TMI Blog2015 (9) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... xed in the year of sale of plots. We do not find any error in the findings of the Commissioner of Income Tax (Appeals). - Decided in favour of assessee. - ITA No. 1278/PN/2013, ITA No. 1333/PN/2013 - - - Dated:- 21-8-2015 - SHRI R.K. PANDA AND SHRI VIKAS AWASTHY, JJ. For The Appellant : Shri Nikhil Pathak For The Respondent : Shri Rajesh Damor ORDER PER VIKAS AWASTHY, JM : These three appeals have been filed by the Revenue against the orders of Commissioner of Income Tax (Appeals)-I, Nashik deleting the penalty levied u/s. 271(1)(c) in assessment year 2006-07 in the case of each assessee. All the impugned orders are dated 18-03-2013. 2. The assessees in all the appeals are closely related and are engaged in the business of building and land development. The assessees have filed their respective return of income as individuals. The assessees had jointly purchased two parcels of land measuring 8000 Sq. Mtrs. And 3441 Sq. Mtrs. for consideration of ₹ 2.50 Crores as per registered purchase deed from Luthra family. The assessees had plan to sale the aforesaid land after plotting. The assessees collected advances from the prospective customers for sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. (Supra) and Hon ble ITAT, Pune in the cases of Dhanvarsha Builders and Developers (P) Ltd. Vs. DOT, 102 ITD 375 and Golani Brothers Vs. ACIT 75 ITD 1. The contention of the appellant that where income has been taxed in the incorrect year, penalty u/s 271(l)(c) is not leviable is supported by the following decisions i) CIT Vs. Manilal Tarachand 254 ITR 630 (Guj) ii) CIT Vs. Kusum Products Ltd. 203 ITR 672 (Cal) iii) Niranjanlal Vs. ITO 14 ITD 439 Therefore, the penalty u/s 271(l)(c) is also not justified on above count. 7.6 It has also been noticed that the appellant has not contested the addition made by the A.O. in further in ITAT or High Court and has paid tax and interest on assessment. Against these findings of the Commissioner of Income Tax (Appeals), the Revenue has come in appeal. 4. Shri Rajesh Damor, representing the Department submitted that during search proceedings in the case of Luthra family certain incriminating documents were seized from which it was found that the assessees had paid total consideration of ₹ 5.30 Crores for purchase of land. The sale price as per the registed document was ₹ 2.50 Crores. An examinat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the orders of Commissioner of Income Tax (Appeals). The ld. AR submitted that the alleged documents on the basis of which reassessment proceedings were initiated, were found during search proceedings in the case of Luthra Group. If any incriminating material is found against the assessees, the right course of action would have been to initiate proceedings u/s. 153C of the Act and not u/s. 148 of the Act. The provisions of section 153C over ride the provisions of sections 139, 147, 148, 149, 151 and 153 of the Act. Thus, the reassessment proceedings are in itself bad in law. In support of his submissions the ld. AR placed reliance on the following decisions: i. ITO Vs. Arun Kumar Kapoor; 140 TTJ 249 (Amritsar Bench). ii. Sri Moti Punjabi-HUF Vs. ACIT; ITA No. 1474/PN/2011, A.Y. 2003-04, decided on 21-11-2012. iii. ITO Vs. Shri Shailendra B. Agrawal; ITA Nos. 1825 to 1828/PN/2012, A.Ys. 2004-05 to 2007-08, decided on 09-12-2014. 5.1 The ld. AR further submitted, that the assessees and the other co-owner had received advance payments from prospective customers in cash as on-money. The Assessing Officer has taxed the said money in the year of receipt. It is a well settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of search belonging to other person, the same shall be handed over to the Assessing Officer having jurisdiction over such other person. The section over rides the provisions of sections 147 and 148 of the Act. We find force in the submissions of the ld. AR. In the present case, reassessment proceedings were initiated on the basis of incriminating document found against the assessee during search proceedings in the case of Luthra Group. Thus, the right course of action for the Revenue is to initiate proceedings u/s. 153C and not u/s. 148 of the Act. Our view is supported by the decision of Amritsar Bench of Tribunal in the case of ITO Vs. Arun Kumar Kapoor (supra), wherein, under similar circumstances the Tribunal has held that the proceedings u/s. 148 are illegal and void ab initio. The relevant extract of the order in the case of ITO Vs. Arun Kumar Kapoor (supra) is as under: 7.2. The undisputed facts are that a search was conducted under s. 132 of the Act in the case of M/s. Today Homes Infrastructure (P.) Ltd. on 28th March, 2006, during the course of which certain incriminating documents were allegedly seized. It is also a matter of record that the Dy. CIT, Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been followed by the AO and, therefore, assessment has become invalid. We also observe that the CIT(A) was justified in following the ratio laid down by the Hon ble Supreme Court in the case of Manish Maheshwari v. Asstt. CIT [2007] 289 ITR 341 / 159 Taxman 258 wherein it has been held that if the procedure laid down in s. 158BD is not followed, block assessment proceedings would be illegal. The CIT(A) has correctly observed that the provisions of s. 153C are exactly similar to the provisions of s. 158BD of the Act in block assessment proceedings. Thus, considering the entire facts and the circumstances of the present case, we hold that the CIT(A) was fully justified in quashing the reassessment order. We also do not find any merit in the submissions of the learned Departmental Representative that during the course of search, it was found at premises of M/s. Today Homes Infrastructure (P.) Ltd. pertaining to M/s. P.R. Infrastructure Ltd. and not the assessee. In this regard, we may point out that the contention raised by the learned Departmental Representative is factually incorrect and contrary to the available records of seized documents specifically mentioned in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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