MITTAL GRANITE PVT. LTD., Jaipur V. DCIT, Jaipur

ITA 563/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5312 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 21-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA JCIT DHK
• Section: 133A; 153A; 132

Judgement Text

JH VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.563 TO 565/JP/14 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07, 2007-08 & 2008-09 M/S MITTAL GRANITE PVT. LTD., A- 301,ROAD N0. 15, VKI AREA, JAIPUR CUKE VS. THE DY. CIT, CENTRAL CIRCLE-3, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCM 6234 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : VIJAY GOYAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : ROSHANTA MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/05/2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 13/05/2016 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THESE ARE THREE APPEALS FILED BY THE ASSESSEE AGAIN ST THE ORDER OF LD. CIT(A), CENTRAL, JAIPUR OF EVEN DATE I.E, 16.07.201 4 WHEREIN THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: IN A.Y. 2006-07 (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) CENTRAL, ERRED IN CONFIRMING THE PENALTY OF RS. 3,34,917/- IMPOSED BY THE LD. AO U/S 271(1)(C) OF THE IT ACT, 1961 BY TREATING THE ADDITIONAL INCOME OF RS. 9,94,998/- SURRENDERED BY THE ASSESSEE AS CONCEALED INCOME AND LOWER AUTHORITIES HAVE FURTHE R ERRED IN APPLYING THE PROVISIONS OF EXPLANATION 5A TO SECTIO N271(1)(C) OF IT ACT ITA NOS. 563, 564 & 565/JP/14 M/S MITTAL GRANITE PVT. LTD. JAIPUR VS. DCIT, CENTR AL CIRCLE-3, JAIPUR 2 IN LEVY/CONFIRMING THE PENALTY MORE SO WHEN DEPARTM ENT HAS NOT CARRIED OUT SEARCH OPERATIONS OVER THE ASSESSEE U/S 132(1) OF IT ACT BUT SURVEY U/S 133A OF IT ACT. (II) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN NO T APPRECIATING THAT THE ASSESSMENT ORDER PASSED BY THE AO U/S 153A R.W. S.143(3) OF IT ACT WAS BAD IN LAW AND INVALID AND LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE INITIATION OF PENALTY U/S 271( 1)(C) OF IT ACT WAS VOID AB INITIO AND HENCE PENALTY ORDER WAS INVALID. IN A.Y. 2007-08 (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) CENTRAL, ERRED IN CONFIRMING THE PENALTY OF RS. 8,34,945/- IMPOSED BY THE LD. AO U/S 271(1)(C) OF THE IT ACT, 1961 BY TREATING THE ADDITIONAL INCOME OF RS. 24,80,526/- SURRENDERED B Y THE ASSESSEE AS CONCEALED INCOME AND LOWER AUTHORITIES HAVE FURTHE R ERRED IN APPLYING THE PROVISIONS OF EXPLANATION 5A TO SECTIO N271(1)(C) OF IT ACT IN LEVY/CONFIRMING THE PENALTY MORE SO WHEN DEPARTM ENT HAS NOT CARRIED OUT SEARCH OPERATIONS OVER THE ASSESSEE U/S 132(1) OF IT ACT BUT SURVEY U/S 133A OF IT ACT. (II) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN NO T APPRECIATING THAT THE ASSESSMENT ORDER PASSED BY THE AO U/S 153A R.W. S.143(3) OF IT ACT WAS BAD IN LAW AND INVALID AND LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE INITIATION OF PENALTY U/S 271( 1)(C) OF IT ACT WAS VOID AB INITIO AND HENCE PENALTY ORDER WAS INVALID. IN A.Y. 2008-09 (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) CENTRAL, ERRED IN CONFIRMING THE PENALTY OF RS. 1,72,194/- IMPOSED BY THE LD. AO U/S 271(1)(C) OF THE IT ACT, 1961 BY TREATING THE ADDITIONAL INCOME OF RS. 5,57,264/- SURRENDERED BY THE ASSESSEE AS CONCEALED INCOME AND LOWER AUTHORITIES HAVE FURTHE R ERRED IN APPLYING THE PROVISIONS OF EXPLANATION 5A TO SECTIO N 271(1)(C) OF IT ACT IN LEVY/CONFIRMING THE PENALTY MORE SO WHEN DEPARTM ENT HAS NOT CARRIED OUT SEARCH OPERATIONS OVER THE ASSESSEE U/S 132(1) OF IT ACT BUT SURVEY U/S 133A OF IT ACT. ITA NOS. 563, 564 & 565/JP/14 M/S MITTAL GRANITE PVT. LTD. JAIPUR VS. DCIT, CENTR AL CIRCLE-3, JAIPUR 3 (II) THE LD. CIT(A) HAS ERRED IN LAW AND IN FACTS IN NO T APPRECIATING THAT THE ASSESSMENT ORDER PASSED BY THE AO U/S 153A R.W. S.143(3) OF IT ACT WAS BAD IN LAW AND INVALID AND LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT THE INITIATION OF PENALTY U/S 271(1)(C) OF IT ACT WAS VOID AB INITIO AND HENCE PENALTY ORDER WAS INVALID. 2. AT THE OUTSET, THE LD AR SUBMITTED THAT THE APPE AL OF THE ASSESSEE IN QUANTUM PROCEEDINGS FOR A.Y. 2003-04 TO 2009-10 HAV E BEEN DECIDED BY THE HONBLE ITAT, JAIPUR BENCH VIDE ITS ORDER IN ITA NO S. 761,1016, 762, 1017, 1018, 2019 & 1020/JP/2013 DATED 16.03.2016 WHEREIN THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT HAVE BEEN HELD TO B E BAD IN LAW. IT WAS FURTHER SUBMITTED THAT IN ABSENCE OF VALID ASSESSME NT PROCEEDINGS, THE LEVY OF PENALTY U/S 271(1)(C) DOESNT ARISE AND HENCE, IT W AS PLEADED THAT THE IMPUNGED PENALTY ORDER SHOULD BE HELD INVALID AND B E QUASHED. 2.1 THE RELEVANT FINDINGS OF THE COORDINATE BENCH I N ITS ORDER DATED 16.3.2016 IS REPRODUCED AS UNDER: IN VIEW OF THE FOREGOING WE ARE OF THE VIEW THAT THERE BEING NO VALID EXECUTION OF SEARCH AUTHORISATION ON ASSESSEE IN TE RMS OF SEC. 132 AND THERE BEING ONLY VALID SURVEY PROCEEDINGS, NO ASSESSMENT CAN BE FRAMED U/S 153A BY AO. THE PLEA OF THE DEPARTMENT THAT A HARMONIOUS C ONSTRUCTION OF RECORD AND PROVISIONS SHALL BE MADE WHICH IS AN IMPLIED REFERE NCE TO SECTION 292B ALSO CANNOT BE ACCEPTED. THIS IS SO BECAUSE JURISDICTION AL ERRORS CANNOT BE CURED BY SUCH INDIRECT MEANS. A SEARCH ON DIRECTOR CANNOT B E DEEMED TO BE A SEARCH ON DISTINCT AND SEPARATE INCORPORATED ENTITY I.E. COMP ANY. SINCE ASSESSMENT ARE BAD IN LAW ANY ADMISSION ON UNDISCLOSED INCOME BY DIRECTOR CANNOT BE MAKE ANY RELEVANCE. CONSEQUENTLY WE HOLD THAT THE IMPUG NED ASSESSMENT FRAMED U/S 153A ARE BAD IN LAW NOT BEING IN CONSEQUENCE TO PROVISIONS OF SECTION 132. 2.2 IN VIEW OF THE DECISION OF THE COORDINATE BENCH (SUPRA) WHERE THE ASSESSMENT ORDERS PASSED U/S 153A ARE HELD TO BE BA D IN LAW, THE VERY BASIS ITA NOS. 563, 564 & 565/JP/14 M/S MITTAL GRANITE PVT. LTD. JAIPUR VS. DCIT, CENTR AL CIRCLE-3, JAIPUR 4 AND FOUNDATION OF LEVY OF PENALTY DOESNT SURVIVE. HENCE, THE PENALTY LEVIED UNDER THE IMPUNGED ORDERS FOR ALL THE THREE YEARS A RE HEREBY DELETED. IN THE RESULT, THE APPEALS FOR ALL THREE YEARS FIL ED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /0 5/2016. SD/- SD/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 13 / 05/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S. MITTAL GRANITE PVT. LTD. JA IPUR 2. THE RESPONDENT- THE DY. CIT, CENTRAL CIRCLE-3, JAIPUR 3. THE CIT(A) CENTRAL, JAIPUR 4. THE CIT- CENTRAL, JAIPUR 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 563, 564 & 565/JP/14 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR ITA NOS. 563, 564 & 565/JP/14 M/S MITTAL GRANITE PVT. LTD. JAIPUR VS. DCIT, CENTR AL CIRCLE-3, JAIPUR 5