Shri Baqir M.Kakroliwala, Surat v. The ACIT.,Circle-3,, Surat

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI G.D. AGARWAL VICE-PRESIDENT (AZ) AND SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER DATE OF HEARING : 20/1/2011 DRAFTED ON: 25/1/ 2011 IT(SS)A NO.47/AHD/2009 BLOCK ASSESSMENT 1990-99 TO 1999-2000 UPTO 29/10/1999 BAQUIR M KANAKROLIWALA A-1001 YOGI COMPLEX NEW RANDER ROAD SURAT VS. THE ASST.CIT CIRCLE-3 SURAT PAN/GIR NO. : ACAPK 1911 E ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI S.N. DIVATIA RESPONDENT BY: SHRI K.MADDHUSUDAN SR. D.R. O R D E R PER SHRI MUKUL KR. SHRAWAT JUDICIAL MEMBER : THIS IS AN APPEAL AT THE BEHEST OF THE ASSESSEE W HICH HAS EMANATED FROM THE ORDER OF LEARNED CIT(APPEALS)-II SURAT DATED 12/06/2009. THE APPELLANT IS AGGRIEVED BY THE CONFI RMATION OF PENALTY OF RS.3 66 000/- LEVIED U/S. 158BFA(2) OF THE I.T.ACT. FURTHER IN THE GROUNDS ITSELF IT HAS BEEN AGITATED THAT THE ORDER PASSED U/S.158BD OF THE I.T.ACT WAS BARRED BY LIMITATION THEREFORE IN CON SEQUENCE THEREUPON THE IMPUGNED PENALTY DESERVES TO BE DELETED. 2. AT THE OUTSET IT HAS BEEN INTIMATED THAT THE PE NALTY IN QUESTION HAD EMERGED FROM THE ASSESSMENT ORDER PASSED U/S.158BD R.W.S.158BC OF THE IT(SS)A NO.47/AHD/20 09 BAQIR M.KAKROLIWALA VS. ASST.CIT BLOCK ASSESSMENT 1990-99 TO 1999-2000 UPTO 29-10-19 99 - 2 - I.T.ACT DATED 29/05/2006. THE IMPUGNED PENALTY WAS IMPOSED VIDE AN ORDER U/S 158BFA(2) DATED 28.3.2008. IT HAS BEEN N ARRATED THAT A SEARCH U/S.132 OF THE I.T.ACT WAS CARRIED OUT AT THE BUSIN ESS PREMISES OF ONE M/S. OHM DEVELOPERS SURAT ON 29/10/1999. THEREAF TER AN ACTION U/S.158BD WAS INITIATED AGAINST THE ASSESSEE. THERE WAS A MENTION OF A SEIZED DOCUMENT THROUGH WHICH IT WAS FOUND THAT APA RT FROM THE CHEQUE PAYMENTS THE ASSESSEE HAD ALSO MADE THE PAYMENT IN CASH OF RS. 6 10 000/- TO THE ORGANIZERS OF YOGI COMPLEX FOR AC QUIRING FLAT NO. B- 103. HENCE THE TOTAL UNDISCLOSED INCOME WAS ASSESS ED AT RS.6 10 000/-. IN CONSEQUENCE THEREOF PENALTY PROCEEDING U/S.158B FA(2) WAS INITIATED. SINCE THE ASSESSEE WAS UNABLE TO EXPLAIN THE SOURCE OF THE SAID UNDISCLOSED INCOME HENCE THE ASSESSING OFFICER HA S LEVIED THE PENALTY AS PER LAW OF RS.3 66 000/- VIDE ORDER DATED 28/03/ 2008. 3. WITH THIS BRIEF BACKGROUND WE HAVE HEARD BOTH T HE SIDES. IT HAS BEEN INFORMED THAT THE VERY BASIS OF LEVY OF PENALT Y I.E. THE ASSESSMENT ORDER PASSED U/S.158BD OF THE I.T.ACT DATED 29/05/2 006 WAS CHALLENGED BEING BARRED BY LIMITATION AND THAT OBJECTION OF THE ASSESSEE WAS ACCEPTED BY THE RESPECTED CO-ORDINATE BENCH (ITAT AHMEDABAD - CAMP AT SURAT) BEARING IT(SS)A NO.42/AH D/2007 ORDER DATED 14/09/2009 WHEREIN VIDE PARAGRAPH NO.12 IT W AS HELD AS UNDER:- 12. IN THE PRESENT CASE BEFORE US ALSO THE ASSESSI NG OFFICER HAS ISSUED NOTICE UNDER SECTION 158BD AFTER 2 YEARS FROM THE MONTH OF NOTICE UNDER SECTION 158BD WAS ISSUED AND THEREF ORE IT WAS TIME BARRED BY LIMITATION . ACCORDINGLY WE QUASH THE ORDER PASSED BY THE ASSESSING OFFICER AS BEING TIME BARRE D BY THE LIMITATION AND ALLOW THE ASSESSEES APPEAL IN VIEW OF THE DECISION IT(SS)A NO.47/AHD/20 09 BAQIR M.KAKROLIWALA VS. ASST.CIT BLOCK ASSESSMENT 1990-99 TO 1999-2000 UPTO 29-10-19 99 - 3 - OF THE DELHI ITAT IN THE CASE OF MANOJ AGARWAL VS. DCIT (2008) 113 ITD 377 DELHI SPECIAL BENCH. 4. WHEN IT WAS INFORMED TO THE LD. CIT(A) HE HAS BR USHED ASIDE THE AFOREMENTIONED ORDER OF THE TRIBUNAL BY QUOTING DAR MENDRA TEXTILE AND THAT HE WAS CONSTRAINED NOT TO FOLLOW THE DECISION OF THE TRIBUNAL. BUT IN OUR CONSCIENTIOUS VIEW SINCE THE ASSESSMENT ORDER ITSELF STOOD QUASHED ON THE GROUND OF LIMITATION BY THE RESPECTED CO-ORD INATE BENCH ( SUPRA) THEREFORE THE SUBSEQUENT PROCEEDINGS SUCH AS PE NALTY PROCEEDINGS U/S.158BFA(2) OF THE I.T.ACT BEING DIRECTLY DEPENDE NT UPON THAT ASSESSMENT ORDER ALSO DO NOT SURVIVE. 5. IN THE RESULT THE PENALTY IN QUESTION IS HEREBY QUASHED AND ASSESSEES APPEAL IS ALLOWED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 28/ 02 /2011. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 28/ 02 /2011 T.C. NAIR SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DEP ARTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT( APPEALS)-II SURAT 5. THE DR AHMEDABAD BENCH. 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD IT(SS)A NO.47/AHD/20 09 BAQIR M.KAKROLIWALA VS. ASST.CIT BLOCK ASSESSMENT 1990-99 TO 1999-2000 UPTO 29-10-19 99 - 4 - 1. DATE OF DICTATION.. 20/1/2011 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25/1/2011 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S28/02/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 28.2.11 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER