Shri Mahendra R.Gupta, Ahmedabad V. The Dy.CIT.,Cent.Circle-1(3), Ahmedabad

ITSSA 290/AHD/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9393 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-08-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 12-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATHEJA
• Assessee Lawyers: S V AGARWAL
• Section: 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER AN D SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 290 & 292/AHD/2012 A.Y: 2007 08 & 2008 09 MAHENDRA R. GUPTA, 302, DEVARC COMMERCIAL COMPLEX, BESIDES FUN REPUBLIC CINEMA, S. G. ROAD, AHMEDABAD 380015. PAN : ABBPG6469M VS DCIT, CENTRAL CIRCLE 1 (3), AHMEDABAD (ASSESSEE) (REVENUE) REVENUE BY : SHRI O. P. BHATHEJA, SR. D R ASSESSEE(S) BY : SHRI S. V. AGARWAL, AR / // / DATE OF HEARING : 12/08/2013 / DATE OF PRONOUNCEMENT: 03/09/2013 / O R D E R PER A. K. GARODIA: BOTH THESE APPEALS ARE FILED BY THE ASSESSEE AND A RE DIRECTED AGAINST TWO SEPARATE ORDERS OF LEARNED CIT (A) I, AHMEDABAD BO TH DATED 17.05.2012 FOR A.Y. 2007 08 & 2008 09. 2. THE ASSESSEE HAS ONLY ONE GRIEVANCE IN BOTH THE YEARS I.E. PENALTY IMPOSED BY THE A.O. AND CONFIRMED BY THE LEARNED CI T (A) IN BOTH YEARS U/S 271 (1) (C) OF THE I. T. ACT, 1961 OF RS. 72,000/- IN A.Y. 2007 08 AND RS. 7.50 LACS IN A.Y. 2008 09. 3. IT IS SUBMITTED BY THE LEARNED AR OF THE ASSESSE E THAT THE SEARCH WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 15.10.2008 AND THEREFORE, THE PROVISIONS OF SECTION 271AAA ARE APPLICABLE AND AS PER THE PROVISIONS OF SUB SECTION (3) OF THIS SECTION, SECTION 271 (1) (C) AR E NOT APPLICABLE. REGARDING THE PENALTY IMPOSABLE UNDER SUB SECTION (1) OF SECTION 271AAA, HE SUBMITTED THAT ITA NO.290 & 292/AHD /2012 - 2 - THERE ARE EXCEPTIONS IN SUB SECTION (2) OF THIS SEC TION AND IF THE REQUIREMENTS OF THIS SUB SECTION ARE MET, NO PENALTY IS TO BE IMPOS ED U/S 271AAA (1) ALSO. HE SUBMITTED THAT ON THIS ASPECT, THE MATTER IS COVERE D BY TWO TRIBUNAL DECISIONS RENDERED IN GROUP CASES FOR THE SAME SEARCH AND SAM E DISCLOSURE U/S 132 (4). HE SUBMITTED A COPY OF THESE TWO TRIBUNAL DECISIONS RE NDERED IN THE CASES OF BALAJEE FORMALIN PVT. LTD. VS. DCIT IN ITA NO. 1274 /AHD/2012 DATED 07.09.2012 AND MUKESH R. GUPTA VS. DCIT IN ITA NO. 289 & 291/AHD/2012 DATED 07.09.2012. LEARNED DR OF THE REVENUE SUPPORT ED THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS NOTED BY TH E A.O. IN ASSESSMENT ORDERS FOR BOTH THE YEARS THAT SEARCH WAS CONDUCTED ON 15.10.2 008. AS PER THE PROVISIONS OF SUB SECTION (1) OF SECTION 27AAA, IF A SEARCH HA S BEEN CARRIED OUT U/S 132 ON OR AFTER 01.06.2007 BUT BEFORE 01.07.2012, THEN NOT WITHSTANDING ANY OTHER PROVISIONS OF THIS ACT, THE ASSESSEE IS TO PAY PENA LTY @ 10% OF UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. AS PER THE P ROVISIONS OF SUB SECTION (3) OF THIS SECTION, IF THE PROVISIONS OF SECTION 271AA A (1) ARE APPLICABLE, THEN PROVISIONS OF SECTION 271 (1) (C) ARE NOT APPLICABL E. 5. WE FEEL THAT THE PROVISIONS OF SECTION 271AAA AR E RELEVANT AND HENCE, WE REPRODUCE THE SAME AS UNDER:- 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1 ST DAY OF JULY, 2012 , THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF T HE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A S TATEMENT UNDER SUB- SECTION (4) OF SECTION 132 , ADMITS THE UNDISCLOSED INCOME AND SPECIFIES ITA NO.290 & 292/AHD /2012 - 3 - THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RE SPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB- SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECT ION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) UNDISCLOSED INCOME MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED, EIT HER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132 , WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH I N THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN T HE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIE F COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCT ED; (B) SPECIFIED PREVIOUS YEAR MEANS THE PREVIOUS YEAR (I) WHICH HAS ENDED BE FORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) O F SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SE ARCH AND THE ASSESSEE HAS NOT F URNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED.] ITA NO.290 & 292/AHD /2012 - 4 - 6. AS PER THE PROVISIONS OF SECTION 271AAA, AS REPR ODUCED ABOVE, FIRST OF ALL, SUB SECTION (1) HAS TO BE APPLICABLE IN A GIVE N CASE AND THEN ONLY ITS SUB SECTION (2) OR (3) MAY BE APPLICABLE. FOR THE APPLI CABILITY OF SUB SECTION (1) OF SECTION 271AAA, IT IS A PRECONDITION THAT THE SEARC H WAS CARRIED OUT DURING 01.06.2007 TO 30.06.2012 AND THE PREVIOUS YEAR INVO LVED IS A SPECIFIED PREVIOUS YEAR. IN THE PRESENT CASE, THE FIRST CONDITION IS S ATISFIED BECAUSE THE SEARCH WAS CARRIED OUT ON 15.10.2008. FOR THE SECOND CONDITION I.E. EXISTENCE OF SPECIFIED PREVIOUS YEAR, WE HAVE TO EXAMINE ITS DEFINITION GI VEN IN EXPLANATION (B) TO SECTION 271AAA (4) AS REPRODUCED ABOVE. AS PER THE SAME, EITHER IT SHOULD BE THE YEAR IN WHICH THE SEARCH IS CONDUCTED. SEARCH I N THE PRESENT CASE WAS CONDUCTED ON 15.10.2008 AND HENCE, THE PREVIOUS YEA R FOR BOTH THE ASSESSMENT YEARS BEFORE US IS NOT THE YEAR OF SEARCH BECAUSE B OTH THE PREVIOUS YEARS ENDED BEFORE THE START OF THE YEAR OF SEARCH. 7. THERE IS ONE MORE PREVIOUS YEAR WHICH IS ACCEPTE D AS A SPECIFIED PREVIOUS YEAR AS PER THIS EXPLANATION. IF A PREVIOUS YEAR HA S EXPIRED BEFORE THE DATE OF SEARCH BUT THE DUE DATE FOR FILING THE RETURN OF IN COME U/S 139(1) HAS NOT EXPIRED AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF IN COME BEFORE THE DATE OF SEARCH, THEN SUCH PREVIOUS YEAR IS ALSO A SPECIFIED PREVIOUS YEAR. IN THE PRESENT CASE, THE PREVIOUS YEAR FOR BOTH THE YEARS HAVE END ED BEFORE THE DATE OF SEARCH AND THE DUE DATE FOR FILING THE RETURN OF INCOME U/ S 139 (1) HAS ALSO EXPIRED BEFORE THE DATE OF SEARCH. MOREOVER, THE ASSESSEE H AS ALSO FILED HIS RETURN OF INCOME BEFORE THE DATE OF SEARCH BECAUSE FOR A.Y. 2 007 08, THE RETURN OF INCOME WAS FILED ON 05.07.2007 AND FOR A.Y. 2008 09, THE RETURN OF INCOME WAS FILED ON 07.07.2008 AND BOTH THESE DATES ARE FA LLING PRIOR TO THE DATE OF SEARCH I.E. 15.10.2008. HENCE, NONE OF THESE TWO PR EVIOUS YEARS IS A SPECIFIED PREVIOUS YEAR. HENCE, THE PROVISIONS OF SECTION 271 AAA (1) ARE NOT APPLICABLE IN THESE TWO CASES. AS A CONSEQUENCE, SUB SECTION ( 2) AND (3) OF SECTION ITA NO.290 & 292/AHD /2012 - 5 - 271AAA ARE ALSO NOT APPLICABLE BECAUSE FOR THEIR AP PLICABILITY, THIS IS A PRECONDITION THAT SECTION 271AAA (1) IS APPLICABLE. 8. SINCE, SECTION 271AAA IS NOT APPLICABLE IN THE P RESENT CASE; THE TRIBUNAL DECISIONS CITED BY THE LEARNED AR OF THE ASSESSEE A RE NOT RENDERING ANY HELP TO THE ASSESSEE IN THE PRESENT TWO CASES. IN BOTH THES E CASES ALSO, THE TRIBUNAL HAS NOTED THAT RETURN OF INCOME WERE FILED ON 01.08.200 8 IN THE CASE OF BALAJI FORMALIN PVT. LTD. (SUPRA) AND ON DATED 04.07.2007 AND 10.07.2008 IN THE SECOND CASE AND SEARCH WAS CONDUCTED ON 15.10.2008 IN ALL CASES. HENCE, THE PROVISIONS OF SECTION 271AAA (1) ARE NOT APPLICABLE IN THOSE CASES ALSO BUT THIS ASPECT HAS ESCAPED THE ATTENTION OF THE TRIBUNAL IN THESE CASES AND THEREFORE, THESE TRIBUNAL DECISIONS ARE NOT A BINDING PRECEDEN CE. 9. ON MERIT OF THE LEVY OF PENALTY IN BOTH THESE YE ARS, NO OTHER ARGUMENT WAS ADVANCED BY THE LEARNED AR OF THE ASSESSEE EXCE PT ARGUING THIS THAT IT IS COVERED IN FAVOUR OF THE ASSESSEE BY THESE TWO TRIB UNAL DECISIONS IN GROUP CASES ARISING OUT OF THE SAME SEARCH. BEFORE THE AUTHORIT IES BELOW ALSO, NO OTHER ARGUMENT WAS ADVANCED BY THE LEARNED AR OF THE ASSE SSEE TO CONTEND THAT THERE IS NO CONCEALMENT EXCEPT THIS THAT PENALTY IS NOT L EVIABLE IN TERMS OF SUB SECTION (2) & (3) OF SECTION 271AAA . UNDER THESE FACTS, W E FEEL THAT BOTH THESE MATTERS SHOULD GO BACK TO THE FILE OF THE A.O. FOR A FRESH DECISION ABOUT PENALTY TO ENABLE THE ASSESSEE TO MAKE HIS SUBMISSIONS ON A PPLICABILITY OF THE PROVISIONS OF SECTION 271 (1) (C) OF THE I. T. ACT BECAUSE IT SEEMS THAT UNDER THIS IMPRESSION THAT THE PROVISIONS OF SECTION 271AAA (2 ) & (3) ARE APPLICABLE, NO OTHER ARGUMENT WAS ADVANCED BY THE LEARNED AR OF TH E ASSESSEE BEFORE US OR BEFORE THE AUTHORITIES BELOW ABOUT OTHERWISE APPLIC ABILITY OF SECTION 271 (1) (C) OF THE I. T. ACT, 1961.SINCE, THESE ARE PENALTY PRO CEEDINGS, WE FEEL IT PROPER TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE. HENCE , WE SET ASIDE THE ORDER OF THE LEARNED CIT (A) IN BOTH YEARS AND RESTORE THE M ATTER BACK TO THE A.O. FOR A ITA NO.290 & 292/AHD /2012 - 6 - FRESH DECISION ABOUT APPLICABILITY OF THE PROVISION S OF SECTION 271 (1) (C) OF THE I. T. ACT AFTER PROVIDING ADEQUATE OPPORTUNITY OF B EING HEARD TO THE ASSESSEE. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTION ED ON THE CAPTION PAGE. SD/- SD/- (MUKUL KUMAR SHRAWAT) (A.K. GA RODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER FIT FOR PUBLICATION SD/- SD/- (JM) (AM) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' '& / CONCERNED CIT 4. ' '&() / THE CIT(A)-III, AHMEDABAD 5. )*' %, ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. *./ 0 / GUARD FILE. / BY ORDER, 1 11 1/ // /,' #2 ,' #2 ,' #2 ,' #2 ( DY./ASSTT.REGISTRAR) ' ' % ' ' % ' ' % ' ' % , , , , ,-$ ,-$ ,-$ ,-$ / ITAT, AHMEDABAD