DCIT, Chandigarh V. M/s B.L. Mehta Construction Pvt. Ltd., Chandigarh

ITA 456/CHANDI/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5079 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-11-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 27-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Search and seizure; Opportunity of being heard
• Section: 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO.456/CHD/2015 ASSESSMENT YEAR: 2011-12 THE DCIT VS. M/S B.L. MEHTA CONSTRUCTION PVT. L TD. CENTRAL CIRCLE I # 3205, SECTOR 21-D CHANDIGARH CHANDIGARH PAN NO. AACCB5332P (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. T.N. SINGLA REVENUE BY : SH. S.K. MITTAL DATE OF HEARING : 29/06/2017 DATE OF PRONOUNCEMENT : 05/07/2017 ORDER PER B.R.R. KUMAR A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE LD. PR. CIT(OSD), GURGAON DT. 09/02/2015 ON THE FOLLOWING G ROUNDS: I. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ENTIRE PENALTY LEVIED U/S 271 AAA DESPITE THE FACT THAT THE ASSESSEE WAS GIVEN APPROPRIATE OPPORTUNITY OF BEING HEARD ? II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE LD. CIT(A) WAS RIGHT IN GRANTING RELIEF TO THE ASSESSEE IN A C ASE WHERE BASIC REQUIREMENT OF THE SECTION 271AAA ARE NOT FULFILLED I.E. THE ASSES SEE FAILED TO ELABORATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. ? 2. BRIEF FACTS OF THE CASE ARE THAT THE SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE INCOME TAX ACT 1961 WAS CARRIED OUT IN THE CASE OF M/S B.L. MEHTA CONSTRUCTIONS PRIVATE LTD. ON 18/02/2011. THE ASSESSEE HAS FILED RETURN OF INCOME FOR AY 2010-11 DECLARING INCOME AT RS. 26,50 ,000/-. POST ASSESSMENT PENALTY PROCEEDING UNDER SECTION 271AAA WERE INITIA TED LEVYING PENALTY OF RS. 26,50,000/- VIDE PENALTY ORDER DT. 19/09/2013. 3. BEING AGGRIEVED WITH THE AFORESAID PENALTY ORDER THE ASSESEE WENT IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE PE NALTY AND ALLOWED THE APPEAL OF THE ASSESSEE. 4. AGGRIEVED THE REVENUE FILED THE PRESENT APPEAL B EFORE THE TRIBUNAL AGAINST THE IMPUGNED ORDER. AT THE TIME OF HEARING LD. DR RELIED UPON THE ORDER 2 OF THE AO AND REITERATED THE CONTENTION RAISED BY T HE REVENUE ON THE GROUND AND REQUEST THAT THE PENALTY IN DISPUTE IMPOSED BY THE AO MAY BE SUSTAINED. ON THE CONTRARY DURING THE HEARING LD. AR OF THE AS SESSEE STATED THAT THE LD. CIT(A) HAD DELETED THE PENALTY IN DISPUTE BY FOLLOW ING VARIOUS ITAT ORDERS. HE FURTHER STATED THAT THE ISSUE IN DISPUTE IS ALSO CO VERED BY VARIOUS DECISIONS RENDERED BY THE ITAT AS MENTIONED IN THE ORDER OF T HE LD. CIT(A) AT PARA 5 AND REFERRED THAT THE ORDER OF THE LD. CIT(A) MAY BE UP HELD AND REVENUE APPEAL MAY BE DISMISSED. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORD AVAILABLE WITH US SPECIALLY THE IMPUGNED ORDER PASS ED BY THE LD. CIT(A). LD. CIT(A) HAS DISCUSSED THE ISSUE IN DISPUTE BY CONSID ERING THE SUBMISSION OF THE ASSESSEE AND ADJUDICATE THE ISSUE IN DISPUTE VIDE P ARA NO. 5 OF THE ORDER. THE RELEVANT PARA OF THE IMPUGNED ORDER ARE REPRODUCED HEREUNDER: 5. I HAVE CONSIDERED THE ASSESSEES SUBMISSIONS AS WELL AS THE IMPUGNED ORDER. IT IS THE CASE OF THE AO THAT THE MANNER IN WHICH THE INCOME WAS DERIVED WAS NEITHER SPECIFIED NOR SUBSTANTIATED. THE CONTEN TION THAT THE DUE TAX STOOD PAID ON THE ADDITIONAL INCOME SURRENDERED WHICH WAS EARNED FROM CIVIL CONSTRUCTION / BUSINESS ACTIVITY WAS HELD NOT SUFFI CIENT, THEREBY PERSUADING THE AO TO HOLD THAT THE ASSESSEE DID NOT FULFILL ALL THE C ONDITIONS AS LAID DOWN IN SECTION 271AAA. CONSEQUENTLY HE PROCEEDED TO LEVY THE PENAL TY OF RS. 26,50,000/-. BEFORE ME, THE ASSESSEE REITERATED THAT THE SURREND ERED AMOUNT WAS ADMITTED UNDER SECTION 132(4), TAXES DULY PAID AND THAT THE SAME WAS ALSO ACCEPTED BY THE AO. IT WAS ALSO SUBMITTED THAT NO SPECIFIC QUES TION ON THE MANNER AND SOURCE OF THE SURRENDERED INCOME WAS ASKED IN THE COURSE O F SEARCH. IN THE WORDS, IT IS ASSESSEES CONTENTION THAT HE FULFILLED ALL THREE C ONDITIONS AS LAID DOWN IN SUB SECTION (2) OF SECTION 271AAA. HE HAS ALSO RELIED O N VARIOUS JUDGMENTS; INCLUDING THAT OF THE HONBLE ITAT CHANDIGARH IN THE CASE OF MUNISH KUMAR GOYAL IN ITA NO. 1003/CHD/2013 AND THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CROSSINGS INFRASTRUCTURE LTD. VS. CIT(C) REPORTED IN 222 TAXM ANN 26. IT IS NOT IN DISPUTE THAT ADDITIONAL INCOME OF RS. 2.65 CRORE WAS SURRENDERED BY THE ASSESSEE U/S 132(4); TAXES PAID THEREON AND THE RET URN INCLUSIVE OF THE SURRENDER WAS ACCEPTED BY THE AO AS NO ADVERSE INFERENCE WAS DRAWN EXCEPT FOR HOLDING THAT THE SAME WAS NOT SUBSTANTIATED AND THAT ONLY B IFURCATION WAS PROVIDED BY THE ASSESSEE. I FIND THAT THE FACTS OF THE CASE AT HAND IS COVERED BY THE VARIOUS DECISIONS, INCLUDING THAT OF THE JURISDICTIONAL HON BLE CHANDIGARH BENCH OF THE TRIBUNAL VIZ ACIT VS. MUNISH KUMAR GOYAL REPORTED I N 45 TAXMANN. COM 563; ACIT.CC. PATIALA VS. GIAN CHAND GUPTA/ MOHINDER GUP TA/SANJAY KUMAR GUPTA IN ITA NOS. 1005/1006/1007/CHD/2013; DCIT CENTRAL C IRCLE-2, CHANDIGARH VS. AMARJIT GOYAL, ADITYA GOYAL, KRISHAN KUMAR GOYAL (I TA NO. 1080, 1081, 1082/2013). THE HONBLE ALLAHABAD HIGH COURT HAS ALSO DECIDED S IMILAR ISSUE IN FAVOUR OF THE ASSESSEE. THUS WITHOUT MUCH ELABORATION, RESPECTFUL LY FOLLOWING THE CASES CITED, THE PENALTY LEVIED OF RS. 26,50,000/- IS DIRECTED T O BE DELETED. 6. IN THE INSTANT CASE THE ASSESSEE HAS SUBMITTED B EFORE THE AO THAT THE INCOME WAS EARNED FROM THE CIVIL CONSTRUCTION / BUS INESS ACTIVITIES OF THE COMPANY AND TAXES HAVE BEEN DULY PAID FOR THE AY 20 11-12. SECTION 271AAA READS AS UNDER: THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHER E SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE SHALL PAY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY PAYABLE BY HIM A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. 3 (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE: (I) IN THE COURSE OF SEARCH, IN A STATEMENT UNDER S UB SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOJM HAS BEEN DERIVED. (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED; (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME IT WOULD BE RELEVANT TO MENTION HERE THAT THE EXPLA NATION FILED TO SECTION 271(1) (C) PROVIDED THAT NO PENALTY CAN BE LEVIED IN RESPE CT OF UNDISCLOSED INCOME IN A CASE WHERE THE APPELLANT SPECIFIES THE MANNER IN WHICH THE INCOME HAS BEEN DERIVED AND PAYS TAX TOGETHER WITH INTEREST ON SUCH INCOME. AS SUCH EXPLANATION 5 TO SECTION 271(1)(C) AND SECTION 271A AA BEING PARAMATERIAL. THE ASSESSEE IS COVERED WITH EQUAL FORCE TO THE RELEVAN T PROVISION. KEEPING IN VIEW THE JUDGMENTS OF THE COORDINATE BENCH OF ITAT CHAND IGARH IN CASE OF DCIT VS. SH. SANJEEV GOYAL IN ITA NO. 109/CHD/2015, DCIT VS. M/S PARABOLIC DRUGS LTD. IN ITA NO. 108/CHD/2015, THE DCIT VS. SMT. PAYAL GOYAL IN ITA NO. 110/CHD/2015, MANOHAR INFRASTRUCTURE AND CONSTRUCTION PVT. LTD. V S. DCIT [2016] 48 CCH 0178 CHD TRIB. AND IN CASE OF ACIT VS. SUSHIL KUMAR GUPT A IN ITA NOS. 3856 & 3857/DEL/2013. AFTER GOING THROUGH THE ORDER OF THE VARIOUS TRIBUNAL RELIED UPON BY THE LD. CIT(A) WE ARE OF THE VIEW THAT NO INTERF ERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A). THUS PENALTY LEVIED BY THE AO ST ANDS DELETED. 7. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (B.R.R.KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED : AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR