Sri Ashok B Soreban , Hubli V. Assistant Commissioner of Income Tax Circle-3(1), Hubli

ITA 2791/BANG/2017

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7875 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-07-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 20-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Invalid notice; Principle of natural justice; Set aside
• Section: 271(1)(c); 143(3); 153A; 250; 274; 13; 153; 153C; 27; 132; 2; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI , JUDICIAL MEMBER IT A NO S . 2791 & 2792/BANG/2017 ASSESSMENT YEAR S : 2012 - 13 & 2013 - 14 SHRI ASHOK B SUREBAN, SHRINGAR TALKIES COMPLEX, STATION ROAD, HUBLI. PAN: AOOPS 8628A VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3(1), HUBLI. APPELLANT RESPONDENT APPELLANT BY : S HRI S.V. RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI PRIYADARSHI MISHRA, ADDL .C IT(DR) (ITAT ), BENGALURU. DATE OF HEARING : 19 .0 1 .202 1 DATE OF PRONOUNCEMENT : 19 .0 1 .202 1 O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST THE ORDERS DATED 3.10.2017 AND 3.7.2017 OF THE CIT(APPEALS), H UBLI FOR THE ASSESSMENT YEARS 2012-13 & 2013-14 RESPECTIVELY. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX(APPEALS) PASSED UNDER SECTION 250 OF THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE APPEL LANT'S CASE. 2. THE APPELLANT DENIES HIMSELF TO BE LIABLE TO A P ENALTY OF RS.6,06,360/- (AY 2012-13) & RS.22,94000/- (AY 2013 -14) ITA NOS. 2791 & 2792/BANG/2017 PAGE 2 OF 11 UNDER SECTION 271AAB OF THE ACT, ON THE FACTS AND C IRCUMSTANCES OF THE CASE. 3. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN LAW IN APPRECIATING THAT THE NOTICE OF PENALTY OUGHT TO HA VE BEEN ISSUED UNDER SECTION 271(1)(C) OF THE ACT, SINCE THE ORDER OF ASSESSMENT HAS BEEN PASSED UNDER SECTION 143(3) R.W.S 153C OF THE ACT (AY 2012-13) UNDER SECTION 143(3) OF THE ACT (AY 2013-1 4), ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN APPRECIA TING THAT THE SEARCH WAS CONDUCTED IN THE CASE OF THE FIRM AN D NOT IN THE CASE OF THE INDIVIDUAL APPELLANT, AND HENCE THE PEN ALTY IF AT ALL LEVIED, OUGHT TO HAVE BEEN UNDER SECTION 271(1)(C) OF THE ACT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN LAW, IN APPRECIATING THAT THE NOTICE ISSUED UNDER SECTION 2 71AAB OF THE ACT, IS BAD IN LAW ON THE FACTS AND CIRCUMSTANCES O F THE CASE. 6. WITHOUT PREJUDICE AND NOT CONCEDING THAT THE PRO VISIONS OF SECTION 271AAB WERE NOT APPLICABLE TO THE FACTS OF THE CASE, THE LEARNED ASSESSING OFFICER IS EMPOWERED TO ISSUE NOT ICE UNDER SECTION 271AAB OF THE ACT FOR ONLY ONE YEAR AND THE NOTICES ISSUED FOR TWO YEARS IS AGAINST THE SCHEME OF THE A CT, WHICH RENDERS THE NOTICES FOR BOTH THE YEARS AS BEING WIT HOUT JURISDICTION ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN APPRECIA TING THAT THE PENALTY ORDER PASSED ON AN INVALID NOTICE IS BA D IN LAW AND THE ORDER OF PENALTY PASSED IS REQUIRED TO BE SET ASIDE AS BAD IN LAW ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. WITHOUT FURTHER PREJUDICE, THE NOTICE ISSUED UND ER SECTION 271AAB IS A BALD NOTICE AND THE AO HAS NOT SPECIFIC ALLY STATED AS TO WHICH PARTICULAR LIMB OF SECTION 271AAB, AND CON SEQUENTLY THE PRINCIPLES OF NATURAL JUSTICE IS OFFENDED AND T HE NOTICE IS BAD IN LAW AND THE ORDERS PASSED CONSEQUENT TO AN INVAL ID NOTICE IS FURTHER BAD IN LAW AND IS REQUIRED TO BE ANNULLED O N THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NOS. 2791 & 2792/BANG/2017 PAGE 3 OF 11 9. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN APPRECIA TING THAT THE NOTICE ISSUED UNDER SECTION 271AAB OF THE ACT, IS BAD IN LAW AS THE SAID NOTICE DOES NOT PUT THE APPELLANT TO NO TICE, AS TO THE CLAUSE, THE APPELLANT IS REQUIRED TO RESPOND TO, AN D HENCE THE CONSEQUENT ACTION TAKEN IS REQUIRED TO BE SET ASIDE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E PENALTY WAS NOT AUTOMATIC AND THAT THERE IS A DISCRETIONARY POWER WITH THE ASSESSING OFFICER NOT TO LEVY PENALTY AND THE ASSES SING OFFICER OUGHT TO HAVE EXERCISED THE DISCRETION IN THE PENAL TY PROCEEDINGS AND NOT TO BE RESORTED TO AS A ROUTINE MATTER OF PR OCEDURE, ON THE FACTS AND CIRCUMSTANCE OF THE CASE. 11. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH E FACT THAT THE INCOMES OFFERED IN THE REGULAR RETURN OF INCOME WAS NOT ON ACCOUNT OF UNDISCLOSED INCOME, RATHER WAS OFFERED T O BUY PEACE WITH THE DEPARTMENT AND THE PENALTY OUGHT NOT TO HA VE BEEN LEVIED, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 12. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E PROVISION OF SECTION 271AAB OF THE ACT IS NOT APPLICABLE AND FURTHER WITHOUT PREJUDICE THE CLAUSE (C) OF SECTION 271AAB (1) OF THE ACT IS NOT APPLICABLE, CONSEQUENTLY THE LEVY OF PENALTY AT 30% IS NOT IN ACCORDANCE WITH LAW ON THE FACTS AND CIRCUMSTANC ES OF THE CASE. 13. WITHOUT PREJUDICE, THE PENALTY LEVIED AT 30% UN DER SECTION 271AAB OF THE ACT IS ERRONEOUS AND THE PENALTY IS R EQUIRED TO BE CANCELLED ON THE FACTS AND CIRCUMSTANCES OF THE CAS E. 14. WITHOUT PREJUDICE THE PENALTY LEVIED IS HIGHLY EXCESSIVE AND IS TO BE REDUCED SUBSTANTIALLY REDUCED ON THE F ACTS AND CIRCUMSTANCES OF THE CASE. 15. THE LEARNED CIT(A) WAS NOT JUSTIFIED IN APPRECI ATING THAT THE ORDER OF PENALTY WAS BAD IN LAW, AS THE OFFICER PASSING THE ORDER HAS NOT ASSUMED PROPER JURISDICTION OVER THE CASE OF THE APPELLANT, ON THE FACTS AND CIRCUMSTANCES OF THE CA SE. 16. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBST ITUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED AB OVE. ITA NOS. 2791 & 2792/BANG/2017 PAGE 4 OF 11 17. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DUR ING THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 3. THE FACTS OF THE CASE ARE THAT FOR THESE TWO ASS ESSMENT YEARS, ASSESSMENT WAS COMPLETED U/S. 143(3) R.W.S. 153C OF THE INCOME-TAX ACT, 1961 [THE ACT]. LATER, THE AO LEVIED PENALTY U/S. 271AAB OF THE ACT ON ACCOUNT OF UNDISCLOSED INCOME DECLARED BY THE ASSES SEE DURING THE POST- SURVEY PROCEEDINGS ON 6.8.2015. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). THE CIT(APPEALS) CONFIRME D THE LEVY OF THE PENALTY U/S. 271AAB OF THE ACT. AGGRIEVED, THE ASS ESSEE IS IN APPEAL BEFORE US. 4. AT THE OUTSET THE LD.AR ARGUED REITERATING THE G ROUNDS OF APPEAL THAT REVENUE AUTHORITIES ARE NOT JUSTIFIED IN IMPOSING P ENALTY ON THE ASSESSEE U/S. 271AAB OF THE ACT SINCE THERE WAS NO SEARCH IN THE CASE OF ASSESSEE U/S. 132 OF THE ACT. HE SUBMITTED THAT IN THESE CA SES NO SEARCH TOOK PLACE IN THE ASSESSEES CASE AND ACTUAL SEARCH TOOK PLACE D IN THE CASE OF M/S VISHWA DEVELOPERS & BUILDERS, HUBLI U/S. 132 OF THE ACT ON 26.7.2012. CONSEQUENT TO THIS SEARCH ACTION, THE ASSESSEES CA SE IS COVERED U/S. 153C OF THE ACT AND ASSESSMENT ORDER WAS FRAMED IN THESE ASSESSMENT YEARS U/S. 143(3) R.W.S. 153C OF THE ACT. ACCORDI NG TO HIM, LEVY OF PENALTY COULD BE POSSIBLE ONLY IN THE HANDS, WHERE SEARCH T OOK PLACE U/S. 132 OF THE ACT, CONSEQUENT TO WHICH ASSESSMENT WAS FRAMED U/S. 153A OF THE ACT. SINCE IN THESE CASES, THERE WAS NO SEARCH U/S. 132 OF THE ACT, LEVY OF PENALTY U/S. 271AAB OF THE ACT IS NOT AT ALL JUSTIF IED. FOR THIS PURPOSE, HE RELIED ON THE ORDER OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI SURESH H. KERUDI IN ITA NOS.2950 TO 2955/BANG/ 2018, ORDER DATED 25.10.2019. ITA NOS. 2791 & 2792/BANG/2017 PAGE 5 OF 11 5. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE SE GROUNDS WERE NOT BEFORE THE CIT(APPEALS), AS SUCH FOR ADJUDICATION O F THE SAME, THE ISSUE MAY BE REMANDED BACK TO THE CIT(APPEALS) FOR HIS CO NSIDERATION. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, THERE WAS A GROUND RAISED BEFORE THE CI T(APPEALS) AS FOLLOWS:- ON THE BASIS OF AFOREMENTIONED STATEMENT OF FACTS AND REASONS, THE ASSESSEE PRAYS FOR AN APPEAL ON THE FOLLOWING G ROUNDS: 1. THAT THE PENALTY ORDER PASSED U/S 271AAB BY THE ACIT, CIRCLE 3(1), HUBLI ON THE BASIS OF ASSESSMENT ORDER PASSED U/S 153C BY THE ACIT (CENTRAL CIRCLE), BELAGUM IS B AD IN LAW (ON ACCOUNT OF REASONS FURNISHED IN SI. NO. 3 ( A) TO (D) ABOVE). 2. THAT THE PENALTY NOTICE INITIATED U/S 274 RWS 27 1AAB IS NOT PROPER AND HENCE THE SAME IS BAD IN LAW (ON ACCOUNT OF REASONS FURNISHED IN SI. NO. 3 (B) ABOVE). 3. THAT THE JURISDICTION OF PASSING THE PENALTY ORD ER U/S 271AAB IS NOT CORRECT AND HENCE THE SAME IS BAD IN LAW (ON ACCOUNT OF REASONS FURNISHED IN SL. NO. 4 (A) TO 4 (E) ABOVE). 4. NOTWITHSTANDING ANYTHING CONTAINED HEREIN ABOVE, THAT MERITS OF THE CASE ARE NOT CONSIDERED IN PASSING THE PENAL TY ORDER AND HENCE THE SAME IS BAD IN LAW (ON ACCOUNT OF REA SONS FURNISHED IN SL. NO. 5 ABOVE). 5. THAT THE ASSESSEE PRAYS FOR PERMITTING TO PRODUC E ANY OTHER DOCUMENTS, CLARIFICATIONS, CASE LAWS, ETC AT THE TI ME OF HEARING WITH THE KIND PERMISSION OF THE HON'BLE C.I .T. (APPEALS). ALSO PRAYS THAT THESE GROUNDS OF APPEAL MAY ALLOWED TO BE AMENDED OR MODIFIED WITH THE KIND PER MISSION OF THE HON'BLE C.I.T. (APPEALS). RELIEF CLAIMED : ON THE BASIS OF AFOREMENTIONED GROUNDS OF APPEAL, T HE ASSESSEE PRAYS: ITA NOS. 2791 & 2792/BANG/2017 PAGE 6 OF 11 1. TO SET ASIDE IN FULL THE PENALTY ORDER PASSED U/ S 271AAB BY THE ACIT, CIRCLE 3(1), HUBLI. 7. ON A PERUSAL OF THE ABOVE GROUND, WE OBSERVE THA T ADMITTEDLY THE ASSESSEE HAD RAISED A GROUND WITH REGARD TO PASSING OF ORDER U/S. 271AAB OF THE ACT CONSEQUENT TO ASSESSMENT ORDER U/S. 153 C OF THE ACT. BEING SO, THE LD. DR IS NOT CORRECT IN ARGUING THAT THERE WAS NO SUCH GROUND RAISED BEFORE THE FIRST APPELLATE AUTHORITY. EVEN IF THER E IS NO GROUND BEFORE THE FIRST APPELLATE AUTHORITY, THE TRIBUNAL IS NOT PREC LUDED TO ADJUDICATE THIS GROUND BEING A LEGAL GROUND. 8. COMING TO THE ARGUMENTS OF THE LD. AR, WE HAVE T O GO THROUGH THE PROVISIONS OF SECTION 271AAB OF THE ACT, WHICH READ S AS FOLLOWS:- PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SEC TION 132 ON OR AFTER THE 1ST DAY OF JULY, 2012, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM , (A) A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSE SSEE (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 INCOM E HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; AND ITA NOS. 2791 & 2792/BANG/2017 PAGE 7 OF 11 (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFI ED PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT O F THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UN DER SUB-SECTION (4) OF SECTION 132, DOES NOT ADMIT THE UNDISCLOSED INCOME; AND (II) ON OR BEFORE THE SPECIFIED DATE (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME F URNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; (C) A SUM WHICH SHALL NOT BE LESS THAN THIRTY PER CENT BUT WHICH SHALL NOT EXCEED NINETY PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED BY TH E PROVISIONS OF CLAUSES (A) AND (B). (2) 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). (3) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, A S FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'SPECIFIED DATE' MEANS THE DUE DATE OF FURNISH ING OF RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 OR THE DATE ON WHICH THE PERIOD SPECIFIED IN THE NOTICE ISSUED UNDER SEC TION 153A FOR FURNISHING OF RETURN OF INCOME EXPIRES, AS THE CASE MAY BE; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS Y EAR ITA NOS. 2791 & 2792/BANG/2017 PAGE 8 OF 11 (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BU T THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION ( 1) OF SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE TH E DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETUR N OF INCOME FOR THE PREVIOUS YEAR BEFORE THE DATE OF SEA RCH; OR (II) IN WHICH SEARCH WAS CONDUCTED; (C) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR RE PRESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEW ELLERY 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 SEA RCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR ; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR RE PRESENTED, 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. 9. WE FIND THAT IDENTICAL ISSUE WAS CONSIDERED BY THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF SHRI SURESH H. KERUDI (SUPRA) WHEREIN IT WAS HELD AS UNDER:- 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT AN IDENTICAL PLEA WAS PUT FORTH BY THE ASSESSEE IN THE CASE OF ITA NOS. 2791 & 2792/BANG/2017 PAGE 9 OF 11 SHREEJI CORPORATION (SUPRA) AND THE AHMEDABAD BENCH OF THE TRIBUNAL IN ITS ORDER ACCEPTED THE STAND AND HELD A S FOLLOWS:- 5. A PERUSAL OF THE ASSESSMENT ORDER UNDISPUTEDL Y POINTS OUT THAT NO SEARCH HAD TAKEN PLACE IN THE CA SE OF THE 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 ASSESSEE ADMITS THE UNDISCLOSED INCOME IN A STATEME NT UNDER SUB-SECTION 4 OF SECTION 132 OF THE ACT SUBJE CT TO FULFILLMENT OF OTHER CONDITIONS WITH WHICH WE ARE P RESENTLY NOT CONCERNED WITH. THEREFORE, IT IS MANIFEST THAT APPLICABILITY OF SECTION 271AAB IS INTEGRALLY CONNE CTED TO SEARCH UNDER S.132 OF THE ACT. IN THE ABSENCE OF SE ARCH UNDER S. 132 OF THE ACT, THE ASSESSEE HAS NO OCCASI ON TO AVAIL THE CONCESSIONAL TREATMENT BY WAY OF ADMISSIO N UNDER S.132(4) OF THE ACT. THUS, WE FIND OBVIOUS ME RITS IN THE OBSERVATIONS MADE BY THE FIRST APPELLATE AUTHOR ITY THAT PROVISIONS OF SECTION 271AAB OF THE ACT ARE NOT APP LICABLE TO THE CASE OF THE ASSESSEE. IN THE ABSENCE OF SEAR CH UNDER S.132 OF THE ACT, THE CONSEQUENTIAL OR INCIDENTAL ASSESSMENT PROCEEDINGS UNDER S.153C OF THE ACT WILL NOT, IN OUR VIEW, ENTITLE THE AO TO USURP JURISDICTION U NDER S.271AAB OF THE ACT FOR THE 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 PERUSAL OF THE PROVISIONS OF SECTION 271AAB SHOWS THAT THE OPENING WORDS ARE PENALTY WHERE SEARCH HAS BEEN INITIATED A PERUSAL OF THE PROVISIONS UNDER SECTIO N 271AAB ALSO TALKS OF THE ASSESSEE DECLARING ANY UNDISCLOSED INCOME IN THE COURSE OF THE SEARCH IN T HE STATEMENT UNDER SECTION 132(4). ADMITTEDLY IN THE P RESENT CASE, THAT IS IN THE CASE OF THE ASSESSEE FIRM IN A PPEAL THERE HAS BEEN NO SEARCH. SEARCH ADMITTEDLY IS ON THE RES IDENCE OF ONE OF THE PARTNER OF THE ASSESSEE FIRM. FURTHER A ITA NOS. 2791 & 2792/BANG/2017 PAGE 10 OF 11 PERUSAL OF THE ORDER OF THE LEARNED CIT(A) ALSO CLE ARLY SHOWS THAT THE LEARNED CIT(A) HAS CANCELLED THE PEN ALTY ON THE GROUND THAT THERE WAS NO SEARCH IN THE CASE OF THE ASSESSEE FIRM. THE REVENUE HAS NOT BEEN ABLE TO POI NT 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 BENCHES, WE ARE OF THE VIEW THAT THE PENALTY IN THE CASE OF ASSESSEE CANNOT BE SUSTAINED AS THE ASSESSEE WAS NOT A PERSON WHO W AS SUBJECTED TO SEARCH U/S. 132 OF THE ACT AND CONSEQUENTLY THE PROVISIONS OF SECTION 271AAB COULD NOT BE INVOKED IN HIS CASE. 10. SINCE THE ISSUE IN DISPUTE BEFORE US IS SIMILA R TO THAT CONSIDERED BY THE TRIBUNAL IN AN EARLIER OCCASION, TAKING A CONSI STENT VIEW, WE ARE OF THE OPINION THAT LEVY OF PENALTY U/S. 271AAB OF THE ACT IN THESE TWO ASSESSMENT YEARS IN THE CASE OF ASSESSEE IS NOT AT ALL JUSTIFI ED. ACCORDINGLY WE DELETE THE PENALTY U/S. 271AAB OF THE ACT IN BOTH THE ASSE SSMENT YEARS. 11. SINCE WE HAVE ALLOWED THE APPEAL OF THE ASSESSE E ON LEGAL ISSUE, WE REFRAIN FROM GOING INTO THE OTHER GROUNDS OF APP EALS RAISED BY THE ASSESSEE. 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JANUARY, 2021. SD/- SD/- ( BEENA PILLAI ) ( CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 19 TH JANUARY, 2021. / DESAI S MURTHY / ITA NOS. 2791 & 2792/BANG/2017 PAGE 11 OF 11 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.