2018 (2) TMI 748

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....formation in respect of the assessee i.e. M/s. Jainco Developers Pvt. Ltd. was passed on to the present Assessing Officer along with satisfaction recorded on 21.02.2014 by the DCIT, Central Circle, Ghaziabad. The material received from Central Circle, Ghaziabad was thoroughly examined and satisfaction in concurrence to the earlier satisfaction recorded by DCIT, Central Circle, Ghaziabad was also recorded. During the course of search and seizure operation, certain documents, loose papers and other assets were found / seized. The documents seized from the premises of the searched party in relation to the assessee i.e., M/s Jainco Developers Pvt. Ltd. as listed below was forwarded to the Assessing Officer by the Assessing Officer of the searched party for necessary action as per provisions of section 153C of the I.T. Act: a) Satisfaction note dated 21.02.2014. b) Photocopy of seized documents (216 pages) c) Appraisal report of M/s Aggarwal Associates & Jainco Group (pages-6(1 to 99)) d) Part-A, chapter-XI / details of documents taken of extracts from seized documents (pages - 300 to 302). e) Part-A chapter -XII - details of immovable properties (pages 303 to 305)." 4. ....

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....alty orders. In the assessment order the A.O has mentioned at page 2 therein the search had been carried out in the business premises of M/s Aggarwal Associates and Jainco Group and on receipt of the satisfaction note dated 21.02.2014, photocopies of seized documents and appraisal report, he issued notice u/s 153C for A.Y. 2006- 07 to 2011-2012. The assessment for the impugned year 2012-13 was completed u/s 143(3) as it was the search year. The surrender of Rs. 2.10 crores on account of discrepancies in the books of accounts and documents seized from the appellant's premises was accepted as per the return of income. This appears to be a contradictory statement by the A.O. as the books of accounts and documents that were forwarded to the A.O. by the A.O. of the searched officer, after recording satisfaction that they belonged to the appellant company, could not be said to have been seized from the appellant company's premises. If it were so, the A.O. would not have initiated and completed the assessment u/s 153C. The A.O. under the mistaken premise that the surrender had been made on the basis of the discrepancies found in the books and document as seized from the appellant&....

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....is found to be false and would not have been found to be so had the search not been conducted (b) "specified previous year" means the previous year- (i) which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or (ii) in which search was conducted. 3.4.1. Perusal of sub section (1) of Section 271AAA clearly shows that penalty can levied under this section only in a case where search action u/s 132 has taken place on or after 01.06.2007 but before 01.07.2012. In the present case the search has taken place on 19.10.2011 but there has been no search on the appellant company. It is very clearly mentioned at page 2 of the assessment order that the search action has taken place at the business premises of M/s Agarwal Associates and Jainco Group and the document seized from the premises of the searched parties as listed at page 2 have been received by the A.O of the appellant for necessary action u/s 153C of the I.T Act. On receiving the satisfaction of the A.O. o....

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....AA- not 271(l)(c). Applying the reverse logic as held by the ITAT Delhi in the aforestated case, in a case where no search has taken place at the assessee - premises, no penalty u/s 271AAA can be levied. In such a situation, the A.O. ought to have levied penalty u/s 271(l)(c). Accordingly grounds 1-3 are allowed. 3.5 Grounds 4 to 6 challenge the penalty on merits as well as the calculation of the said penalty. Although there are decisions of Delhi ITAT such as in the case of Neerat Singhal 146 ITD 152 for the proposition that where the authorized officer of the department has not raised any specific query regarding manner in which undisclosed income was derived and on the contrary, the assessee tried to explain the earning of such income in his reply u/s 132(4), the penalty u/s 271AAA was not justified, however I do not propose to go into the merits of the case. Since the penalty stands deleted vide grounds 1 to 3 above, these grounds become infructuous and are accordingly dismissed." 8. Aggrieved with the such order of the Ld.CIT(A), the Revenue is in appeal before the Tribunal. 9. We have heard rival arguments made by both the sides and perused the material available on rec....