DCIT, CHENNAI V. D.K.Nagu Sah & Brothers, Kancheepuram

ITSSA 21/CHNY/2011

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8114 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-09-2011
• Assessment Year: misc
• Appeal Filed On: 04-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K E B RANGARAJAN JUNIOR
• Assessee Lawyers: B RAMAKRISHNAN
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMB ER I.T (SS) A. NO. 21/MDS/2011 BLOCK PERIOD : A.Y. 1991-92 TO 2000-01 (UPTO 14.9. 2000) THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE III(1), CHENNAI 600 034. (APPELLANT) V. M/S D.K. NAGU SAH & BROTHERS, 82, GANDHI ROAD, KANCHEEPURAM. PAN : AABHN9049P (RESPONDENT) APPELLANT BY : SHRI K.E.B. RANGARAJ AN, JUNIOR STANDING COUNSEL RESPONDENT BY : SHRI B. RAMAKRISHNAN, FCA DATE OF HEARING : 28.09.2011 DATE OF PRONOUNCEMENT : 30.09.2011 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER DATED 01.04.2011 OF COMMISSIONER OF INCOME TAX (APP EALS)-II, CHENNAI, FOR THE BLOCK ASSESSMENT PERIOD 1991-92 TO 2000-01 (UPTO 14.9.2000). I.T (SS) A. NO. 21/MDS/11 2 2. THE SOLE GROUND OF APPEAL TAKEN BY THE REVENUE I S THAT THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 1, 76,88,028/- LEVIED U/S 158BFA(2) OF THE ACT FAILING TO NOTE THAT THE O RDER OF THE ITAT IN IT(SS)A NO. 153/MDS/2006 DATED 14/3/2008 QUASHIN G THE BLOCK ASSESSMENT ORDER HAD NOT BECOME FINAL AND APPEAL BY THE DEPARTMENT IS PENDING DISPOSAL BEFORE THE HIGH COUR T OF MADRAS IN T.C. NO. 1280 OF 2008. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER VIDE ITS ORDER PASSED U/S 158BFA(2) OF THE ACT ON 30.10.2006 LEVIED PENALTY OF RS. 1,76,88,028/- ON THE UNDISCLOSED INCOME DET ERMINED OVER AND ABOVE ASSESSEES ADMITTANCE IN FORM NO. 2B AFTE R GIVING EFFECT TO THE ORDER OF THE LD. CIT(A). 4. AGGRIEVED BY THE SAID ORDER OF THE ASSESSING OFF ICER, THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A) WHO ACC EPTED THE APPEAL OF THE ASSESSEE AND DELETED THE PENALTY ON THE GROU ND THAT THE TRIBUNAL IN THE APPEAL OF THE ASSESSEE AGAINST THE BLOCK ASSESSMENT I.T (SS) A. NO. 21/MDS/11 3 ORDER HAD QUASHED THE BLOCK ASSESSMENT ORDER AS VOI D AB INITIO , AND THEREFORE, PENALTY LEVIED U/S 158BFA OF THE ACT CAN NOT SUBSIST. 5. THE LD. D.R. SUPPORTED THE ORDER OF THE AO WHER EAS THE LD. A.R. SUPPORTED THE ORDER OF THE LD. CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE MATERIAL ON RECORD, WE FIND THAT IN THE INSTANT CAS E, THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 1,76,88,028/- ON THE ADDITIONS MADE IN THE BLOCK ASSESSMENT ORDER OF RS. 2,51,96, 623/- FOR UNDISCLOSED INCOME DETERMINED OVER AND ABOVE THE AS SESSEES ADMITTANCE IN FORM NO. 2B AFTER GIVING EFFECT TO TH E ORDER OF THE LD. CIT(A). 7. THE APPEAL AGAINST THE ORDER OF THE LD. CIT(A) C ONFIRMING THE ADDITIONS BY THE ASSESSING OFFICER MADE IN THE BLOC K ASSESSMENT ORDER WAS ALLOWED BY THE TRIBUNAL WHEREIN THE TRIBU NAL QUASHED THE BLOCK ASSESSMENT ORDER AS VOID AB INITIO . THE LD. CIT(A), THEREFORE, DELETED THE PENALTY BY OBSERVING THAT AS THE BLOCK ASSESSMENT ORDER I.T (SS) A. NO. 21/MDS/11 4 HAS BEEN QUASHED AS VOID AB INITIO BY THE TRIBUNAL, PENALTY LEVIED U/S 158BFA OF THE ACT CANNOT SUBSIST. WE FIND THAT THE ORDER OF THE LD. CIT(A) IS SUPPORTED BY THE DECISION OF THE MUMB AI BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. VIP INDUSTRIES [20 09] 21 DTR 153 [MUM] WHEREIN IT WAS HELD THAT IN VIEW OF THE FACT THAT THE VERY ADDITION FOR WHICH PENALTY WAS IMPOSED STANDS DELE TED BY THE TRIBUNAL, NO PENALTY CAN BE IMPOSED ON IT. HENCE W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) WHICH IS HEREBY CONFIRMED AND APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 30 TH SEPTEMBER, 2011. SD/- SD/- (HARI OM MARATHA) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH SEPTEMBER, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-II, CHENNAI-34 (4) CIT, CENTRAL-III, CHENNAI (5) D.R. (6) GUARD FILE