PARAS PORWAL (HUF), MUMBAI V. ACIT CIR 47, MUMBAI

ITA 5688/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9644 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 21-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN KUMAR
• Keywords: Search and seizure; Opportunity of being heard
• Section: 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI D T GARASIA, JUDICIAL MEMBER & SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER ITA NO.5688/MUM/2016 ASSESSMENT YEAR : 2011-12 PARAS PORWAL (HUF) B-2101, SHANTI KAMAL CHS, DR. B A ROAD, CHINCHPOKLI, MUMBAI 400 012 PAN AAEHP7036D VS THE ACIT CIR CLE 47 MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DARSHAN GANDHI RESPONDENT BY : SHRI SUMAN KUMAR DATE OF HEARING : 1 0 .0 8 .2017 DATE OF PRONOUNCEMENT : 22 .0 9 .2017 O R D E R PER D T GARASIA, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)- 50, MUMBAI, DATED 16.06.2016, RELATING TO ASSESSMEN T YEAR 2011-12. 2. THE ONLY GROUND RAISED IN THIS APPEAL READS AS U NDER: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW , THE LD.CIT(A) ERRED IN CONFIRMING THE PENALTY OF ` .92,700/- LEVIED BY THE LD. ASSESSING OFFICER U/S. 271AAA OF THE INCOME TAX ACT , 1961 WITHOUT APPRECIATING FACTS IN THE APPELLANTS CASE IN THE RI GHT LEGAL PERSPECTIVES & ALSO WITHOUT AFFORDING REAL AND REAS ONABLE OPPORTUNITY TO THE APPELLANT. ITA NO5688/MUM/2016 PARAS PORWAL (HUF) 2 3. THE SHORT FACTS OF THE CASE ARE AS UNDER: A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CARRIED OUT IN THE BUSINESS PREMISE OF ROHAN GROUP TO WHICH ASSESSEE I S RELATED. THE ASSESSEE FILED ITS RETURN OF INCOME U/S. 139 ON 26.09.2011 D ECLARING INCOME OF ` .27,77,530/-. SUBSEQUENTLY, NOTICE U/S. 153C WAS IS SUED AND SERVED ON THE ASSESSEE. IN RESPONSE TO THE SAID NOTICE, THE ASSE SSEE FILED RETURN ON 24.12.2013, DECLARING TOTAL INCOME OF ` 36,79,020/- THUS, THE ASSESSEE OFFERED ADDITIONAL INCOME OF ` 9,01,490/- UNDER THE HEAD INCOME FROM OTHER SOURCES. HOWEVER, AS THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION REGARDING THE SOURCE OF EXPENDITURE OF ` 9,00,000/-, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S. 271AAA, HOLDING IT TO BE UNDISCLOSED INCOME OF THE ASSESSEE. ON APPEAL, THE CIT(A) CONFI RMED THE PENALTY ORDER U/S. 271AAA PASSED BY THE ASSESSING OFFICER. 4. THE LEARNED AR SUBMITTED THAT THE ASSESSEE IS TH E KARTA OF HUF AND HE WAS DIRECTOR IN OM SHANTI GROUP COMPANIES. A SEARC H AND SEIZURE ACTION WAS CONDUCTED ON OM SHANTI UNIVERSAL GROUP COMPANIE S ON 26.05.2011. DURING THE SEARCH CERTAIN INCRIMINATING MATERIAL WA S FOUND RELATING TO THE ASSESSEE HUF AND ACCORDINGLY NOTICE U/S. 153C WAS I SSUED ON THE ASSESSEE. IT WAS FURTHER CONTENDED THAT AS PER SECTION 271AAA PENALTY CAN BE LEVIED ON THE SEARCH PERSON ONLY. THEREFORE INITIATION OF AC TION U/S. 271AAA WAS COMPLETELY WITHOUT JURISDICTION. THE SECOND CONTEN TION OF THE ASSESSEE IS ITA NO5688/MUM/2016 PARAS PORWAL (HUF) 3 THAT THE ASSESSING OFFICER HAS NOT CLARIFIED WHETHE R THE PENALTY IS FOR CONCEALMENT OF INCOME OR FOR FILING INACCURATE PART ICULARS OF INCOME. HE FURTHER CONTENDED THAT BEFORE CONFIRMING PENALTY, T HE ASSESSEE WAS NOT GIVEN OPPORTUNITY OF HEARING, WHICH IS REQUIRED AS PER SE CTION 271AAA R.W.S. 274 OF THE ACT AND, THEREFORE, THE PENALTY MAY BE DELETED. THE LEARNED AR FURTHER PLACED HIS RELIANCE ON THE ORDER DATED 5 TH FEBRUARY 2016, OF THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. SAM INDIA ABHI MANYU HOUSING IN ITA NO.1257/DEL2015 FOR A.Y. 2011-12 AND SUBMITTED THAT PENALTY PROCEEDINGS UNDER SECTION 271AAA CAN BE INITIATED WHEN THE SEAR CH HAS BEEN CONDUCTED U/S. 132 OF THE ACT. IN THIS CASE THE SEARCH HAD B EEN NOT BEEN CONDUCTED IN THE CASE OF THE ASSESSEE AND, THEREFORE, THE PENALT Y MAY BE DELETED. 5. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IT IS A CASE OF THE ASSESSEE THAT IT WAS NEVER SEARCHED, ITS STATEMENT WAS NEVER RECORDED AN D IT WAS NOT GIVEN OPPORTUNITY OF BEING HEARD BEFORE PASSING THE PENAL TY ORDER. WE HAVE GONE THROUGH THE PENALTY ORDER AND WE FIND THAT NOTICE D ATED 28.03.2014 AND 26.08.2014 WERE ISSUED BEFORE PASSING THE PENALTY O RDER AND, THEREFORE, IN THE INTEREST OF JUSTICE AND FAIR PLAY RESTORE THIS ISSUE TO THE FILE OF THE CIT(A). MOREOVER, THE ASSESSEE HAS ALSO TAKEN THE CONTENTIO N THAT THE ASSESSEE WAS ITA NO5688/MUM/2016 PARAS PORWAL (HUF) 4 NOT SEARCHED AND NO STATEMENT OF THE ASSESSEE WAS R ECORDED AS A HUF OF PARAS PORWAL. THUS, THE CIT(A) HAS NOT DEALT WITH THE ISSUE IN DETAIL. WE RESTORE THE ISSUE TO THE FILE OF THE CIT(A) WITH A DIRECTION TO DECIDE THE ISSUE AFRESH AFTER DUE VERIFICATION AND IN ACCORDANCE WIT H LAW. HE SHALL ALSO PROVIDE THE ASSESSEE ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND DAY OF SEPTEMBER, 2017. SD/- SD/- (MANOJ KUMAR AGGARWAL) (D T GARASIA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 22 ND SEPTEMBER, 2017 SA COPY OF THE ORDER FORWARDED TO : 1. THE APP ELL ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI 4. THE CIT 5. DR, B BENCH, ITAT, MUMBAI BY ORDER, #TRUE COPY # ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI