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

ITA 2845/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3728 (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: 2012-2013
• Appeal Filed On: 08-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-2845/DEL/2017 ( ASSESSMENT YEAR: 2012-13) 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. 347/DEL/2017 (IN ITA NO.- 2845/DEL/2017) ( ASSESSMENT YEAR: 2012-13) 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. SH. SHANTANU JAIN, 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. 529/14-15(ORIGINAL)/84/15- 16 (NEW) PASSED BY DATE OF HEARING 12.10.2017 DATE OF PRONOUNCEMENT 23.10.2017 2 ITA NO. 2845/DEL/2017 & STAY NO. 347/DEL/2017 THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-25, NE W DELHI (HEREINAFTER FOR SHORT CALLED AS THE LD. CIT (A)) ON THE FOLLO WING 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. 3,60,000/- U/S 271AAA 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 INCOME TAX ACT, 1961 (HEREINAFTER REFERRED AS THE ACT) ASSESSEE FILED THE RETURN OF INCOME DECLARING AN INCOME OF RS. 1,3 8,62,056/-. DURING SCRUTINY ASSESSMENT AO FOUND THE UNDISCLOSED INCOME OF RS. 36 LAKHS AND WHILE MAKING ADDITION ON THAT SCORE, ALSO INITI ATED PROCEEDINGS U/S 271AAA AND CONCLUDED THEM BY ORDER DATED 26.09.2014 BY LEVYING A PENALTY OF RS. 3,60,000/-. APPEAL PREFERRED BY THE ASSESSEE WAS DISMISSED BY WAY OF IMPUGNED ORDER. HENCE THIS APP EAL. ALONG WITH APPEAL ASSESSEE FILED STAY PETITION TO STAY THE DEM AND, PENDING DISPOSAL OF THE APPEAL. 3 ITA NO. 2845/DEL/2017 & STAY NO. 347/DEL/2017 3. IT IS THE ARGUMENT OF THE LD. AR THAT ALL THE TH REE CONDITIONS LAID DOWN IN SUB SECTION (2) OF SECTION 271AAA ARE FULFI LLED, AND NO QUERY WAS RAISED BY THE AO AS TO THE MANNER IN WHICH THE UNDI SCLOSED INCOME WAS DERIVED AND THE ASSESSEE PAID THE TAX TO BE WITH TH EIR INTEREST, AS SUCH, NO PENALTY COULD BE VISITED. HE PLACED RELIANCE ON TH E DECISION REPORTED IN DCIT VS. ASHOK NAGRATH IN 124 DTR 0132 (DELHI), TAV IR KUMAR DIAMONDS LTD. VS. ACIT IN 32 SOT 272 (MUM.), PRAMOD KUMAR JA IN VS. DY. CIT 77 DTR 244 (CTK.). THE SECOND LIMB OF THE CONTENTION OF THE ASSESSEE IS THAT NEITHER THE ASSESSMENT ORDER NOR THE NOTICE ISSUED PURSUANT THERETO U/S 271AAA SPELL OUT FOR VIOLATION OF WHICH PROVISION T HE PENALTY PROCEEDINGS ARE INITIATED, AS SUCH, THE ASSESSEE IS DEPRIVED OF AN OPPORTUNITY TO DEFEND THEMSELVES EFFECTIVELY. HE BROUGHT TO OUR NOTICE T HE CONTENTS OF PARAGRAPH NO. 4 OF ASSESSMENT ORDER AND ALSO THE NO TICE ISSUED U/S 271AAA. FOR THIS PRINCIPLE HE PLACED RELIANCE ON T HE DECISION REPORTED IN CIT & ANR. VS. M/S SSAS EMERALD MEADOWS IN SLP NO. 11485/2016, DATE OR ORDER 05.08.2016, SUPREME COURT OF INDIA, ( B) CIT VS. M/S SSAS EMERALD MEADOWS IN ITA NO. 380/2015, HIGH COURT OF KARNATAKA, DATED 23.11.2015 AND (C) CIT VS. MANJUNATHA COTTON & GINN ING FACTORY IN 359 ITR 565 (KAR.). BASING ON THESE TWO GROUNDS HE SU BMITS THAT THE PENALTY 4 ITA NO. 2845/DEL/2017 & STAY NO. 347/DEL/2017 CANNOT BE SUSTAINED. LD. DR HEAVILY RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE GONE THROUGH THE RECORD IN THIS MATTER P ARAGRAPH NO. 4 OF THE ASSESSMENT ORDER READS AS FOLLOWS: 4. THE UNDISCLOSED INCOME OF RS. 1,64,00,000/- HA S BEEN DECLARED IN THE RETURN OF AY 2011-12, AND TAXES PAID. THE BALA NCE UNDISCLOSED INCOME OF RS. 36,00,000/- HAS BEEN DECLARED IN THE AY 2012-13. THE ASSESSEE HAS MADE DISCLOSURE OF RS. 36,00,000/- ONL Y ON ACCOUNT OF SEARCH PROCEEDINGS, THEREFORE, I AM SATISFIED THAT PENALTY PROCEEDINGS U/S 271AAA IS WARRANTED IN THIS CASE AND AS SUCH TH E PENAL PROCEEDINGS U/S 271AAA IS INITIATED BY ISSUE OF PEN ALTY U/S 271AAA. PENALTY U/S 271(1)(C) IS ALSO BEING INITIATED FOR C ONCEALING THE PARTICULARS OF INCOME SEPARATELY. 5. SO ALSO VIDE PAGE NOS. 10 & 13 COPIES OF NOTICES DATED 20.03.2014 AND 28.08.2014 ARE PRODUCED. IN THESE NOTICES ALSO IT IS STATED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF IN TERMS OF EXPLANATIONS 1, 2, 3, 4 AND 5. SECTION 271AAA(1) DEALS ONLY WITH UNDISCLOSED INCOME OF THE SPECIFIED YEAR BUT THE NOTICE IS NOT SPECIFIC ON THAT ASPECT. LD. COU NSEL SUBMITTED THAT THE PENALTY IS LEVIED ON ALTOGETHER A DIFFERENT CHARGE THAT THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE MANNER IN WHICH SUCH U NDISCLOSED INCOME WAS EARNED. BASING ON THE DECISIONS REPORTED IN CI T VS. MAHENDRA C. SHAH IN 299 ITR 305, NEERAT SINGAL VS. ASSTT. CIT 1 01 DTR 238 (DEL. E), CIT VS. RADHA KISHAN GOEL IN 278 ITR 454 AND DCIT V S. SULOCHANADEVI 5 ITA NO. 2845/DEL/2017 & STAY NO. 347/DEL/2017 A. AGARWAL IN ITA NO. 1052/ADH./2012, HE ARGUED THA T IN THE ABSENCE OF ANY QUERY ABOUT THE MANNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED AND ABOUT ITS SUBSTANTIATION, RAISED BY THE AO DURING THE COURSE OF RECORDING OF STATEMENT U/S 132(4) OF THE ACT, THE A O IS NOT JUSTIFIED IN LEVYING THE PENALTY. 6. IT IS NOT THE CASE OF THE REVENUE THAT AFTER THE ASSESSEE DECLARED INCOME INCLUDING THE UNDISCLOSED INCOME ANY QUERY W AS MADE BY THE AO AS TO THE MANNER IN WHICH THE UNDISCLOSED INCOME WA S DERIVED. AO SIMPLY ACCEPTED THE UNDISCLOSED INCOME WITHOUT RAIS ING ANY QUERY AND THE ASSESSEE PAID THE TAXES WITH INTEREST. IN THE CIRC UMSTANCES, RESPECTFULLY FOLLOWING THE DECISIONS RELIED UPON BY THE ASSESSEE , WE HOLD THAT THE PENALTY U/S 271AAA CANNOT BE SUSTAINED, AND THE SAM E HAS TO BE DELETED. SINCE, WE DISPOSED OFF THE MAIN APPEAL ITSELF, STAY PETITION BECOMES INFRUCTUOUS, AS SUCH, THE SAME IS LIABLE TO BE DISM ISSED. 7. IN THE RESULT, STAY PETITION IS DISMISSED AS INF RUCTUROUS AND THE 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 6 ITA NO. 2845/DEL/2017 & STAY NO. 347/DEL/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