Sh. Harminder Singh Sodhi, Moga V. DCIT, Chandigarh

ITA 242/CHANDI/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8973 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 11-08-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: YOGESH MONGA
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 242 & 243/CHD/2016 A.YS: 2008-09 & 2009-10 SHRI HARMINDER SINGH SODHI, VS THE DCIT, NEAR PWD REST HOUSE, CENTRAL CIRCLE-1, MOGA. CHANDIGARH. PAN: AEHPS1830H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI YOGESH MONGA RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 30.11.2016 DATE OF PRONOUNCEMENT : 30.11.2016 O R D E R PER BHAVNESH SAINI, JM BOTH THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS)-3, GURGAON DAT ED 25.01.2016 FOR ASSESSMENT YEARS 2008-09 AND 2009-10 CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1 )(C) OF INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME TAX ACT WAS CONDUCTED AT THE 2 RESIDENTIAL PREMISES OF SHRI P.L.MIDHA, HOUSE NO. 3 049 SECTOR 21-D, CHANDIGARH ON 17.09.2008 BY INVESTIGAT ION WING. THE JURISDICTION OVER THE CASE OF THE ASSESS EE WAS TRANSFERRED TO DCIT-I CIRCLE-I CHANDIGARH BY CIT-I CHANDIGARH DATED 10.12.2008 UNDER SECTION 127 OF TH E INCOME TAX ACT. THE ASSESSING OFFICER IN BOTH THE ASSESSMENT YEARS REFERRED TO CERTAIN INCRIMINATING MATERIAL AND PASSED THE ORDERS UNDER SECTION 153C, 153A READ WITH SECTION 143(3) OF THE INCOME TAX ACT AGAINST THE ASSESSEE VIDE ORDERS DATED 31.12.2010 A ND MADE CERTAIN ADDITIONS WHICH ARE THE BASIS OF LEVY OF PENALTY. 3. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET SUBMITTED THAT THE ASSESSEE PREFERRED APPEALS BEFOR E ITAT, DIVISION BENCH, CHANDIGARH IN BOTH THE ASSESSMENT YEARS 2008-09 AND 2009-10 ON QUANTUM IN ITA 206 & 207 OF 2013 AND APPEALS OF THE ASSESSEE H AVE BEEN DECIDED VIDE ORDER DATED 22.08.2016, COPY OF T HE ORDER IS PLACED ON RECORD AND GIVEN TO LD. DR. HE HAS SUBMITTED THAT THE TRIBUNAL QUASHED THE PROCEEDINGS UNDER SECTION 153C OF THE INCOME TAX ACT AND RESULTANTLY, DELETED ALL THE ADDITIONS. THE FINDIN GS OF THE TRIBUNAL IN PARA 10 OF THE ORDER ARE REPRODUCED AS UNDER : 10. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF ORDER IN THE CASE OF SHRI PAWAN MANGLA (SUPRA), IT IS CLEAR THAT THE SEARCH WAS 3 CONDUCTED IN THE CASE OF SHRI P.L.MIDHA IN WHICH CERTAIN DOCUMENTS I.E. AGREEMENT TO SELL DATED 01.03.2008 AND MOU DATED 09.07.2008 WERE RECOVERED. THIS AGREEMENT TO SELL AND MOU ARE ALLEGED TO HAVE BELONG TO THE ASSESSEE. THEREFORE, ASSESSING OFFICER OF THE PERSON SEARCHED I.E. SHRI P.L.MIDHA SHALL HAVE TO RECORD SATISFACTION THAT THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH BELONG TO THE ASSESSEE AND SUCH DOCUMENT SHALL HAVE TO BE HANDED OVER TO THE ASSESSING OFFICER OF THE ASSESSEE. HOWEVER, IN THIS CASE, NO SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER OF THE PERSON SEARCHED I.E. SHRI P.L.MIDHA, THEREFORE, THERE IS NO QUESTION OF HANDING OVER THE DOCUMENT BY THE ASSESSING OFFICER OF SHRI P.L.MIDHA TO THE ASSESSING OFFICER OF THE ASSESSEE. IN RTI REPLY, REVENUE DEPARTMENT HAS SUPPLIED COPY OF THE SATISFACTION NOTE RECORDED UNDER SECTION 153C IN THE CASE OF THE ASSESSEE DATED 26.08.2010. THEREFORE, THERE IS A CLEAR VIOLATION OF PROVISIONS OF SECTION 153C OF THE ACT. IT IS ADMITTED FACT THAT NO SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE AND ASSESSMENTS HAVE BEEN FRAMED ON THE BASIS OF NOTICE ISSUED UNDER SECTION 153C OF THE ACT IN THE CASE OF THE ASSESSEE. IN THE PRESENT CASE, NO SATISFACTION RECORDED UNDER SECTION 153C OF THE ACT IN THE CASE OF THE PERSON SEARCHED I.E. SHRI P.L.MIDHA, THERE IS TOTAL NON-COMPLIANCE OF PROVISIONS OF SECTION 153C OF THE ACT. THEREFORE, THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEE HAS NOT VALIDLY ASSUMED THE JURISDICTION UNDER SECTION 153C OF THE ACT. THEREFORE, CONSIDERING TOTALITY OF FACTS AND CIRCUMSTANCES AND POSITION 4 OF LAW, AS EXPLAINED IN THE CASE OF SHRI PAWAN MANGLA (SUPRA), WE HOLD THAT THE JURISDICTION ASSUMED UNDER SECTION 153C OF THE ACT WAS LACKING IN THE INSTANT CASES AND THEREFORE, THE NOTICES ISSUED UNDER SECTION 153C OF THE ACT ARE HELD NOT IN ACCORDANCE WITH LAW AND ASSESSMENTS MADE UNDER SECTION 153C ARE QUASHED. THE ORDERS OF AUTHORITIES BELOW ARE, ACCORDINGLY, SET ASIDE AND QUASHED. RESULTANTLY, ALL ADDITIONS MADE IN ASSESSMENT ORDERS UNDER SECTION 153C R.W.S. 143(3) ARE DELETED. IN VIEW OF THESE FINDINGS THAT ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE ACT ITSELF IS BAD IN LAW, THE ISSUES OF ADDITIONS ARE LEFT FOR ACADEMIC DISCUSSION ONLY. THE APPEALS OF THE ASSESSEE ARE, THEREFORE, ALLOWED. 4. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT SINCE QUANTUM ADDITION HAVE BEEN DELETED BY QUASHING THE ASSESSMENT ORDERS, THEREFOR E, PENALTY MAY BE DELETED. THE LD. DR ALSO SUBMITTED THAT SINCE ASSESSMENT ORDERS HAVE BEEN QUASHED, THEREFOR E, NO PENALTY IS LEVIABLE. 5. IN THIS VIEW OF THE MATTER, WE ARE OF THE VIEW T HAT SINCE QUANTUM ADDITIONS HAVE ALREADY BEEN DELETED B Y QUASHING THE ASSESSMENT ORDERS UNDER SECTION 153C O F THE INCOME TAX ACT IN THE CASE OF THE ASSESSEE, BY ITAT CHANDIGARH BENCH VIDE ORDER DATED 22.08.2016 (SUPRA ), THEREFORE, PENALTY COULD NOT BE LEVIED AGAINST THE ASSESSEE. SINCE QUANTUM ADDITION DOES NOT SURVIVE, 5 THEREFORE, THERE IS NO JUSTIFICATION TO LEVY THE PE NALTY. WE, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIE S BELOW AND CANCEL THE PENALTY UNDER SECTION 271(1)(C ) OF THE ACT IN BOTH THE YEARS. 6. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) ( BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30 TH NOVEMBER,2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD