Sinhgad Technical Education Society, Pune V. Deputy Commissioner of Income-tax,

ITA 399/PUN/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6988 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-12-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 03-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: PIYUSH P BAFNA
• Keywords: Search and seizure; Documents seized
• Section: 69C; 143(3); 132

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM / ITA NO.399/PUN/2014 / ASSESSMENT YEAR : 2006-07 SINHGAD TECHNICAL EDUCATION SOCIETY, S.NO.44/1, VADGAON (BUDRUK), OFF. SINHAGAD ROAD, PUNE 411041. PAN NO.AABTS9900Q. . / APPELLANT V/S ASST.COMMISSIONER OF INCOME TAX, CENTRAL, CIRCLE 2(2), PUNE. . / RESPONDENT / APPELLANT BY : SHRI PIYUSH P. BAFNA / RESPONDENT BY : SHRI HARESHWAR SHARMA / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL OF THE ASSESSEE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL, PUNE, DATED 16.01.2014 FOR THE ASSESSMENT YEAR 2006-07. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- / DATE OF HEARING : 16.02.2017 / DATE OF PRONOUNCEMENT: 10.03.2017 2 ITA NO.399/PUN/2014 AY.NO.2006-07 2.1. AN ACTION U/S 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF SHRI M.N. NAVALE ON 20.07.2005. MR. NAVALE IS STATED TO B E PRINCIPAL TRUSTEE OF SINHAGAD TECHNICAL EDUCATION SOCIETY. DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS FROM THE DOCUMENTS SEIZED FROM THE RESIDENCE OF PRINCIPAL TRUSTEE, SHRI NAVALE, IT WAS FOUND THAT THE TRUST WAS TAKING HUGE DONA TIONS FOR THE PURPOSE OF ADMISSIONS AND QUIET A LARGE PART WAS BEING APPROPRIATED BY THE TRUSTEES FOR THEIR PERSONAL PURPOSE S. CONSEQUENT TO SEARCH, ASSESSMENT U/S 143(3) WAS COMPLE TED ON 07.08.2008 AND THE TOTAL INCOME WAS ASSESSED AT RS.34,79,99,520/- WHICH INCLUDED AN ADDITION OF RS.22,45,06,500/- ON ACCOUNT OF UNDISCLOSED INCOME OUT OF THE DONATIONS COLLECTED FROM THE STUDENTS. ON THE ADDITION OF RS.22,45,06,500/- THAT WAS MADE, PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED AND THEREAFTER VIDE ORDER DT.31.03.20 11, AO CONCLUDED THAT ASSESSEE HAS CONCEALED THE INCOME AN D WAS THEREFORE LIABLE FOR PENALTY U/S 271(1)(C) AND ACCORDINGLY LE VIED PENALTY OF RS.6,73,51,950/-. AGGRIEVED BY THE ORDER OF A O, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE OR DER DT.16.01.2014 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIE VED BY THE ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GROUNDS : 1. ON T H E FACTS A ND I N TH E C I R CUM S T A N CES OF T H E CASE, TH E CIT(A) HAS ER R ED IN NOT A P P RECIATI N G T H E CO R REC T L AW TH A T PR OVES T H AT T H E ASSESSMENT ORDER PASSED U/S 153C RWS 143(3) O R U/S.1 43(2) RWS 1 43(3) I S BAD IN LAW AND INVA L ID AND NO PENALTY AT A L L CAN B E I M P OSED WHERE T H E ASSESS M E NT OR D ER I T SE L F IS A N U LL ITY I N THE EYES OF L AW . 2. ON THE FACT S A N D IN THE CIRC U MSTANCES AND W ITH OUT PREJ UDI CE T O A B OVE GROUND NO 1 , THE CIT(A) H AS U TTE RL Y FA IL ED IN P R OV IN G F I RST L Y , T H A T IN FAC T T H E AP P E LL ANT HAS CO LL ECTED T H E D O N A TI O N S AN D SECO NDL Y, TH A T I T I S TH E CO NC EA L E D INCO M E OF T H E APPE LL ANT IN S T I T U TION . 3 ITA NO.399/PUN/2014 AY.NO.2006-07 3. ON TH E F A CTS AN D IN T H E C I RC UM STA N CES OF T H E CASE A ND W ITH O U T PREJ UD ICE TO A B OVE GROUND NO 1 T H E CIT(A) HAS AGA I N ERRE D IN NOT APPRECIATI N G T H E PATENT , APPARENT , O B V IOU S AR I THMETICA L ERRO R IN M AKI N G T H E ADDIT I ON OF RS. 22 , 45 , 06,500/- IN PLACE OF R S . 1 0 , 1 5 , 22,340/- W HICH ASSESS IN G OFF I CE R HI MSE L F H AS WORKE D O UT IN THE ANNEXURE TO T H E AS SES SME NT O RD E R . 4 . ON THE FACT S AN D IN T H E C I RC UM STA N CES OF T H E CASE A ND WIT H O U T PREJU D ICE TO ABOV E G R O UN D NO 1 TH E CIT(A) H AS F UR T H E R U TTER L Y FA IL ED IN NO T A PPR EC I AT I NG B OTH THE FACTUA L A ND L EGA L S UBM I S S I O N T H AT THE A M O UN T OF RS .1 0 , 1 5 , 22,340/- IS A LREAD Y TAX E D A S IN C OM E OF S H R I . M.N . NAVA L E ON S UB STANT I VE B ASIS I N T H E ASSESSMENT ORDER PASSED FOR TH E SA M E ASSESS M E NT YEAR U / S. 14 3 ( 3) A ND H AV IN G SO AC C E PT E D T H E ASSESS I NG OFFICER CO UL D NOT H AVE ASSESSE D TH E SAI D VA R Y A M O U NT AS T H E I NCOME OF T H E APPE LL ANT I N S T I T U T I O N AN D W HI C H BASICAL L Y CA NN OT B E T H E S U B J ECT MA TT ER OR ITEM TO B E CO N SIDERED I N T HI S PE N A LT Y PR OCEE DING 5. ON T H E FACT S A ND I N T H E C I RCU M STANCES OF THE CASE THE C I T(A) HA S ERRED IN NOT A PPL Y ING HI S COMPE T E N T M I N D IN EXA MININ G A N D A PP REC I ATING TH E VA LI D S U B M ISSIONS AFRESH A S IS R E Q U IR ED W HIL E D ECI DIN G TH E I SS U E OF L EVY OF PENA L TY AS PENA LT Y PROCEEDING I S DI S T I NCT F ROM A SS ESSME NT PROCEE D ING . THIS O R DER PA SS E D U/S 271 ( 1 )(C ) I S BASED EX C LUSI VE L Y ON T H E MA T E RI A L CO N S ID E R ED A D E QU ATE F O R T H E PURP OSE OF M AK IN G AN ASSESS M ENT B Y THE ASSESS I NG OF FI CE R A ND IN TH I S P E NALT Y PR OCEE D I N G ASS E SS I NG OFF I CER H AS FAI L ED TO R EEXA MIN E T HI S I SS U E IN T H E P RO P E R P E R S P EC T IVE P A R T I C UL A RL Y TO PROVE A N D P IN P O IN T SPEC I F I CA LL Y T H A T N O T ONL Y T H E SA ID A M O UNT I S TH E CONCEA L E D I NC O M E BUT I T I S RE PR ESENTE D IN T H E FORM S OF UN E XPL A IN E D I NVES TM E NT S M A DE B Y TH E A PP E LLANT IN ST ITUT I ON . 3. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THE SO LE CONTROVERSY IS WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT. HE FURTHER SUBMITTED THAT AGAINST THE QUANTUM ADD ITION OF RS.22,45,06,550/-, ASSESSEE HAD PREFERRED APPEAL BEFORE TRIBUNAL. TRIBUNAL VIDE ORDER DT.14.12.2016 IN ITA 320/PN/2010 HAS SET ASIDE THE ORDER OF LD. CIT(A) AND DE LETED THE ENTIRE ADDITION OF RS.22,45,06,500/-. HE THEREFORE SUBM ITTED THAT SINCE THE QUANTUM ADDITION ON WHICH THE PENALTY HA S BEEN LEVIED ITSELF HAS BEEN SET ASIDE BY TRIBUNAL, THE VERY BASIS OF LEVY OF PENALTY DOES NOT SURVIVE AND THEREFORE THE PENALTY LEV IED BY AO AND CONFIRMED BY LD. CIT(A) BE DELETED. HE POINTED TO THE 4 ITA NO.399/PUN/2014 AY.NO.2006-07 RELEVANT FINDING IN THE ORDER OF TRIBUNAL. HE THEREFORE PRA YED THAT THE PENALTY BE DELETED. LD.D.R. ON THE OTHER HAND D ID NOT CONTROVERT THE FACTUAL SUBMISSION MADE BY LD.A.R. BUT HOW EVER SUPPORTED THE ORDER OF LD. CIT(A). 4. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPEC T TO LEVY OF PENALTY U/S 271(1)(C) ON THE ADDITION OF UNDISCLOSED INCOME OU T OF THE DONATIONS COLLECTED FROM THE STUDENTS AT RS.22,45,06,500/- MADE U/S 69C OF THE ACT. WE FIND THAT TH E CO-ORDINATE BENCH OF THE TRIBUNAL IN ITA 320/PN/2010 DT.14.12.2016 HAS SET ASIDE THE ORDER OF LD. CIT(A) AND DE LETED THE ENTIRE ADDITION OF RS.22,45,06,500/-. WE ARE OF THE VIEW THAT SINCE THE QUANTUM ADDITION ON WHICH IMPUGNED PENALTY HAS BEEN LEVIED HAS ITSELF HAS BEEN DELETED, THE QUESTION OF LE VY OF PENALTY ON ACCOUNT OF CONCEALMENT OF INCOME OF SUCH ADDITIO N DOES NOT SURVIVE. WE THEREFORE DELETE THE PENALTY AND THUS, THE GROUNDS OF THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON THE 10 TH DAY OF MARCH, 2017. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ! / ACCOUNTANT MEMBER PUNE; ! DATED : 10 TH MARCH, 2017. YAMINI 5 ITA NO.399/PUN/2014 AY.NO.2006-07 ' # $%& '#$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. CIT(CENTRAL), PUNE, CIT(A)-12, PUNE. &() $$*+, ' *+, / DR, ITAT, B PUNE; )-. / / GUARD FILE. / BY ORDER, // TRUE COPY // // TRUE COPY // 0 1234 / ASSISTANT REGISTRAR, ' *+ , / ITAT, PUNE.