The DCIT, Central Circle-1, Baroda V. M/s. Shreeji Corporation, Baroda

ITSSA 73/AHD/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4226 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 21-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 153A; 27; 132

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR I.T(SS).A. NOS. 73 & 74/AHD/2017 ( ASSESSMENT YEARS : 2012-13 & 2013-14) DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA - 390007 / VS. M/S. SHREEJI CORPORATION BESIDE NATRAJ TOWNSHIP, NR. PARSHURAM BHATTA, SAYAJIGUNJ, BARODA - 390007 / / PAN/GIR NO. : ABUFS8086P ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MUDIT NAGPAL, SR. D.R. / RESPONDENT BY : NONE DATE OF HEARING 18/10/2018 !'# / DATE OF PRONOUNCEMENT 01/11/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE REVENUE AGAINST COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-12, AHMEDABAD (CIT(A) IN SHORT), DATED 29.11.2016 IN THE MATTER OF PENALTY IMPOSED BY THE AO UNDER S. 27 1AAB OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMEN T YEARS 2012- 13 & 2013-14. ITA NOS.73 & 74/AHD/17 [DCIT VS. M/S. SHREEJI CORPO RATION] A.YS. 2012-13 & 2013-14 - 2 - 2. THE REVENUE IN BOTH THE APPEALS HAVE CHALLENGED THE ACTION OF THE CIT(A) IN CANCELLING THE PENALTY IMPOSED BY THE AO UNDER S.271AAB OF THE ACT AMOUNTING TO RS.20,94,797/- AND RS.61,67,870/- FOR AYS 2012-13 & 2013-14. 3. WHEN THE MATTER WAS CALLED FOR HEARING, NONE APP EARED FOR THE ASSESSEE. ACCORDINGLY, THE MATTER IS PROCEEDED EX PARTE IN THE ABSENCE OF THE ASSESSEE AFTER TAKING NOTE OF THE AR GUMENTS PUT FORTH ON BEHALF OF THE REVENUE. THE REVENUE IS MAINLY RE LIED UPON THE PENALTY ORDER OF THE AO. 4. A PERUSAL OF THE ORDER OF THE CIT(A), IT IS NOTI CED THAT A SEARCH ACTION UNDER S.132 OF THE ACT WAS CARRIED OUT IN TH E DHANJIMAMA GROUP OF CASES ON 03.07.2012. BASED ON CERTAIN INCR IMINATING MATERIALS FOUND AND SEIZED IN THE COURSE OF SEARCH, IT WAS NOTICED BY THE AO OF THE SEARCHED PERSON THAT CERTAIN DOCUMENT S WERE FOUND TO BE BELONGING TO THE ASSESSEE HEREIN. ACCORDINGLY, THE PROCEEDINGS UNDER S.153C OF THE ACT WERE INITIATED AND ASSESSME NT ORDER WAS PASSED UNDER S.153C R.W.S. 153A OF THE ACT FOR BOTH THE ASSESSMENT YEARS IN QUESTION. THE INCOME RETURNED WAS ASSESSE D AS SUCH. HOWEVER, PENALTY UNDER S.271AAB OF THE ACT WAS IMPO SED ON UNDISCLOSED INCOME DISCLOSED IN RETURN OF INCOME FI LED IN CONSEQUENCE OF AFORESAID PROCEEDINGS UNDER S.153C O F THE ACT. THE ASSESSEE CHALLENGED IMPOSITION OF PENALTY FOR THE A SSESSMENT YEARS IN QUESTION BEFORE THE CIT(A). THE CIT(A) HOWEVER FOUND THAT THE AO LACKED JURISDICTION TO INVOKE THE PROVISIONS OF SECTION 271AAB OF THE ACT WHICH IS NOT APPLICABLE UNLESS A SEARCH ACTION UNDER S. 132 OF THE ACT HAS BEEN INITIATED IN THE CASE OF TH E ASSESSEE ITSELF. THE CIT(A) ACCORDINGLY FOUND THAT SECTION 271AAB OF THE ACT IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AT THE F IRST INSTANCE. THE ITA NOS.73 & 74/AHD/17 [DCIT VS. M/S. SHREEJI CORPO RATION] A.YS. 2012-13 & 2013-14 - 3 - OPERATIVE PORTION OF THE ORDER OF THE CIT(A) IS REP RODUCED HEREUNDER FOR READY REFERENCE: 5. I DO NOT THINK THE PLAIN AND UNAMBIGUOUS LANGUA GE PERMITS ANY CREATIVE AND IMAGINATIVE READING AS HAS BEEN RESORT ED TO BY THE LD. AO. THE PROVISIONS OF SECTION 271AAB ARE CLEARLY APPLIC ABLE, AS HAS BEEN URGED BY THE LD. AR, ONLY TO THOSE CASES WHERE SEARCH U/S 132 HAS BEEN INITIATED AND CONSEQUENTLY ONLY TO THOSE ASSES SMENTS WHICH ARE COMPLETED EITHER U/S 153A R.W.S. 143(3) OR ARE REGU LAR ASSESSMENTS U/S 143(3) IN CASES WHERE SEARCH U/S 132 HAS BEEN INITI ATED. CONSEQUENTLY, WITH REGARD TO THE ASSESSMENTS FRAMED U/S 153C, PRO VISIONS OF SEC.271AAA HAVE NO MANNER OF APPLICABILITY. IT IS A LSO NOT IN DISPUTE THAT THE ASSESSMENTS FRAMED ARE AT THE RETURNED INC OMES AND NO ADDITIONS TO THE RETURNED INCOMES HAVE BEEN MADE BY THE AO. THUS, IN MY CONSIDERED OPINION, THERE IS NO CASE FOR EVEN IN ITIATION OF PENALTY PROCEEDINGS U/S 271AAB. MY PERUSAL OF THE DECISIONS RELIED UPON BY THE LD. AR INCLUDING THE DECISION OF MY LD. PREDECESSOR (SUPRA) ALSO SUPPORTS THIS VIEW. THE LD. AO HAS THEREFORE ERRED IN OVERLOOKING/STRETCHING THE PLAIN AND UNAMBIGUOUS LA NGUAGE OF SECTION 271AAB WHICH CLEARLY EXCLUDES THE CASES NOT COVERED BY SEA RCH U/S 132. IN VIEW OF THIS, I HAVE NO HESITATION IN OBSERVING THAT THE PENALTY LEVIED BY THE AO HAS NO MERIT AND DESERVES TO CANCE LLED. CONSEQUENTLY, THE PENALTIES AS UNDER ARE CANCELLED: A.Y. PENALTY CANCELLED A.Y.2012-13 RS.20,94,797/- A.Y.2013-14 RS.6 1,67,870/- 5. A PERUSAL OF THE ASSESSMENT ORDER UNDISPUTEDLY P OINTS OUT THAT NO SEARCH HAD TAKEN PLACE IN THE CASE OF THE ASSESS EE PER SE UNDER S.132 OF THE ACT. A BARE READING OF LAW CODIFIED I N SECTION 271AAB(1) CLEARLY PROVIDES THAT THE AO MAY DIRECT T HE ASSESSEE TO PAY A SUM BY WAY OF PENALTY AT SPECIFIED PERCENTAGE WHERE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR H AS BEEN DETECTED AS A RESULT OF SEARCH UNDER S.132 OF THE ACT. SECT ION 271AAB(1)(A) HOWEVER SIMULTANEOUSLY PROVIDES CONCESSIONAL TREATM ENT IN THE MATTER OF PENALTY UNDER S.271AAB WHERE THE ASSESSEE ADMITS THE UNDISCLOSED INCOME IN A STATEMENT UNDER SUB-SECTION 4 OF SECTION 132 OF THE ACT SUBJECT TO FULFILLMENT OF OTHER COND ITIONS WITH WHICH WE ARE PRESENTLY NOT CONCERNED WITH. THEREFORE, IT IS MANIFEST THAT APPLICABILITY OF SECTION 271AAB IS INTEGRALLY CONNE CTED TO SEARCH ITA NOS.73 & 74/AHD/17 [DCIT VS. M/S. SHREEJI CORPO RATION] A.YS. 2012-13 & 2013-14 - 4 - UNDER S.132 OF THE ACT. IN THE ABSENCE OF SEARCH U NDER S. 132 OF THE ACT, THE ASSESSEE HAS NO OCCASION TO AVAIL THE CONC ESSIONAL TREATMENT BY WAY OF ADMISSION UNDER S.132(4) OF THE ACT. THU S, WE FIND OBVIOUS MERITS IN THE OBSERVATIONS MADE BY THE FIRS T APPELLATE AUTHORITY THAT PROVISIONS OF SECTION 271AAB OF THE ACT ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE. IN THE ABS ENCE OF SEARCH UNDER S.132 OF THE ACT, THE CONSEQUENTIAL OR INCIDE NTAL ASSESSMENT PROCEEDINGS UNDER S.153C OF THE ACT WILL NOT, IN OU R VIEW, ENTITLE THE AO TO USURP JURISDICTION UNDER S.271AAB OF THE ACT FOR THE PURPOSES OF IMPOSITION OF PENALTY. HENCE, WE DO NO T SEE ANY INFIRMITY IN THE CONCLUSION DRAWN BY THE CIT(A). 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE DISMISSED IN THE EX PARTE PROCEEDINGS. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 01/11/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- & / REVENUE 2 / ASSESSEE ( ) *+ , / CONCERNED CIT 4 ,- / CIT (A) / 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7 289 : / GUARD FILE. BY ORDER / 4 / 5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 01/11/2018