Kamlesh Garg, New Delhi V. DCIT, New Delhi

ITA 4369/DEL/2015

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1215 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 06-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Keywords: Search and seizure; Initiation of penalty proceedings
• Section: 271(1)(c); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: F , NEW DELHI BEFORE SMT. BEENA A PILLAI, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 4 3 6 9 /DEL/201 5 AY: 201 2 - 13 S MT . KAMLESH GARG 28, SAINI ENCLAVE NEW DELHI 110 092 PAN: AAOPG3513C VS. DY.CIT, CENTRAL CIRCLE 03 NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. C.S.ANAND, ADV. DEPARTMENT BY : S H. SURENDER PAL, SR. D.R. DATE OF HEARING : 08/11/2018 DATE OF PRONOUNCEMENT : 28 /11/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER T HE PRESENT PENALTY APPEAL HAS BEEN FILED BY ASSESSEE AGAINST ORDER DATED 13/05/15 PASSED BY LD.CIT(A) - 25, NEW DELHI FOR A SSESSMENT Y EAR 2012 - 13 ON FOLLOWING GROUNDS OF APPEAL: THAT ON THE FACTS OF THE CASE AND UNDER THE LAW, THE LD.CIT(A) HAS ERRED IN CON FIRMING THE PENALTY OF RS.1,62,226/ - , WHICH WAS LEVIED BY THE LD.AO U/S 271(1)(C) IN CONSEQUENCE TO THE ADDITION OF RS.5,25,000/ - MADE WHILE PRESUMING THAT THE ASSESSEE HAD PAID SUCH AMOUNT FOR PURCHASE OF LIFT, FREIGHT & INSTALLATION OUT OF UNEXPLAINED CA SH. NOTE: THE ASSESSEE CRAVES LEAVE TO AMEND/MODIFY THE AFORE MENTIONED GROUND OF APPEAL AND/OR TO RAISE ADDITIONAL GROUND(S) OF APPEAL, AT ANY TIME PRIOR TO OR DURING THE COURSE OF APPELLATE PROCEEDINGS. ITA 4369/DEL/2015 A.Y. - 2012 - 13 S MT . KAMLESH GARG 2 ASSESSEE HAD ALSO RAISED FOLLOWING ADDITIONAL GR OUND WHICH HAS BEEN ADMITTED BY THIS T RIBUNAL BY WAY OF AN INTERIM ORDER PASSED ON 07/08/18: THAT INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) FOR A.Y. 2012 - 13 IN THE CASE OF THE ASSESSEE (WHERE SEARCH & SEIZURE OPERATION U/S 132 WAS CARRIED OUT ON 15. 06.2011) WAS MISCONCEIVED, AND THUS THE PENALTY ORDER PASSED BY THE LD.AO ON 29.09.2014 U/S 271(1)(C) IS LIABLE TO BE QUASHED/ANNULLED. 2. BRIEF FACTS OF THE CASE ARE AS UNDER : A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 (1) OF THE ACT, 1961 WAS CARRIED OUT ON 15/06/11 AT BUSINESS AND RESIDENTIAL PREMISES OF ASSESSEE. CASE OF ASSESSEE WAS CENTRALISED AND NOTICE UNDER SECTION 142 (1) OF THE A CT WAS ISSUED , CALLING FOR FURNISHING RETURN OF INCOME. IN RESPONSE TO THE SAME , ASSESSEE FILED LE TTER DATED 11/12/12 ALONG WITH THE COPY OF ORIGINAL RETURN OF INCOME , WHEREIN INCOME OF RS.11,58,326/ - WAS DECLARED. THEREAFTER NOTICE UNDER SECTION 143 (2)/142 (1) ALONG WITH QUESTIONNAIRE WAS ISSUED TO ASSESSEE. IN RESPONSE TO STATUTORY NOTICES , REPR ESENTATIVE OF ASSESSEE APPEARED BEFORE LD. AO AND FILED VARIOUS DETAILS AS CALLED FOR. 3 . LD.AO OBSERVED THAT ASSESSEE DECLARED INCOME UNDER THE HEAD SA LARY , FROM M/S SAM INDIA BUILTWELL PVT.LTD., M/S SACHIN ENTERPRISES AND M/S. S.C. INDUSTRIES LTD. ASSESSEE ALSO HAD I NCOME FROM O THER S OURCES . DURING COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED AT CORPORATE OFFICE , VARIOUS DOCUMENTS WERE SEIZED BELONGING TO ASSESSEE , WHEREIN THERE WAS INVOICE ISSUED TO ASSESSEE BY M/S ESHA E LE VATORS PVT. LTD., FOR ONE UNIT ELEVATOR COSTING RS.3,30,041/ - , ON WHICH EXCISE DUTY @ 10.3 0 % AND VAT @ 14% HAS BEEN CHARGED , TOTALLING TO ITA 4369/DEL/2015 A.Y. - 2012 - 13 S MT . KAMLESH GARG 3 RS.4,15,000/ - . ANOTHER DOCUMENT : PAGE NO. 21 , WAS ALSO SEIZED , W HEREIN CALCULATION OF TOTAL PAYMENT MADE FOR PURCHASE OF ELEVATOR WAS MADE. LD.AO ON PERUSAL OF PAGE 21 WAS OF OPINION THAT EXPENSES TO INSTALL L I FT HAVE BEEN MADE PARTIALLY BY WAY OF CHE QUE AND PARTIALLY IN CASH. IT WAS HELD BY LD.AO THAT SUM OF RS.4,65,0 00/ - WAS TO BE PAID IN CASH FOR PURCHASE OF L I FT , WHEREIN A SUM OF RS.2,15,000/ - WAS DUE FOR PAYMENT. ASSESSEE WAS ASKED TO EXPLAIN SOURCE OF CASH. DIS SATISFIED WITH EXPLANATION PROVIDED BY ASSESSEE, LD.AO MADE ADDITION OF RS.4,65,000/ - FROM UNDISCLOSED SOURCES , AND INITIATED PENALTY UNDER SECTION 271 (1) (C ) OF THE A CT. 4. A DDITIONAL GROUND RAISED BY ASSESSEE IS IN RESPECT OF VALIDITY OF INITIATION OF PROCEEDINGS UNDER SECTION 271 (1) (C ) OF THE A CT , MORE PARTICULARLY WHEN SEARCH AND SEIZURE ACTI ON HAS TAKEN PLACE IN CASE OF ASSESSEE. 5. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SIDES. 6. ADMITTEDLY SEARCH AND SEIZURE ACTION WAS CARRIED OUT ON 15/06/11. ON PERUSAL OF PENALTY PROVISIONS UNDER I NCOME T AX A CT, THERE IS SPECIFIC SECTION 271 AAA, FOR LEVY OF PENALTY , WHERE SEARCH HAS BEEN INITIATED ON OR AFTER 01/06/07 BUT BEFORE 01/07/12. 6.1. A S DATE OF SEARCH IN PRESENT CASE FALLS BETWEEN 01/06/07 TO 01/07/12, IN OUR CONSIDERED OPINION, LD. A.O. SHOULD HAVE INITIATED PENALTY UNDER SECTION 2 71AAA INSTEAD OF SECTION 271 (1) ( C ) OF THE A CT. 6.2. WE ACCORDINGLY ALLOW ADDITIONAL GROUND RAISED BY ASSESSEE , THEREBY HOLDING PENALTY PROCEEDINGS INITIATED TO BE NOT IN ACCORDANCE WITH LAW. WE THUS QUASH PENALTY PROCEEDINGS. ITA 4369/DEL/2015 A.Y. - 2012 - 13 S MT . KAMLESH GARG 4 7. AS WE HAVE QUASHED PENALTY PROCEEDINGS, GROUND RAISED BY ASSESSEE ON MERITS BECOMES PURELY ACADEMIC IN NATURE. 8. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 / 1 1 / 2 0 1 8 . S D / - S D / - ( PRASHANT MAHARISHI) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 2 8 T H NOVEMBER, 2018 GMV COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA 4369/DEL/2015 A.Y. - 2012 - 13 S MT . KAMLESH GARG 5 DATE DRAFT DICTATED ON 28/11/18 DRAFT PLACED BEFORE AUTHOR 28.11.18 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS KEPT FOR PRONOUNCEMENT ON & ORDER UPLOADED ON : FILE SENT TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.