ASST CIT CEN CIR 43, MUMBAI V. PRAVIN S. JAIN, MUMBAI

ITA 4005/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1847 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 02-06-2014
• Court: TRIBUNAL
• Department Lawyers: DAYASAGAR
• Assessee Lawyers: MANISH SANGHAVI
• Keywords: Initiation of penalty proceedings
• Section: 133A; 153A; 132

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER I.T.A. NO. 4005/M/2014 (ASSESSMENT YEAR : 2010 - 2011 ) ACIT, CENTRAL CIRCLE 43, R.NO.659, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. / VS. MR. PRAVIN S. JAIN, 203, KALBADEVI ROAD, 104, 1 ST FLOOR, MUMBAI - 400002. ./ PAN : A ABPJ2451M ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DAYA SAGAR, CIT - DR / RESPONDENT BY : SHRI MANISH SANGHAVI / DATE OF HEARING : 01 .12.2015 / DATE OF PRONOUNCEMENT : 16 .12.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE REVENUE ON 2.6.2014 IS AGAINST THE ORDER OF THE CIT (A) - 38, MUMBAI DATED 27.2.2014 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. THE CORE ISSUE RAISED IN THIS APPEAL RELATES TO THE LEVYABILTY OF PENALTY U/S 271AAA OF TH E ACT WHEN THERE IS NO WARRANT IN THE NAME OF THE ASSESSEE INITIATING SEARCH AND WHEN THE ASSESSMENTS WERE MADE U/S 153C OF THE ACT. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE THAT THERE WAS A SEARCH ACTION IN THE CASE OF SHRI HASMUKH JOKMAL JAIN AND S HRI INDRAMAL SOLANKI ON 8.5.2009. SUBSEQUENT TO THE SEARCH ACTION, THERE WAS A SURVEY U/S 133A OF THE ACT ON THE PREMISES OF THE ASSESSEE, WHO IS A PROPRIETOR OF M/S. DARSHAN GOLD, A PROPRIETARY CONCERN. IT IS AN UNDISPUTED FACT THAT THE ASSESSMENTS IN TH E CASE OF THE ASSESSEE WERE COMPLETED U/S 153C OF THE ACT AND NOT U/S 153A OF THE ACT. 3. WITH THE BACKGROUND OF THE ABOVE FACTS, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT THE PENALTY PROCEEDINGS INITIATED U/S 271AAA OF THE ACT IN THE CASE OF THE ASS ESSEE AND LEVIED PENALTY OF RS. 20 LAKHS. IN THIS REGARD, LD COUNSEL 2 FOR THE ASSESSEE SUBMITTED THAT SUCH LEVY OF PENALTY IS UNSUSTAINABLE IN LAW IN VIEW OF THE PROVISIONS OF SECTION 271AAA OF THE ACT. FURTHER, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATT ENTION TO THE LANGUAGE OF THE SAID SECTION 271AAA OF THE ACT AND READ OUT THAT THE ASSESSING OFFICER MAY...........DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007 [BUT BEFORE THE 1 ST DAY OF JU LY, 2012]............ 4. ON THE OTHER HAND, LD DR FOR THE REVENUE RELIED ON THE PENALTY ORDER OF THE AO AND SUBMITTED THAT THIS IS THE CASE WHERE ASSESSEE COMPLIED WITH THE DECLARATION MADE U/S 132(4) OF THE ACT AND PAID TAXES THEREON. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE PROVISION OF SECTION 271AAA OF THE ACT. THERE IS NO DISPUTE ON THE FACT THAT THE ASSESSEE OFFERED THE DISCLOSED INCOME AND PAID TAXES. THAT I S S U E O N Q U A N T U M REACHED THE FINALITY. WHEN COMES TO THE PENALTY PROCEEDINGS, THE AO ERRONEOUSLY INITIATED THE PENALTY PROCEEDINGS U/S 271AAA OF THE ACT WHEN THE PRESENT ASSESSEE IS NOT COVERED U/S 132 OF THE ACT. HE IS COVERED ONLY U/S 133A OF THE ACT. SECTION 271AAA IS NOT RELEVANT FOR INITIATING SUC H PROCEEDINGS LEGALLY. FURTHER, ON PERUSAL OF THE ORDER OF THE CIT (A), WE FIND PARAS 6.1 TO 6.3 ARE RELEVANT IN THIS REGARD. CONSIDERING THE IMPORTANCE OF THE RELEVANT PARA 6.3 OF THE IMPUGNED ORDER AND FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SA ME IS EXTRACTED AS FOLLOWS: - 6.3. IN VIEW OF THE ABOVE, I AM OF THE VIEW THAT THE PROVISIONS OF SECTION 271AAA OF THE ACT CAN BE INVOKED ONLY IN RESPECT OF THE ASSESSEE, WHO HAS BEEN SEARCHED U/S 132 OF THE ACT. NO SEARCH U/S 132 OF THE ACT WAS CONDUCTED IN THE CASE OF THE APPELLANT. SURVEY OPERATION U/S 133A OF THE ACT CANNOT LEAD TO INITIATION OF PENALTY PROCEEDINGS U/S 271AAA OF THE ACT. THE PENALTY IN THE CASE SHOULD HAVE BEEN INITIATED U/S 271(1)(C) OF THE ACT. IN VIEW OF THE ABOVE, THE PENALTY LEVIED U/S 271AAA OF THE ACT AMOUNTING TO RS. 20,00,000/ - IS HEREBY DELETED. 6. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE CIT (A) HAS RIGHTLY ADJUDICATED THE ISSUE AS PER THE PROVISIONS OF THE ACT AND I N ACCORDANCE WITH LAW. THEREFORE, IN OUR VIEW, THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED . 3 ORDER PRONOUNCED IN THE OPEN COURT ON 1 6 T H DECEMBER, 2015. S D / - S D / - ( AMARJIT SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 6 /12/2015 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI