Skyline Construction & Housing Pvt. Ltd., Bangalore V. ACIT, Bangalore

ITA 663/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5281 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-05-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-05-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 29-06-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA
• Assessee Lawyers: B K MANJUNATH
• Keywords: Wrong claim; Revised return
• Section: 271(1)(c); 143(3); 133A; 153A; 80IB; 195; 250; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO. 663/BANG/2009 ASSESSMENT YEAR : 2005-06 M/S. SKYLINE CONSTRUCTIONS & HOUSING PVT. LTD., 11, HAYES ROAD, BANGALORE 560 001. : APPELLANT VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 12(3), BANGALORE. : RESPONDENT APPELLANT BY : SHRI B.K. MANJUNATH, C.A. RESPONDENT BY : SMT. V.S. SREELEKHA, ADDL. CIT(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE COMPANY IS DIRECTED AGA INST THE ORDER OF THE LD. CIT(A)-V, BANGALORE IN ITA NO: 29/70/ AC 12(3)/ CIT(A)-V/08-09 DATED: 9.4.2009, CONFIRMING THE ORDER OF THE AO U/S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 2005-06. INTENDMENT 2. THOUGH THE ASSESSEE COMPANY (THE ASSESSEE IN S HORT) HAS RAISED SIX GROUNDS IN AN EXHAUSTIVE AND ILLUSTRATIVE MANNE R, THE CRUX OF THE ISSUE IS CONFINED TO - ITA NO.663/BANG/09 PAGE 2 OF 10 THE CIT (A) ERRED IN SUSTAINING THE PENALTY OF RS. 34.53 LAKHS LEVIED BY THE AO U/S 271(1) (C ) OF THE ACT 3. BRIEFLY STATED, THE ASSESSEE COMPANY ENGAGED I N THE BUSINESS OF CONSTRUCTION AND REAL ESTATE FURNISHED ITS RETURN OF INCOME, ADMITTING BOOK PROFIT OF RS.1,48,93,506/- ON 28.10.05. SUBSEQUENT LY, THERE WAS AN ACTION U/S 133A OF THE ACT IN THE PREMISES OF THE ASSESSEE ON 13.9.06. ON VERIFICATION OF DOCUMENTS, THERE WAS VIOLATION IN T HE PROVISIONS OF S.80IB(10) OF THE ACT THAT - - THE ASSESSEE CONSTRUCTED SIX PENT-HOUSES IN THE TOW ER BLOCK PROJECT WHOSE BUILT-UP AREA WAS MORE THAN 1500/SFT WHICH WE RE CONFIRMED ON ACTUAL MEASUREMENTS; - DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS REQUIRED TO FURNISH A COPY OF THE SANCTIONED PLAN O F SKYLINE TOWER PROJECT AS APPROVED BY THE LOCAL AUTHORITIES FOR CO NSTRUCTION OF APARTMENT AS ENVISAGED U/S 80IB OF THE ACT; - INSTEAD OF FURNISHING A COPY OF THE SANCTIONED PLAN , THE ASSESSEE CAME UP WITH A PLEA OF ITS INABILITY TO DO SO, BUT, OPTED TO WITHDRAW THE SAID CLAIM U/S 80IB OF THE ACT DUE TO EXISTENCE OF CERTAIN IRREGULARITIES, AS POINTED OUT DURING THE COURSE OF SURVEY, IN SOME OF THE PENT HOUSES; - SUBSEQUENTLY, THE ASSESSEE FURNISHED A REVISED RETU RN OFFERING THE SAID INCOME (AS CLAIMED DEDUCTION IN THE ORIGINAL R ETURN) FOR TAXATION AND, THUS, WITHDREW THE CLAIM ORIGINALLY M ADE. 4. WHILE CONCLUDING THE ASSESSMENT BASED ON THE REV ISED RETURN, THE AO SIMULTANEOUSLY INITIATED PENAL PROCEEDINGS U/S 2 71(1)(C) OF THE ACT. 4.1. DURING THE COURSE OF PENAL PROCEEDINGS, THE A O, AFTER GIVING DUE WEIGHT-AGE TO THE FORCEFUL ARGUMENTS OF THE ASS ESSEE, HAD VIRTUALLY ITA NO.663/BANG/09 PAGE 3 OF 10 REJECTED THE CONTENTIONS OF THE ASSESSEE FOR THE DE TAILED REASONS SET-OUT IN THE PENALTY ORDER. 5. AGGRIEVED, THE ASSESSEE TOOK UP THE ISSUE BEFOR E THE LD. CIT A) FOR REDRESSAL. AFTER DUE CONSIDERATION OF THE A SSESSEES WELL- ORCHESTRATED CONTENTIONS BACKED WITH VARIOUS CASE L AWS TO SUPPORT ITS VIEW, THE LD. CIT (A) HAD OBSERVED, THE RELEVANT PORTION OF WHICH, ARE EXTRACTED IN A SUMMARIZED MANNER, FOR PROPER APPRECIATION OF THE FACTS, AS UNDER: (I) IT WAS A FACT THAT THE ASSESSEE WITHDREW THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT AND FILED A REVISED RETURN WITH A V IEW TO BUY PEACE AND TO AVOID PROTRACTED LITIGATION; - WHILE ACCEPTING THE REVISED RETURN, THE AO HAD MENT IONED THAT THE ASSESSEE OPTED TO WITHDRAW THE CLAIM OF DEDUCTION U /S 80IB DUE TO THE EXISTENCE OF CERTAIN IRREGULARITIES NOTICED IN SOME PENT HOUSES; - THE FINDING OF THE HONBLE JURISDICTIONAL HIGH COUR T IN THE CASE OF CIT V. NARASIMHA PRASAD REPORTED IN 250 ITR 852 WAS DISTINGUISHABLE; - THE LAW APPLICABLE IN THE CASE OF A REVISED RETURN WAS THAT AN ASSESSEE MAY FILE MORE THAN ONE RETURN. THE FIRST R ETURN MAY EITHER BE A REGULAR OR A BELATED RETURN. WHERE MORE THAN ONE REVISED RETURN IS PERMISSIBLE UNDER THE PRESENT RULE OF LAW AND THERE HAD BEEN INTERVENING CHANGES IN LAW, THE ISSUE MAY APPE AR TO BE COMPLEX. HOWEVER, THE VIEW GENERALLY TAKEN IS THAT THE DEFAULT SHOULD BE TREATED AS HAVING OCCURRED IN THE ORIGINA L RETURN THOUGH THE SAME DEFAULT MAY BE REPEATED IN THE REVISED RET URN RELIED ON THE RULING OF HONBLE SUPREME COURT IN CIT V. ONKAR SARAN & SONS (1992) 195 ITR 1; (II) THE FACT THAT WHETHER THE REVISED RETURN WOULD ABSO LVE THE OMISSION IN THE FIRST RETURN COULD WELL BE A QUESTI ON OF LAW. IN SUCH CASES, THE GENERAL VIEW IS THAT WHERE SUCH REV ISED RETURN IS PURELY VOLUNTARY, THERE COULD BE NO CASE OF PENALTY ; RELIES ON THE FOLLOWING CASE LAWS: (A) CIT V. AJAY DAL MILLS (2003) 263 ITR 66 (ALL) (B) CIT V. MOHD. MOHTRAM FAROOWQUI (2002) 177 CTR (RAJ) 434 ITA NO.663/BANG/09 PAGE 4 OF 10 (C) M.S.MOHSAMMED MARZOOK (LATE) (RPTD. BY L/H) & ANR. V. ITO (2006 ITR 254 (MAD) (D) RAVI & CO. V. ACIT (2004) 271 ITR 286 (MAD) (E) CIT V. DR.A.MOHD. ABDUL KHADIR (2003) 183 CTR (MAD) 543 (F) JYOTI LAXMAN KONKAR V. CIT (2007) 209 CTR (BOM) 5 (G) CIT V. T.ASHOK PAI (2007) 292 ITR 5 (KAR) (III) IN LIEU OF VARIOUS JUDICIAL PRONOUNCEMENTS, THE DEC ISIONS IN THE CASES OF CIT V. ONKAR SARAN & SONS (1992) 195 ITR 1 (SC) AND CIT V. T.ASHOK PAI 292 ITR 5 (KAR) ARE SQUARELY APP LICABLE TO THE CASE ON HAND. ACCORDINGLY, HE SUSTAINED THE PENALTY LEVIED BY THE AO. 6. AGITATED, THE ASSESSEE HAS COME UP BEFORE US WIT H THE PRESENT APPEAL. DURING THE COURSE OF HEARING, THE LD. A R R EITERATED MORE OR LESS WHAT HAS BEEN ADVOCATED BEFORE THE FIRST APPELLATE AUTHORITY. IN FURTHERANCE, IT WAS SUBMITTED THAT THERE WAS NEITHE R A CONCEALMENT OF INCOME WHATSOEVER NOR WAS THERE ANY WILLFUL ATTEMPT ON THE PART OF THE ASSESSEE TO FURNISH INACCURATE PARTICULARS WARRANTI NG LEVY OF PENALTY; THAT IT WAS DUE TO BONA FIDE BELIEF ON ITS PART AS TO THE E LIGIBILITY OF DEDUCTION U/S 80IB OF THE ACT IN RESPECT OF ONE OF THE HOUSING PR OJECTS UNDERTAKEN, VIZ., SKYLINE TOWER PROJECT WHEREIN DEDUCTION OF RS.94,36 ,900/- U/S 80IB WAS CLAIMED IN THE ORIGINAL RETURN. ON ACCOUNT OF THE CLAIM OF SAID DEDUCTION, THE INCOME ADMITTED IN THE RETURN OF INCOME WAS NIL , THAT CONSEQUENT UPON THE SURVEY OPERATIONS, THE ASSESSEE VOLUNTARILY UND ERTOOK TO WITHDRAW THE CLAIM IN RESPECT OF ONE OF THE HOUSING PROJECTS. H OWEVER, IT WAS SUBMITTED, THE AO LEVIED PENALTY AS PER HIS IMPUGNED ORDER WHI CH IS UNDER DISPUTE, ALLEGING THAT THE ASSESSEE HAD CONSCIOUSLY CLAIMED EXCESS DEDUCTION IN RESPECT OF ONE OF ITS HOUSING PROJECTS WHICH WAS FA CTUALLY INCORRECT. ITA NO.663/BANG/09 PAGE 5 OF 10 6.1. ON THE OTHER HAND, THE LD D R CAME UP WITH A S PIRITED ARGUMENT THAT THE ASSESSEE ITSELF HAD ADMITTED IN ITS COMMUNICATI ON DATED: 28.11.2006 TO THE AO [SOURCE: P 34 38 OF PB AR] TO THE EFFECT THAT 7.IT IS ALSO TO BE NOTED THAT YOUR HONOUR HAS VISITED ALL O UR ONGOING PROJECTS INCLUDING THE AFORESAID PROJECT AND PHYSICALLY MEAS URED AND ON SUCH VERIFICATION YOUR HONOUR ALSO WAS APPRAISED OF THE FACT THAT THE REQUIREMENTS OF SECTION 80IB(10) INCLUDING THE BUIL T-UP AREA HAVE BEEN COMPILED WITH BY US, THOUGH CERTAIN AGREEMENTS HAVE BEEN ENTERED WITH THE CUSTOMERS FOR A HIGHER AREA THAN THE LIMITS PRESCRI BED IT WAS, THEREFORE, VEHEMENTLY ARGUED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF ITS INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME WHEREBY IT HAD CONTRAVENED THE PROVISIONS OF S.271( 1)(C) OF THE ACT. THE ASSESSEES PLEA THAT WITH A VIEW TO AVOID PROTR ACTED LITIGATION AND TO BUY PEACE WITH THE DEPARTMENT, IT HAD WITHDRAWN THE CLAIM MADE U/S 80IB (10) OF THE ACT WILL NOT IN ANY WAY ABSOLVE ITSELF FOR HAVING CONCEALED THE PARTICULARS OF ITS INCOME AND FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT WAS, THEREFORE, PLEADED THAT THE STAND OF THE AU THORITIES BELOW IS ON THE SOUND FOOTING WHICH REQUIRES TO BE SUSTAINED . 6.2. IN THE MEANWHILE, THE LD. A R CAME UP WITH A SUBMISSION THAT THERE WAS A SEARCH ACTION U/S 132 OF THE ACT IN THE PREMI SES OF SKYLINE GROUP OF CASES ON 28.2.2008 AND AFTERMATH THE ASSESSMENT IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER DISPUTE (AY 2005-06 ) WAS CONCLUDED U/S 143(3) R.W.S. 153A OF THE ACT. HE HA D ALSO FURNISHED ITA NO.663/BANG/09 PAGE 6 OF 10 RELEVANT COPY OF THE ASSESSMENT ORDER AND CONNECTED DOCUMENTS FOR THE PERUSAL OF THIS BENCH. 6.3. ON A PERUSAL OF THE RELEVANT ASSESSMENT ORDER, IT EMERGES THAT (I) THERE WAS A SEARCH OPERATION U/S 132 OF THE ACT IN THE PREMISES OF SKYLINE GROUP OF CASES (THE PRESENT ASSESSEE) ON 28.2.2008 AND ACCORDING TO THE AO, SEVERAL BOOKS OF ACCOUNTS AND INCRIMINATING DOCUMENTS WERE SEIZED; (II) IN COMPLIANCE TO NOTICE U/S 153A OF THE ACT, T HE ASSESSEE HAD FURNISHED ITS RETURN OF INCOME AND ON THE BASIS OF WHICH AND ALSO ON THE STRENGTH OF INCRIMINATING DOCUMENTS ALLEGED TO HAVE BEEN UNEARTHED, THE ASSESSMENT WAS CONCLUDED U/S 143(3) R.W.S 153A OF THE ACT. WHILE DOING SO, THE AO HAD REJECTED TH E ASSESSEES CLAIM FOR ALLOWING DEDUCTION U/S 80 IB (10) OF THE ACT PROPORTIONATELY FOR THE REASONS SET OUT IN HIS ORDE R. PENAL PROCEEDINGS U/S 271(1)(C) OF THE ACT HAVE ALSO BEEN INITIATED SIMULTANEOUSLY; (III) AGAINST THE ORDER OF THE AO CONCLUDED U/S 143 (3) R.W.S. 153A OF THE ACT, THE ASSESSEE PREFERRED AN APPEAL BEFORE TH E FIRST APPELLATE AUTHORITY ON 28.01.2010 WHICH IS PENDING FOR DISPOSAL. 6.4. LET US HAVE A GLIMPSE OF RELEVANT PROVISIONS OF THE ACT. S.153A OF THE ACT SAYS : (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL- (A) . (B) . PROVIDED THAT . . ITA NO.663/BANG/09 PAGE 7 OF 10 PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT , IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SI X ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. 6.5. THE SCOPE AND EFFECT OF THE INSERTION (W.E.F. 1.6.2003) OF A NEW SECTION 153A OF THE ACT BY THE FINANCE ACT, 200 3, HAS BEEN ELABORATED IN THE FOLLOWING PORTION OF THE DEPARTMENTAL CIRCUL AR NO.7 OF 2003 DATED: 5.9.2003, AS UNDER: 65.5 THE ASSESSING OFFICER SHALL ASSESS OR REASSES S THE TOTAL INCOME OF EACH OF THESE SIX ASSESSMENT YEARS. ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A , AS THE CASE MAY BE, SHALL ABATE . IT IS CLARIFIED THAT THE APPEAL , REVISION OR RECTIFICATION PROCEEDINGS PENDING ON THE DATE OF IN ITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION SHALL NOT ABATE 6.6. TURNING TO THE PROVISIONS OF S. 80IB(10) OF THE ACT AS IT STOOD AS ON 31.3.2005 [AS AMENDED BY THE FINANCE ACT, 200 0, W.E.F. 1.4.2001 AND FINANCE ACT, 2003 W.E.F. 1.4.2002, READ AS UNDE R: (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKI NG DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 31 ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR F ROM SUCH HOUSING PROJECT IF:- (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOP MENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER TH E 1 ST DAY OF OCTOBER, 1998; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WHICH HAS A MINIMUM AREA OF ONE ACRE; AND ITA NO.663/BANG/09 PAGE 8 OF 10 (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP AREA OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE THOUSAND A ND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 6.7. IN THE ASSESSMENT PROCEEDINGS, IT WAS REVEAL ED THAT CONSEQUENT ON THE SURVEY OF THE ASSESSEES PREMISES, IT WAS FOUND THAT THERE WERE VIOLATIONS IN THE PROVISIONS OF S.80IB(10) OF THE A CT AS MUCH AS THE ASSESSEE CONSTRUCTED SIX PENT-HOUSES IN THE TOWER B LOCK PROJECT, THE BUILT- UP AREAS OF WHICH WERE MORE THAN 1500 SFT ON ACTUAL MEASUREMENTS UNDERTAKEN. SUBSEQUENTLY, THE ASSESSEE WAS REQUIR ED TO FURNISH A SANCTIONED PLAN OF THE SAID PROJECT BY THE LOCAL AU THORITIES. INSTEAD OF COMPLYING WITH THE AOS DIRECTION, THE ASSESSEE CAM E UP WITH A PLEA OF ITS INABILITY TO PRODUCE THE APPROVED PLAN AND OPTED TO WITHDRAW ITS CLAIM MADE U/S 80IB OF THE ACT. DURING THE COURSE OF PENAL PR OCEEDINGS TOO, THE ASSESSEE HAD, IN FACT, SIDE TRACKED THE MAIN ISSUE AND KEPT ON ARGUING THAT (I) THAT A DIFFERENT VIEW WAS ALSO POSSIBLE IN THE MATT ER OF ALLOWING DEDUCTION; (II) THAT THE ASSESSEE WITHDREW ITS CLAIM OF DEDUCTION D URING THE ASSESSMENT PROCEEDINGS IN ACCORDANCE WITH AN UNDER- TAKING GIVEN; (III) THAT THERE WAS NO CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS WITH A VIEW TO AVOID PAYMENT OF TAXES; (IV) THAT IT WAS ONLY CASE WHERE TWO VIEWS WERE POSSIBLE IN THE MATTER OF CLAIMING DEDUCTION U/S 80IB AND THE VIEW TAKEN BY THE ASSESSEE WAS NOT ACCEPTABLE TO THE DEPARTMENT; (V) THAT THE ADDITIONAL INCOME OFFERED DURING THE ASSES SMENT PROCEEDINGS AND AFTER SURVEY WAS NOT ON ACCOUNT OF ANY DISCOVERY OF FALSE CLAIM/DEDUCTION BY THE ASSESSEE; & (VI) THAT THE ADDITIONAL INCOME OFFERED CONSEQUENT TO SU RVEY WAS ONLY WITH A VIEW TO PURCHASE PEACE AND AVOID PROTRA CTED LITIGATION WITH THE DEPARTMENT ITA NO.663/BANG/09 PAGE 9 OF 10 6.8. ON A CAREFUL PERUSAL OF THE PENALTY ORDER WHIC H IS UNDER DISPUTE, IT IS PERTINENT TO MENTION HERE THAT THE AO HAD DEALT WIT H OTHER INSIGNIFICANT ISSUES AT A GREATER LENGTH WHEREAS THE MOOT QUESTIO N IS WHETHER THE ASSESSEE WAS TRYING TO CIRCUMVENT THE PROVISIONS OF S. 80IB(10) OF THE ACT IN ITS FAVOUR OR OTHERWISE? HOWEVER, THIS ASPECT HAS BEEN GIVEN A GO-BY . THE AO SHOULD HAVE EXPLICITLY BROUGHT ON RECORD TO JUSTIFY THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF ITS INCOME OR FURNISHED INACCURATE P ARTICULARS SUCH INCOME. 6.9. BEFORE US, MORE STRESS WAS MADE FOR THE WITHDR AWAL OF THE CLAIM WITH AN INTENTION TO PUT AN END TO PROTRACTED LITIG ATION WITH THE DEPARTMENT WITH REGARD TO THE INTERPRETATION OF THE TERMS OF SUPER BUILT-UP AREA AND THE ELIGIBILITY OF THE DEDUCTION U/S 80IB OF THE ACT. I T WAS, FURTHER, ARGUED THAT SINCE THE CASE WAS NOT A FIT FOR LEVY OF PENALTY U/ S 271 (1) (C) OF THE ACT, THE IMPUGNED PENALTY ORDER OF THE AO REQUIRES TO BE CAN CELLED. IN THE ALTERNATIVE, IT WAS SUBMITTED THAT IF THE PENALTY O RDER WERE TO BE SUSTAINED, IT WAS PLEADED THAT THE AO MAY BE DIRECTED TO LEVY PEN ALTY PROPORTIONATELY FOR THE ALLEGED PENT HOUSES EXCEEDED THE MAXIMUM BUILT UP AREA OF 1500 SFT. 6.10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMI SSIONS, DILIGENTLY PERUSED THE RELEVANT RECORDS AND ALSO THE DOCUMENTA RY EVIDENCES PRODUCED AND ALSO THE CASE LAWS ON WHICH THEY HAVE PLACED STRONG RELIANCE. IT WAS BROUGHT TO THE REFERENCE OF THIS BENCH THAT CONSEQUENT ON SEARCH OPERATION, THE ASSESSMENT FOR THE ASSESSMENT YEAR UNDER DISPUTE HAS BEEN CONCLUDED U/S 143(3) READ WITH S.153A OF T HE ACT AND SUBSEQUENTLY INITIATED PENALTY PROCEEDINGS U/S 271( 1)(C) OF THE ACT. ITA NO.663/BANG/09 PAGE 10 OF 10 HOWEVER, NEITHER IT COULD BE ASCERTAINED WHETHER TH E PENALTY PROCEEDINGS INITIATED HAVE BEEN CONCLUDED NOR THE S TATUS OF THE APPELLATE PROCEEDINGS. THE LD. A R HAD ALSO VEHEMENTLY PLEADED THAT IF THE PENALTY ORDER WERE TO BE SUSTAINED, THE AO BE D IRECTED TO RESTRICT THE PENALTY PROPORTIONATELY. 6.11. CONSIDERING THE PLEA OF THE LD. A. R AND IN THE INTEREST OF EQUITY, THE ISSUE IS REMITTED BACK ON THE FILE OF T HE AO WITH SPECIFIC DIRECTIONS TO LOOK INTO THE GRIEVANCE OF THE ASSESS EE AND TO TAKE APPROPRIATE ACTION IN ACCORDANCE WITH THE PROVISION S OF THE ACT AFTER AFFORDING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. 7. IN THE RESULT, THE ASSESSEES APPEAL IS PARTLY A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF MAY, 2010. SD/- SD/- ( GEORGE GEORGE K. ) (A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 14 TH MAY, 2010. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. C IT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE (1+1) BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.