULD NOT BE INVOKED IN HIS CASE. 4. SINCE THE FACTS ARE IDENTICAL IN THE INSTANT YEA R, FOLLOWING THE ABOVE SAID DECISION OF THE COORDINATE BENCH, WE HOL D THAT THE PENALTY IN THE CASE OF THE ASSESSEE CANNOT BE SUSTA INED AS THE ASSESSEE WAS NOT A PERSON WHO WAS SUBJECTED TO SEAR CH U/S 132 OF THE ACT AND CONSEQUENTLY THE PROVISIONS OF SECTION 271AAB OF THE ACT COULD NOT BE INVOKED IN THIS CASE. ACCORDINGLY , WE QUASH THE ORDER PASSED BY TAX AUTHORITIES. ITA NO.2295/BANG/2019 SRI SURESH H KERUDI, BANGALORE PAGE 4 OF 4 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOV, 2020. SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 26 TH NOV, 2020. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.