U.P. Distillers Association, New Delhi V. ACIT, New Delhi

ITA 2965/DEL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3034 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2004-2005
• Appeal Filed On: 12-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPIKA MITTAL
• Assessee Lawyers: K SAMPATH SH V RAJ KUMAR
• Keywords: Search and seizure
• Section: 271(1)(c); 153A; 12AA; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI G.D.AGRAWAL, VICE PRESIDE NT & SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.-2964-67/DEL/2017 ( ASSESSMENT YEAR: 2003-04, 2004-05, 2005-06, 2006-07 ) U.P. DISTILLERS ASSOCIATION PHD HOUSE, 4 TH FLOOR, 4/2, SIRI INSTITUTIONAL AREA, AUGUST KRANTI MARG NEW DELHI PAN : AAATU0170H VS . ACIT CENTRAL CIRCLE-31 NEW DELHI APPELLANT RESPONDENT ASSESSEE BY : SH. K.SAMPATH, SH. V. RAJ KUMAR, ADV. REVENUE BY : MS. DEEPIKA MITTAL, CIT(DR ) ORDER PER BENCH: THESE FOUR APPEALS ARE FILED BY THE ASSESSEE AND CHALLENGE THE CONFIRMATION OF IMPOSITION OF PENALTY IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR THE CAPTIONED FOR ASSESSMENT YEARS A S UNDER:- (I) ASSESSMENT YEAR 2003-04 PENALTY OF RS. 17,89,20,0 00/- (II) ASSESSMENT YEAR 2004-05 PENALTY OF RS. 25,59,55,7 57/- DATE OF HEARING 26 .0 2 .201 9 DATE OF PRONOUNCEMENT 27 . 0 2 .201 9 2 ITA N O. 2964-67/DEL/2017 (U.P.DISTILLERS ASSOCIATION) (III) ASSESSMENT YEAR 2005-06 PENALTY OF RS. 15,22,42,2 95/- (IV) ASSESSMENT YEAR 2006-07 PENALTY OF RS. 18,99,01,1 55/-. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN ASSOCIATION OF DISTILLERS IN THE STATE OF UTTAR PRA DESH. THE ASSOCIATION WAS GRANTED REGISTRATION U/S 12AA OF TH E ACT VIDE ORDER DATED 23.05.1994 WITH EFFECT FROM 26.10.1989. THE ORDER OF GRANTING REGISTRATION WAS FURTHER MADE EFFECTIVE UP 01.10.2014 BY VIRTUE OF THE ORDER OF THE HONBLE HI GH COURT OF DELHI. SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CONDUCTED AT THE RESIDENCE OF SHRI R.K. MIGLANI, SE CRETARY GENERAL OF THE ASSOCIATION AS WELL AS AT THE PREMIS ES OF THE ASSOCIATION ON 14.02.2006. DOCUMENTS FOUND AT THE R ESIDENCE OF SHRI R.K. MIGLANI WERE SEIZED AND HIS STATEMENT WAS RECORDED U/S 132(4) OF THE ACT. FRESH ASSESSMENTS WERE COMPL ETED U/S 153A OF THE ACT IN RESPECT OF ALL THE CAPTIONED YEA RS AND PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE ALSO INIT IATED FOR ALL THE FOUR YEARS. THE ASSESSEES APPEALS IN THE QUANT UM ASSESSMENTS WERE DISMISSED BY THE LD. CIT (APPEALS) . HOWEVER, THE ASSESSEES APPEALS BEFORE THE ITAT WERE ALLOWED AND THE QUANTUM ADDITIONS STOOD DELETED IN ITA NOS. 9, 10, 11/DEL/2012 AND 3208, 3209, 3210, 3211/DEL/2013 VID E ORDER DATED 14.12.2018. VIDE PARA 202 ON PAGE 126, THE IT AT HELD 3 ITA N O. 2964-67/DEL/2017 (U.P.DISTILLERS ASSOCIATION) THAT THE ACTION TAKEN U/S 153A OF THE ACT AGAINST T HE ASSESSEE WAS VIDE AB INITIO AND ILLEGAL BECAUSE NO SEARCH HAD TAKEN PLACE IN THE CASE OF THE ASSESSEE. THEREAFTER, ON MERITS ALSO THE ITAT HELD THAT THE QUANTUM ADDITIONS MADE TO THE RETURNE D INCOME OF THE ASSESSEE WERE UNSUSTAINABLE IN FACTS AND LAW . THE RELEVANT OBSERVATIONS OF THE ITAT IN THIS REGARD AR E FOUND IN PARA 230 APPEARING AT PAGE 153 OF THE SAID ORDER. 3.0 THE LD. AUTHORIZED REPRESENTATIVE HAS PLACED O N RECORD, COPY OF THE ABOVE SAID ITAT ORDER IN THE QU ANTUM PROCEEDINGS AND HAS SUBMITTED THAT IN VIEW OF THE Q UANTUM ADDITIONS HAVING BEEN DELETED BY THE ITAT, THE IMPU GNED PENALTIES DID NOT SURVIVE. 4.0 THE LD. CIT-DR SUPPORTED THE ORDERS OF THE LOW ER AUTHORITIES BUT FAIRLY ACCEPTED THAT THE QUANTUM PR OCEEDINGS HAD BEEN SETTLED BY THE TRIBUNAL IN FAVOUR OF THE A SSESSEE. 5.0 ACCORDINGLY, IN VIEW OF THE FACT THAT THE TRIB UNAL HAS HELD THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT AS BEING VOID AB INITIO AND INVALID AND HAS ALSO DELETED THE ADDITIONS ON MERITS IN ALL THE FOUR YEARS UNDER APPEAL, THE IMPU GNED PENALTIES DO NOT SURVIVE. THE ORDERS OF THE LD. CIT (APPEALS) ARE SET ASIDE AND THE IMPUGNED PENALTIES ARE DIRECTED T O BE DELETED. 4 ITA N O. 2964-67/DEL/2017 (U.P.DISTILLERS ASSOCIATION) 6.0 IN THE FINAL RESULT, ALL THE FOUR APPEALS OF T HE ASSESSEE STAND ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.02.2019. SD/- SD/- (G.D.AGRAWAL) (SUDHANSHU SRIVA STAVA) VICE PRESIDENT JUDICIA L MEMBER DATED: 27.02.2019 *BR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 27/02/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/02/2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 27/02/2019 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 27/02/2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 27/02/2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 27/02/2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE 27 /02/2019 5 ITA N O. 2964-67/DEL/2017 (U.P.DISTILLERS ASSOCIATION) WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER