The DCIT, Central Circle-3, Surat V. Shri Subhash M.Patel, Daman

ITSSA 256/AHD/2012

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8106 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Keywords: Income from undisclosed sources
• Section: 143(3); 153A; 132; 2; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND A. MOHAN ALANKAMON Y, AM) IT(SS)A NO.256/AHD/2012 A. Y.: 2009-10 THE D. C. I. T., CENT. CIR-3, AAYAKAR BHAVAN, ROOMNO.507, MAJURA GATE, SURAT VS SUBHASH M. PATEL, 65A, DABHEL VILLAGE, DAMAN, P. A. NO. AGMPP 3230 B (APPELLANT) (RESPONDENT) APPELLANT BY SHRI RAHUL KUMAR, SR. DR RESPONDENT BY NONE DATE OF HEARING: 17-07-2012 DATE OF PRONOUNCEMENT: 20-07-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A )-II, SURAT IN APPEAL NO. CIT(A)-II/C.3/78/2011-12 DATED 20-03-201 2 PASSED U/S 271 (1) (C) R.W.S 250 OF THE IT ACT FOR ASSESSMENT YEAR 2008-09. 2. THE REVENUE HAS RAISED THREE GROUNDS IN ITS APPE AL WHEREIN GROUNDS NO.2 AND 3 ARE GENERAL IN NATURE. GROUND NO .1 OF THE APPEAL IS REPRODUCED HEREIN BELOW FOR OUR CONSIDERATION: 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DIRECTING THE AO TO DELETE THE PENALTY OF RS.2,07,665/- LEVIE D BY THE ASSESSING OFFICER U/S. 271 (1) (C) OF THE ACT. ITA NO.256/AHD/2012 (AY: 2008-09) DCIT, CENT CIR-3, SURAT VS SUBHASH M. PATEL 2 3. BRIEF FACTS:- A SEARCH WAS CONDUCTED ON THE ASSE SSEE ON 24- 09-2008 U/S 132 OF THE ACT AND ASSESSMENT WAS COMPL ETED U/S 143(3) READ WITH SECTION 153A OF THE ACT ON 30-11-2 010 DETERMINING TOTAL INCOME AT RS.47,28,934/-. DURING THE SEARCH P ROCEEDINGS THE ASSESSEE HAD ADMITTED RS.35,53,000/- AS UNACCOUNTED INCOME EARNED FROM PURCHASE AND SALE OF LAND FOR ASSESSMEN T YEAR 2008-09 AND THE SAME WAS NOT ACCOUNTED IN THE REGULAR BOO KS OF ACCOUNT. THE LEARNED AO INITIATED PROCEEDINGS U/S 271 (1) (C ) OF THE ACT AND LEVIED PENALTY OF RS.12,07,665/- BEING MINIMUM PENA LTY OF 100% OF THE TAX SOUGHT TO BE EVADED. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARN ED CIT(A). THE LEARNED CIT(A) DELETED THE PENALTY MADE BY THE LEAR NED AO WITH THE FOLLOWING OBSERVATIONS: 6. I HAVE CONSIDERED THE FACTS OF THE CASE, ORDER OF THE A. O. AND THE SUBMISSIONS OF THE APPELLANT. IT IS SEEN TH AT THE SEARCH IN THE CASE OF THE APPELLANT WAS CONDUCTED ON 24-09 -2008 AND THAT THE APPELLANTS CASE IS AUDITED U/S. 44AB OF T HE ACT AND THEREFORE, THE DUE DATE OF FILING THE RETURN U/S.13 9 (1) IN THE CASE OF THE APPELLANT FOR THE A. Y. 2008-09 EXPIRES ON 30-09- 2008 I.E. SUBSEQUENT TO THE DATE OF SEARCH. IN THE CASE WHERE THE PREVIOUS YEAR HAS ENDED BEFOR E THE DATE OF SEARCH BUT THE DUE DATE OF FILING THE RETURN OF INC OME U/S. 139(1) HAS NOT EXPIRED PRIOR TO THE DATE OF SEARCH, EXPLAN ATION (B) TO SECTION 271AAA DEFINES THE SAME AS THE SPECIFIED P REVIOUS YEAR AND SUB SECTION (3) OF SECTION 271AAA CATEGORICALLY PROVIDES THAT NO PENALTY U/S. 271 (1) (C) SHALL BE IMPOSED IN RES PECT OF THE UNDISCLOSED INCOME FOR THE SAID SPECIFIED YEAR. IN THE APPELLANTS CASE, THE A. Y. 2008-09 IS THE S PECIFIED PREVIOUS YEAR BEING THE PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH BUT DUE DATE OF FILING OF RETURN FOR WHICH H AS NOT EXPIRE ITA NO.256/AHD/2012 (AY: 2008-09) DCIT, CENT CIR-3, SURAT VS SUBHASH M. PATEL 3 PRIOR TO THE DATE OF SEARCH AND THEREFORE, AS PER S UB SECTION (3) OF SECTION 271AAA READ WITH EXPLANATION (B) TO 271AAA NO PENALTY CAN BE IMPOSED U/S. 271 (1) (C) OF THE ACT. FURTHER , EVEN CLAUSE (B) OF EXPLANATION 5A TO SECTION 271 (1) ( C ) CLEA RLY PROVIDES THAT PENALTY U/S. 271 (1) (C) SHALL BE LEVIED ONLY IN RE SPECT OF A PREVIOUS YEAR WHERE THE DUE DATE OF FILING THE RET URN AS PROVIDED IN SECTION 139 (1) HAS EXPIRED. ACCORDINGLY, IT IS HELD THAT THE AO IS NOT CORRECT IN LEVYING PENALTY U/S. 271 (1) (C) ON THE APPELLANT FOR THE A. Y. 200 8-09 AND THEREFORE, THE PENALTY OF RS.12,07,665/- AS LEVIED BY THE AO U/S. 271 (1) ( C) IS DELETED. 5. NOW, THE REVENUE IS IN APPEAL BEFORE US AGGRIEVE D BY THE ORDER OF THE LEARNED CIT(A) DELETING THE PENALTY LEVIED BY T HE LEARNED AO. 6. THE LEARNED DR SUPPORTED THE ORDER OF THE LEARNE D AO. HOWEVER, NONE APPEARED ON BEHALF OF THE ASSESSEE. 7. WE HAVE HEARD THE LEARNED DR AND CAREFULLY PERUS ED THE MATERIAL ON RECORD. IT IS EVIDENT FROM THE ORDER OF THE LEAR NED AO THAT SEARCH WAS CONDUCTED ON 24-09-2008. LOOKING AT THE PROVISIONS OF SECTION 271AAA OF THE ACT IT BECOMES ABUNDANTLY CLEAR THAT WHERE S EARCH HAS BEEN INITIATED U/S 132 OF THE ACT, ON OR AFTER 01-06-200 7, SECTION 271AAA COMES INTO PLAY WHILE AS SECTION 271(1) ( C) IS BAR RED BY VIRTUE OF SECTION 271AAA SUB SECTION (3). SECTION 271AAA SUB SECTION (1) AND (3) ARE REPRODUCED HEREIN BELOW FOR REFERENCE: PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UND ER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, ITA NO.256/AHD/2012 (AY: 2008-09) DCIT, CENT CIR-3, SURAT VS SUBHASH M. PATEL 4 A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE U NDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE ( C ) OF SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SU B-SECTION (1). 8. IT IS CLEAR FROM THE ABOVE THAT THE LEARNED AO HAS NOT INVOKED THE CORRECT PROVISIONS OF LAW FOR LEVYING THE PENALTY. IN THIS CASE SEARCH WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 24-09- 2008, THUS THE DATE OF INITIATION OF SEARCH WAS ON 24-09-2008. FRO M THE PROVISIONS OF SECTION 271AAA IT IS CLEAR THAT IN THE CASE WHERE A CTION U/S 132 IS INITIATED ON OR AFTER 01/06/2007, PENALTY CANNOT BE LEVIED U/S 271 (1)(C)OF THE ACT. PENALTY CAN BE LEVIED ONLY U/S. 2 71AAA OF THE ACT WHEN CERTAIN CONDITIONS STIPULATED THEREIN IS NOT COMPLI ED. THEREFORE, WE DO NOT HAVE ANY OPTION THAN TO CONFIRM THE ORDER OF TH E LEARNED CIT(A) DELETING THE PENALTY LEVIED BY THE LEARNED AO. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-07-2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHM LAKSHM LAKSHM LAKSHM IKANT DEKA/ IKANT DEKA/ IKANT DEKA/ IKANT DEKA/ ITA NO.256/AHD/2012 (AY: 2008-09) DCIT, CENT CIR-3, SURAT VS SUBHASH M. PATEL 5 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 17-07-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 18-09-2012 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR.P.S ./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: