Sh. Shums Inayatali Soomar, New Delhi V. ACIT, New Delhi

ITA 2844/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3735 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: ASHWANI TANEJA
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-2844/DEL/2017 ( ASSESSMENT YEAR: 2011-12) SHUMS INAYATALI SOOMAR C/O M/S RRA TAXINDIA, D-28, SOUTH EXTENSION PART-1, NEW DELHI. AAAPS6321G VS ACIT CENTRAL CIRCLE 9, NEW DELHI. & STAY NO. 346/DEL/2017 (IN ITA NO.- 2844/DEL/2017) ( ASSESSMENT YEAR: 2011-12) SHUMS INAYATALI SOOMAR C/O M/S RRA TAXINDIA, D-28, SOUTH EXTENSION PART-1, NEW DELHI. AAAPS6321G VS ACIT CENTRAL CIRCLE 9, NEW DELHI. ASSESSEE BY SH. ASHWANI TANEJA, ADV. REVENUE BY SH. S.S. RANA, CIT DR ORDER PER SHRI K.N. CHARY, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE CHALLENGING THE O RDER DATED 29.03.2017 IN APPEAL NO. 528/14-15(ORIGINAL)/56/15- 16 (NEW) PASSED BY DATE OF HEARING 12.10.2017 DATE OF PRONOUNCEMENT 23.10.2017 2 ITA NO. 2844/DEL/2017 & STAY NO. 346/DEL/2017 THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-NEW DE LHI (HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)) ON THE FOLLOWING GROUNDS OF APPEAL: 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE, LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF LD. AO IN IMPOSING PENALTY OF RS. 16,43,000/- U/S 271AA A AND THAT TOO WITHOUT ASSUMING JURISDICTION AS PER LAW AND MORE S O WHEN THE IMPUGNED PENALTY ORDER COULD NOT HAVE BEEN PASSED U NDER LAW. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN CONFIR MING THE ACTION OF LD. AO IN IMPOSING PENALTY U/S 271AAA AND THAT TOO WITHOUT ASSUMING JURISDICTION AND THUS PASSING THE IMPUGNED PENALTY ORDER IS ILLEGAL, VOID AB-INITIO, CONTRARY TO LAW AND FAC TS AND WITHOUT CONSIDERING THE SUBMISSION OF THE ASSESSEE AND WITH OUT OBSERVING THE PRINCIPLES OF NATURE JUSTICE. 3. THAT THE ASSESSEE CRAVES THE LEAVE TO ADD, ALTER OR AMEND THE GROUNDS OF APPEAL AT ANY STAGE AND ALL THE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. BRIEFLY STATED FACTS ARE THAT CONSEQUENT TO THE SEARCH CONDUCTED IN THE AERENS GROUP ON 17.08.2011, AND 10.02.2012, AND NOTICE U/S 153A OF THE ACT, ASSESSEE FILED THE RETURN OF INCOME DECLAR ING AN INCOME OF RS. 2,24,99,268/-. DURING SCRUTINY ASSESSMENT AO FOUND THE UNDISCLOSED INCOME OF RS. 1,64,00,000/-, WHILE MAKING ADDITION INITIATED PROCEEDINGS U/S 271AAA AND CONCLUDED THEM BY ORDER DATED 26.09. 2014 BY LEVYING A PENALTY OF RS. 16,43,000/-. APPEAL PREFERRED BY TH E ASSESSEE WAS DISMISSED BY WAY OF IMPUGNED ORDER. HENCE THIS APP EAL AND ALONG WITH APPEAL ASSESSEE FILED STAY PETITION TO STAY THE DEM AND, PENDING DISPOSAL OF THE APPEAL. 3 ITA NO. 2844/DEL/2017 & STAY NO. 346/DEL/2017 3. IT IS THE ARGUMENT OF THE LD. AR THAT U/S 271AAA OF THE ACT, THE AO MAY DIRECT THAT THE ASSESSEE SHALL PAY BY WAY OF PE NALTY A SUM COMPUTED AT THE RATE OF 10% OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, AS SUCH, THE PENALTY LEVIED SHALL BE WITH REF ERENCE TO THE SPECIFIED PREVIOUS YEAR ONLY. ACCORDING TO HIM SINCE THE SEA RCH IN THIS CASE WAS CONDUCTED ON 10.02.2012 WITH REFERENCE TO CLAUSE (B ) OF EXPLANATION 2 TO SECTION 271AAA THE SPECIFIED PREVIOUS YEAR IS ONLY THE F.Y. 2011-12 BUT NOT FY 2010-11, AS SUCH, THE PROCEEDINGS U/S 271AAA WITH REFERENCE TO THE PREVIOUS YEAR RELEVANT FOR THE AY 2011-12 ARE B AD UNDER LAW. LD. DR HEAVILY RELIED UPON THE ORDERS OF THE AUTHORITIES B ELOW. 4. RELEVANT PORTION OF SECTION 271AAA READS AS FOLL OWS: 271AAA. PENALTY WHERE SEARCH HAS BEEN INITIATED.( 1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HA S BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCL OSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) .. (3) .. (4) .. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A ) (B ) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS YEA R (I) WHICH HAS ENDED BEFORE THE DATE OF SEARC H, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) O F SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SE ARCH AND THE 4 ITA NO. 2844/DEL/2017 & STAY NO. 346/DEL/2017 ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. THEREFORE, IT IS CLEAR THAT U/S 271AAA(1), THE PENA LTY HAS TO BE COMPUTED WITH REFERENCE TO THIS SPECIFIED PREVIOUS YEAR AND IN SO FAR AS THE PREVIOUS YEAR IN THIS CASE IS CONCERNED THE YEAR IN WHICH TH E SEARCH WAS CONDUCTED BECAUSE FOR THE YEAR ENDED WITH 31.03.2011 THE DUE DATE WAS 30.09.2011 FOR FILING THE RETURN OF INCOME AND IN THIS MATTER THE ASSESSEE HAD FILED THE RETURN OF INCOME FOR THE AY 2011-12 ON 31.07.2011 A S IS EVIDENT FROM THE ACKNOWLEDGEMENT OF RETURN FOR THE AY 2011-12. THER EFORE, IN RESPECT OF THE CASE ON HAND THE PREVIOUS YEAR HAS TO BE RECKON ED NOT WITH REFERENCE TO SUB CLAUSE (I) BUT IT HAS TO BE RECKONED WITH RE FERENCE TO SUB CLAUSE (II) IN WHICH CASE THE SPECIFIED PREVIOUS YEAR IS THE FY 2011-12 AND THE AY 2012-13. WITH THIS VIEW OF THE MATTER, WE HOLD THA T NO PENALTY U/S 271AAA COULD BE LEVIED WITH REFERENCE TO THE AY 2011-12 AN D IN THIS FACTUAL MATRIX WE ARE UNABLE TO SUSTAIN THE ORDERS OF THE AUTHORIT IES BELOW. WE, THEREFORE, QUASH THE SAME AND DIRECT THE AO TO DELE TE THE PENALTY FOR THE AY 2011-12. SINCE WE DISPOSING OF THE MAIN APPEAL ITSELF, STAY PETITION BECOMES INFRUCTUOUS, AS SUCH, THE SAME IS LIABLE TO BE DISMISSED. 5 ITA NO. 2844/DEL/2017 & STAY NO. 346/DEL/2017 6. IN THE RESULT, STAY PETITION IS DISMISSED AND TH E APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23.10.2017 SD/- SD/- (G.D. AGRAWAL) (K.N. CHARY) PRESIDENT JUDICIAL MEMBER DATED: 23.10.2017 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI