M/s. Sagar Developers, Nadiad V. The Income Tax Officer, Ward-4, Nadiad

ITSSA 86/AHD/2015

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3519 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2003-2004
• Appeal Filed On: 15-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILASH V SHIUDE
• Assessee Lawyers: P M MEHTA; GULABJI M THAKOR
• Section: 132

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ IT(SS) NO. 86, 87 & 88/AHD/2015 / ASSTT. YEARS: 2003-04, 2004-05 & 2005-06 M/S SAGAR DEVELOPERS, NADIAD. PAN: AAOFS5847B VS. ITO, WARD-4, NADIAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : P.M. MEHTA & GULABJI M. THAKOR, A.R REVENUE BY : VILASH V. SHIUDE, SR. DR ! / DATE OF HEARING : 18/12/2017 '#$ ! / DATE OF PRONOUNCEMENT: 19 /12/2017 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT THREE APPEALS ARE DIRECTED AT THE INST ANCE OF THE ASSESSEE AGAINST THE COMMON ORDERS OF LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) DATED 28.01.2015 PASSED FOR ASSESSMEN T YEAR 2003-04 TO 2005-06. 2. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LEARNE D COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PE NALTY OF RS. 5,08,500/- , RS. 2,25,500/- & RS. 3,57,000/- IMPOSED BY THE AS SESSING OFFICER U/S. 271(1)(C) OF THE INCOME TAX ACT IN ASSESSMENT YEARS 2003-04 TO 2005-06. IT(SS) NO. 86,87 & 88/AHD/2015 A.YRS. 2003-04 TO 2005-06 2 3. AT THE VERY OUTSET, LEARNED COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ADDITIONS RELATING TO VISITING THE ASSESSEE WIT H THE PENALTY HAS BEEN DELETED BY THE TRIBUNAL IN QUANTUM APPEAL I.E. ITA NO. 64 TO 67/AHD/2012. HE PLACED ON RECORD COPY OF THE TRIBUNALS ORDERS. THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS UNABLE TO CONTROVER T THIS CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. 4. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE FIND THAT FACTS ON ALL VIT AL POINT ARE COMMON IN THESE THREE ASSESSMENT YEARS. THEREFORE FOR THE FAC ILITY OF REFERENCES WE ARE TAKING OF THE FACTS FROM ASSESSMENT YEAR 2003-0 4. THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 27.11.2003 DECLARING TOTAL INCOME AT RS. 28,540/-. A SEARCH U/S. 132 OF THE INCOME TAX ACT W AS CONDUCTED IN THE CASE OF SHRI RAMESHBHAI BABUBHAI SHAH ON 03.04.2008 . DURING THE COURSE OF SEARCH A LAPTOP WAS FOUND WHICH CONTAINS BOOKS O F ACCOUNT OF 65 ENTITIES. THEREFORE A PROCEEDING U/S. 153C WAS INIT IATED AGAINST THE ASSESSEE. THE LEARNED ASSESSING OFFICER HAS MADE AD DITIONS. WHEN THE DISPUTE TRAVELLED BEFORE THE TRIBUNAL THEN, IT WAS CONTENDED THAT ACTION U/S. 153C COULD BE TAKEN IF DURING THE ASSESSMENT PROCEE DINGS OF THE SEARCHED PERSON IT CAME TO THE NOTICE OF ASSESSING OFFICER T HAT MATERIAL RELATING TO SOME OTHER ASSESSEE, EXHIBITING ESCAPEMENT OF INCOM E WAS FOUND DURING COURSE OF SEARCH. THE ASSESSING OFFICER OF THE SEAR CHED PERSON WAS REQUIRED TO RECORD HIS SATISFACTION THAT ACTION AGA INST SUCH OTHER PERSONS WHOM MATERIAL WAS FOUND AT THE TIME OF SEARCH, SHOW ING ESCAPEMENT OF INCOME. IF THIS SATISFACTION WAS NOT RECORDED BY TH E A.O. OF SEARCHED PERSON THEN NO PROCEEDING U/S. 153C CAN BE TAKEN UP AGAINS T SUCH OTHER PERSONS. THE TRIBUNAL HAS RECORDED A FINDING THAT NO SATISFA CTION WAS RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON AND TH EREFORE PROCEEDING AGAINST THE ASSESSEE U/S. 153C IS NOT SUSTAINABLE. ON THE BASIS OF THIS REASONING TRIBUNAL HAS QUASHED THE ASSESSMENT ORDER S. IT(SS) NO. 86,87 & 88/AHD/2015 A.YRS. 2003-04 TO 2005-06 3 5. SUB-CLAUSE (III) OF SECTION 271(1)(C) PROVIDES M ECHANISM FOR QUANTIFICATION OF PENALTY. IT CONTEMPLATES THAT THE ASSESSEE WOULD BE DIRECTED TO PAY A SUM IN ADDITION TO TAXES, IF ANY, PAYABLE BY HIM, WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, THE QUANTIFICATION OF THE PENALTY IS DEPENDED UPON THE ADDITIONS MADE TO THE INCOME OF THE ASSESSEE. SINCE ASSESSMENT ORDERS HAV E BEEN QUASHED IN THESE ASSESSMENT YEARS THEREFORE THE VERY BASIS TO CONSTRUE THE CONCEALMENT OF INCOME OR EVASION OF TAXES WOULD EXT INGUISHED. THEREFORE THERE CANNOT BE ANY PENALTY UPON THE ASSESSEE. WE A LLOW ALL THESE APPEALS AND DELETE THE PENALTY. ORDER PRONOUNCED IN THE COURT ON 19 TH DECEMBER, 2017. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 19/12/2017 %& '() *%)$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. + / THE RESPONDENT. 3. ,, - / CONCERNED CIT 4. - ( ) / THE CIT(A) 5. )./ '' , / DR, ITAT, 6. /01 2 / GUARD FILE. %& / BY ORDER, 3 / ,4 (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD