M/s Kakade Construction Company, Pune V. ACIT, Pune

ITA 97/PUN/2013

• Counselvise Citation: 9724514 RSA 2013
• Duration Of Justice: 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 10-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH VERMA MS ANN KAPTHUAMA
• Keywords: Search and seizure; Wrong claim
• Section: 143(3); 80HHC; 153A; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NOS.97 AND 98/PN/2013 (ASSESSMENT YEARS 2003-04 AND 2004-05) M/S. KAKADE CONSTRUCTION COMPANY, KAKADE CAPITAL, 1205 BEHIND SHIROLE PETROL PUMP, NEAR P. JOG CLASSES OF J.M. ROAD, SHIVAJINAGAR, PUNE 411005. .. APPELLANT PAN NO.AABFK 7509F VS. ACIT CENTRAL CIRCLE 2(2), PUNE. .. RESPONDENT ASSESSEE BY : SRI SUNIL GANOO REVENUE BY : SRI MUKESH VERMA/ MS. ANN KAPTHUAMA DATE OF HEARING : 17-04-2013 DATE OF PRONOUNCEMENT : 30-04-2013 ORDER PER R.K. PANDA, AM : THE ABOVE 2 APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE SEPARATE ORDERS DATED 28-11-2012 OF THE CIT(A)-CENT RAL, PUNE RELATING TO ASSESSMENT YEARS 2003-04 AND 2004-05 RESPECTIVELY. SINCE IDENTICAL GROUNDS HAVE BEEN TAKEN BY THE ASSESSEE IN BOTH THE SE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. LEVY OF PENALTY U/S. 271(1)(C) AMOUNTING TO RS.5 ,53,042/- FOR A.Y. 2003-04 AND RS. 8,97,228/- FOR A.Y. 2004-05 ARE THE ISSUES IN THE GROUNDS RAISED BY THE ASSESSEE IN BOTH THESE APPEALS. ITA NO.97/PN/2013 (A.Y. 2003-04) : 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOPING AND CONSTRUCT ION OF PROPERTY. FOR THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE FILED ITS RET URN OF INCOME DECLARING 2 NIL INCOME AFTER CLAIMING DEDUCTION OF RS.18,43,4 76/- U/S.80IB(10) OF THE INCOME TAX ACT. THE ASSESSING OFFICER VIDE ORD ER DATED 25-01-2006 PASSED U/S.143(3) ACCEPTED THE CLAIM OF THE ASSESSE E AND DETERMINED THE TOTAL INCOME AT NIL. SUBSEQUENTLY, A SEARCH AND SEIZURE ACTION TOOK PLACE IN THE CASE OF THE ASSESSEE ON 11-02-2009. IN RESP ONSE TO NOTICE U/S.153A THE ASSESSEE FILED THE RETURN OF INCOME DECLARING NIL INCOME. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER DATED 31- 12-2010 PASSED U/S.143(3) R.W.S.153A OF THE INCOME TAX ACT DISALLO WED THE CLAIM OF DEDUCTION U/S.80IB(10) AMOUNTING TO RS.18,43,476/- ON THE GROUND THAT THE AUDIT REPORT U/S.10CCB WAS NOT SUBMITTED AND THE AS SESSEE FAILED TO FURNISH THE DETAILS REQUIRED FOR CLAIMING THE DEDUCTION. H E FURTHER DISALLOWED AN AMOUNT OF RS.1,41,346/- ON ACCOUNT OF DELAYED PAYME NT OF PROVIDENT FUND CONTRIBUTIONS UNDER THE PROVISIONS OF SECTION 36(1) (VA) R.W.S.2(24(X). THE ASSESSEE DID NOT PREFER ANY APPEAL. SUBSEQUENTLY, T HE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE INCOME TAX ACT AND LEVIED PENALTY OF RS.5,53,042/- BEING 100% OF THE T AX SOUGHT TO BE EVADED WHICH WAS UPHELD BY THE LD. CIT(A). 4. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, SINCE THE ASSESSMENT FRAMED BY THE LEARNED ASSESSING OFFICER U/S 153 A IS BAD IN LAW, NULL AND VOID AB-INITIO AND WITHOUT JUR ISDICTION THE PENALTY LEVIED U/S 271[1][C] OF THE I.T. ACT 1961 O N THE BASIS OF SUCH VOID ORDER IS ALSO BAD IN LAW, NULL AND VOID AB-INI TIO AND WITHOUT JURISDICTION AND HENCE THE IMPUGNED PENALTY MAY PLE ASE BE DELETED. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED C.I.T.[A] HAS FAILED TO APPRECIATE THAT SINCE IN TH E ORIGINAL ASSESSMENT ORDER FRAMED U/S 143[3] OF THE I.T. ACT 1961, [WHICH HAD ATTAINED FINALITY ON THE DATE OF SEARCH] THE CL AIM OF DEDUCTION U/S 80 IB [10] WAS ALLOWED BY THE LEARNED ASSESSING OFFICER AFTER SCRUTINY AND DUE APPLICATION OF MIND, THE DISALLOWA NCE OF THE SAID DEDUCTION IN ASSESSMENT FRAMED U/S 153 A OF THE I.T . ACT 1961, 3 PARTICULARLY IN THE ABSENCE OF ANY INCRIMINATING MA TERIAL OR FRESH FACTS CANNOT CONSTITUTE CONCEALED INCOME OR FURNISH ING IN ACCURATE PARTICULARS OF INCOME WARRANTING LEVY OF PENALTY U/ S 271[1][C] OF THE I.T. ACT 1961. THE IMPUGNED PENALTY BEING BAD I N LAW, PATENTLY ILLEGAL, WITHOUT JURISDICTION AND VOID AB-INITIO TH E SAME MAY PLEASE BE DELETED 3. THE IMPUGNED PENALTY LEVIED U/S 271[1][C] OF T HE I.T. ACT 1961 BY THE LEARNED ASSESSING OFFICER AND AS CONFIRMED BY T HE LEARNED C.I.T.[A] ON THE AMOUNT OF RS. 18,43,476.00 BEING T HE ALLEGED CONCEALED INCOME / THE INCOME IN RESPECT OF WHICH I NACCURATE PARTICULARS OF INCOME HAVE BEEN FILED, BEING BAD IN LAW, PATENTLY ILLEGAL, WITHOUT JURISDICTION AND VOID AB-INITIO TH E SAME MAY PLEASE BE DELETED. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET S UBMITTED THAT THE ASSESSEE HAD FILED HIS ORIGINAL RETURN OF INCOME ON 06-11-2003 AND THE ASSESSING OFFICER VIDE ORDER DATED 25-01-2006 ACCEP TED THE CLAIM OF DEDUCTION U/S.80IB(10) AT RS.18,43,476/- IN THE ORD ER PASSED U/S.143(3). THE SEARCH IN THE INSTANT CASE TOOK PLACE ON 11-02- 2009. REFERRING TO THE DECISION OF HONBLE BOMBAY HIGH COURT (NAGPUR BENCH ) IN THE CASE OF CIT VS. M/S. MURLI AGRO PRODUCTS LTD. VIDE ITA NO.36/20 09 ORDER DATED 29-10- 2010 HE SUBMITTED THAT SINCE IN THE INSTANT CASE NO THING WAS UNEARTHED DURING THE COURSE OF SEARCH, THEREFORE, INITIATION OF PROCEEDINGS U/S.153A WOULD NOT AFFECT THE ASSESSMENT FINALISED ON 25-01- 2006. ONCE IT IS HELD THAT THE ASSESSMENT HAS ATTAINED FINALITY, THE ASSE SSING OFFICER WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER U/S.153A R .W.S.143(3) COULD NOT HAVE DISTURBED THE ASSESSMENTS/RE-ASSESSMENTS ORDER WHICH HAS ATTAINED FINALITY UNLESS THE MATERIALS GATHERED IN THE COURS E OF THE PROCEEDINGS U/S.153A OF THE INCOME TAX ACT ESTABLISHES THAT REL IEFS GRANTED UNDER FINALISED ASSESSMENTS/RE-ASSESSMENTS WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. 6. SO FAR AS THE PAYMENT OF EMPLOYEES CONTRIBUTION TOWARDS P.F. IS CONCERNED HE SUBMITTED THAT THE SAME WERE PAID BEFO RE FILING OF THE RETURN 4 AND IN VIEW OF CATENA OF DECISIONS THE ASSESSEE IS ENTITLED TO DEDUCTION OF THE SAME. HE SUBMITTED THAT MERELY BECAUSE THE ASS ESSEE HAS NOT PREFERRED ANY APPEAL THE SAME CANNOT BE A GROUND FOR LEVY OF PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT AND THE ASSESSEE CAN ALWAYS ARGU E HIS CASE ON EVERY ISSUE DURING PENALTY PROCEEDINGS. HE SUBMITTED THA T SINCE IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT THE INITI ATION OF PROCEEDINGS U/S.153A WOULD NOT AFFECT THE ASSESSMENT FINALISED ON 25-01-2007 AND THEREFORE NO PENALTY Y/S.271(1)(C) IS LEVIABLE. 7. THE LD. DR ON THE OTHER HAND SUBMITTED THAT SIN CE THE ASSESSEE HAS MADE A WRONG CLAIM U/S.80IB(10), THEREFORE, THE ASS ESSEE WAS LIABLE FOR PENALTY U/S.271(1)(C) OF THE INCOME TAX ACT. THE F ACT THAT THE ASSESSEE HAS NOT FILED AN APPEAL AGAINST THE ASSESSMENT ORDER SH OWS THAT IT IS A CLEAR CASE OF CONCEALMENT OF PARTICULARS OF INCOME AND FURNIS HING OF INACCURATE PARTICULARS. THEREFORE, THE LEVY OF PENALTY U/S.27 1(1)(C) BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(A) SHOULD BE U PHELD. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S.143(3) ON 25-01-2006 ACCEPTING THE CLAIM OF DEDUCTION U/S.80IB(10) AMOUNTING TO RS .18,43,476/- AND THE INCOME WAS DETERMINED AT NIL. THERE IS ALSO NO D ISPUTE TO THE FACT THAT THE SEARCH TOOK PLACE IN THE INSTANT CASE ON 11-02- 2009 AND THE ASSESSING OFFICER IN THE ASSESSMENT ORDER PASSED U/S.143(3) R .W.S. 153A ON 31-12- 2010 DETERMINED THE INCOME OF THE ASSESSEE AT RS.18 ,84,812/- BY 5 DISALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) AT RS.18,43,476/- AND DISALLOWING THE DELAYED PAYMENT OF DEPOSIT OF P.F. U/S.36(1)(VA) R.W.S. 2(24)(X) OF THE INCOME TAX ACT AT RS.1,41,346/-. 8.1 A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT TH E ASSESSING OFFICER DISALLOWED CLAIM OF DEDUCTION U/S.80IB(10) ON ACCOU NT OF NON-ATTACHMENT OF FORM 10CCB AND NON-FURNISHING OF DETAILS SUCH AS SIZE OF THE PLOT, DATE OF COMMENCEMENT AND DATE OF COMPLETION OF THE RESID ENTIAL UNIT, BUILDING PLAN ETC. SIMILARLY, THE ASSESSING OFFICER MADE TH E DISALLOWANCE U/S.36(1)(VA) R.W.S. 2(24)(X) ON ACCOUNT OF DETAILS FOUND FROM THE AUDIT REPORT. NOTHING INCRIMINATING WAS FOUND DURING THE COURSE OF SEARCH WHICH WOULD SHOW THAT THE RELIEF U/S.80IB(10) WAS ERRONEO US. SIMILARLY, NOTHING WAS FOUND DUE TO THE SEARCH WHICH WOULD OTHERWISE S HOW THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME ON ACCOUNT OF DELAYED PAYMENT OF EMPLOYEES PROVIDENT FUND. THE ASSESSING OFFICER MA DE THE ADDITION U/S.2(24)(X) R.W.S. 36(1)(VA) ONLY ON THE BASIS OF THE AUDIT REPORT FILED ALONG WITH RETURN. 8.2 WE FIND THE HONBLE JURISDICTIONAL HIGH COURT O F BOMBAY (NAGPUR BENCH) VIDE ITA NO.36/2009 ORDER DATED 29-10-2010 I N THE CASE OF CIT VS. M/S. MURLI AGRO PRODUCTS LTD. HAS OBSERVED AS UNDER : 11) IN THE PRESENT CASE, AS CONTENDED BY SHRI MANI , LEARNED COUNSEL FOR THE ASSESSEE, THE ASSESSMENT FOR THE ASSESSMENT YEAR 19 98-99 WAS FINALISED ON 29-12- 2000 AND SEARCH WAS CONDUCTED THEREAFTER ON 03-12-2 003. THEREFORE, IN THE FACTS OF THE PRESENT CASE, INITIATION OF PROCEEDINGS UNDE R SECTION 153A WOULD NOT AFFECT THE ASSESSMENT FINALISED ON 29-12-2000. 12) ONCE IT IS HELD THAT THE ASSESSMENT FIN ALISED ON 29.12.2000 HAS ATTAINED FINALITY, THEN THE DEDUCTION ALLOWED UNDER SECTION 80 HHC OF THE INCOME-TAX ACT AS WELL AS THE LOSS COMPUTED UNDER THE ASSESSMENT D ATED 29-12-2000 WOULD ATTAIN FINALITY. IN SUCH A CASE, THE A.O. WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 143(3) OF THE I.T. ACT COULD NOT HAVE 6 DISTURBED THE ASSESSMENT/ REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY, UNL ESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 153A OF THE INCOME-TAX ACT ESTABLISH THAT THE RELIEFS GRANTED UNDER THE FINALI SED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS. 13) IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SECTION 80HHC WAS ERRONEOUS. IN SUCH A CASE, THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDE R UNDER SECTION 153A READ WITH SECTION 143(3) COULD NOT HAVE DISTURBED THE ASSESSM ENT ORDER FINALISED ON 29-12- 2000 RELATING TO SECTION 80HHC DEDUCTION AND CONSEQ UENTLY THE C.I.T. COULD NOT HAVE INVOKED JURISDICTION UNDER SECTION 263 OF THE ACT. 9. SINCE IN THE INSTANT CASE THE ORIGINAL ASSESSMEN T WAS FINALISED ON 25- 01-2006 AND THE SEARCH TOOK PLACE THEREAFTER, I.E. ON 11-02-2009, THEREFORE, IN VIEW OF THE DECISION CITED (SUPRA) THE INITIATIO N OF PROCEEDINGS U/S.153A WOULD NOT AFFECT THE ASSESSMENT FINALISED ON 25-01- 2006. ONCE IT IS HELD THAT THE ASSESSMENT FINALISED ON 25-01-2006 HAS ATT AINED FINALITY, THEN THE DEDUCTION ALLOWED THEREIN VIDE ORDER DATED 25-01-20 06 WOULD ATTAIN FINALITY AND THEREFORE THE ASSESSING OFFICER COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER PASSED U/S.143(3) FOR THE A.Y. 200 3-04. NO DOUBT THE ASSESSEE IN THE INSTANT CASE HAS NOT FILED ANY APPE AL AGAINST THE ORDER PASSED U/S.143(3) R.W.S.153A IN THE QUANTUM PROCEEDINGS. HOWEVER, THE ASSESSEE CAN ALWAYS ARGUE HIS CASE AFRESH IN THE PENALTY PRO CEEDINGS ON VARIOUS ISSUES WHICH HE HAD NOT ARGUED DURING THE QUANTUM P ROCEEDINGS. SINCE IN THE INSTANT CASE THE ASSESSING OFFICER COULD NOT HA VE DISTURBED THE ASSESSMENT WHICH WAS FINALISED BEFORE THE DATE OF S EARCH IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT CITED (SU PRA), THEREFORE, THE QUESTION OF LEVY OF PENALTY DOES NOT ARISE. IN THI S VIEW OF THE MATTER, WE AGREE WITH THE CONTENTION OF THE LD. COUNSEL FOR TH E ASSESSEE THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT(A) IS 7 NOT PROPER AND HAS TO BE CANCELLED. WE HOLD AND DI RECT ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLO WED. ITA NO.98/PN/2013 (A.Y. 2004-05) : 10. AFTER HEARING BOTH THE SIDES WE FIND THE GROUND S RAISED BY THE ASSESSEE IN THE IMPUGNED APPEAL ARE IDENTICAL TO TH E GROUNDS IN ITA NO.97/PN/2013. WE HAVE ALREADY DECIDED THE ISSUE B Y CANCELLING THE PENALTY AND THE GROUNDS RAISED BY THE ASSESSEE HAVE BEEN ALLOWED. FOLLOWING THE SAME RATIO, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN ON THIS THE 30 TH DAY OF APRIL 2013. SD/- SD/- (SHAILENDRA KUMAR YADAV ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, DATED THE 30 TH APRIL 2013. COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A) CENTRAL, PUNE 4. THE CIT CENTRAL, PUNE 5. THE DR A BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // PRIVATE SECRETARY, INCOME TAX APPELLATE T RIBUNAL, PUNE.