ACIT CEN CIR 13, MUMBAI vs. GIRIRAJ DEVELOPERS, NAVI MUMBAI

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ITA 952/MUM/2012Status: DisposedITAT Mumbai17 May 2016AY 2007-083 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the quantum assessment proceedings were quashed by a previous order of the Tribunal, the penalty levied in relation to those proceedings would not survive.

What were the facts?

The Revenue appealed against the deletion of penalty by the CIT(A). The assessee argued that the penalty would not survive as the assessment proceedings themselves were quashed by the Tribunal in a previous appeal.

What were the issues?

Whether penalty can survive if the assessment proceedings on which it is based are quashed. Whether the conditions for initiating proceedings under Section 153C were fulfilled.

Which sections of the Income-tax Act were involved?

Section 153C,Section 132,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI MAHAVIR SINGH & SHRI ASHWANI TANEJA

For Appellant: Shri Maurya Pratap
For Respondent: Shri Rushabh Mehta
Hearing: 17/05/2016Pronounced: 17/05/2016

This appeal by Revenue is arising out of the order of CIT(A)- 37,Mumbai in Appeal No. CIT(A)-37/IT-29/ACCC-13/11-12 dated 4/11/2011. Assessment was framed by ACIT, Cen. Cir.-13, Mumbai under section 153C of the Income Tax Act, 1961 ( in short ‘the Act’) for the assessment year 2007-08 vide his order dated 30/12/2008.

2.

At the outset, Ld. Counsel for the assessee stated that this penalty levied by the Assessing Officer and deleted by CIT(A) against which Revenue has preferred this appeal, will not survive because the Tribunal in for assessment year 2007-08 has quashed the assessment proceedings vide order dated 24/02/2016 vide para 8.2.5 as under:-

8.2.5 In the case on hand, it is an admitted fact recorded in the orders of assessment that the incriminating documents in the form of diaries were found during the survey proceedings undertaken in the business premises of the assessee firm. It is therefore clear that the concerned documents/diaries did not emanate from out of seizures made in the course of search action. In this factual matrix of the case on hand, we find that the essential condition of section 153C of the Act is not fulfilled. Further, the Assessing Officer vide letter dt. 16/10/2015 has admitted that the satisfaction note for initiating the proceedings u/s 143(3) r.w.s.153C of the Act is not available on record., but has stated that it was the same Assessing Officer for initiation of the proceedings u/s 143(3) r.w.s 153C of the Act. Therefore, we find that the twin conditions (i) that the incriminating documents should have been found during the course of search action under section 132 of the Act and (ii) that the Assessing Officer should have recorded his satisfaction are not fulfilled in this case. Further, the CBDT, Circular No: 24/2015 dt. 31/12/2015 has made its applicability to pending litigation as well. In view of the above factual and legal matrix of the case, we uphold the ground raised that the orders of assessments for Asst. years 2006-07 and 2007-08 passed u/s 143(3) r.w.s. 153C of the Act are without jurisdiction.

In such circumstances, Ld. Counsel for the assessee stated that the penalty proceedings will not survive and the appeal of Revenue deserves to be dismissed on this count only. On the other hand, Ld. Sr. D.R. fairly agreed to the decision.

3.

We find that the quantum assessment has been quashed by the Tribunal in vide order dated 24/02/2016.

Since the quantum assessment is quashed, the penalty will not survive. Accordingly, the appeal of the Revenue is dismissed. 4. In the result, appeal of the Revenue is dismissed.

Order pronounced in the open court on 17/05/ 2016.

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