TMI Blog2017 (1) TMI 1193X X X X Extracts X X X X X X X X Extracts X X X X ..... c) - Decided in favour of assessee - I.T.A No. 91/Kol/2014 - - - Dated:- 13-1-2017 - Shri A. T. Varkey, JM And Dr. A. L. Saini, AM For the Appellant: Shri S. M. Surana, Advocate For the Respondent: Shri BaniBrata Dutta, JCIT, Sr. DR ORDER Per Dr. A. L. Saini, AM The captioned appeal filed by the assessee pertaining to Assessment Year 2008-09, is directed against the order passed by the Ld. CIT(A), Central-II, Kolkata in appeal no. 93/CC-XVIII/CIT(A)C-II/11-12, dated 13.11.2013, which in turn arises out of assessment order passed by the DCIT, Central Circle-XVIII, Kolkata u/s. 153A/143(3) of the Incometax Act, 1961 (hereinafter referred to as the Act ), dated 31.12.2010. Penalty order u/s. 271(1)(c) of the Act was passed by DCWT, Central Circle-XVIII, Kolkata. 2. The facts of the case qua the assessee are that in the case of the assessee a search and seizure operation u/s. 132 of the Act was conducted in the M/s. Kaushalya Infrastructure Group of cases on 26/27.03.2009 and on subsequent dates. This included search also at the residence of the assessee. During the course of search, the search party found out some material where the search party seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o basis of the preparation of the accounts filed along with the return of income. So, those accounts were rightly rejected at the stage of assessment. Besides, no disclosure was made by the assessee during search operation. So, the method applied for determining the assessee's total income at the assessment stage i.e. by applying a certain percentage on the gross receipts by the assessee from the Kaushalya Group of Companies was the only reasonable method which could be applied under the given circumstance. In the reply to the penalty show cause notice the assessee has not raised any objection regarding the method of computation of total income, adopted in the assessment order, but has only objected against the percentage (1.35) applied. Butat the assessment stage he could not also justify the reason for adopting the percentage at 1.32. Here a very vital aspect should be mentioned against that the assessee did not file any appeal against the assessment order. In view of the above discussion, the submission filed by the assessee is not accepted. As such penalty u/s.271(I)(c) is imposed in this case as per calculation made hereunder: Total income assessed as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Though, in the case of appellant, he did not disclose any income u/s 132(4) of the Act. In view of above, I am of the opinion that the AO was justified in imposing the penalty u/s. 271(1)(C) of the Act. His action is in accordance with the provisions of the Act. Hence, the penalty imposed by the AO u/s. 271(1)(C) amounting to ₹ 4,35,357/- is confirmed. The ground no. 1 to 4 are dismissed. 4. Not being satisfied with the order of the Ld. CIT(A) the assessee is in further appeal before us and has taken the following grounds: 1. For that the order of the Ld. CIT(A) is arbitrary, illegal and bad in law. 2. For that the Ld. CIT(A) erred in confirming the penalty when the tax payer filed the return before the due date provided in his case under Explanation-(3) to section 271(1)(C) and the provisions of sec. 271(1)(C) were not applicable since the tax payer was not an assessee within the meaning of the provisions of Income Tax Act, 1961 at the time of search. 3. For that in view of the provisions contained in I.T. Act, 1961 making clear distinction between the word Person and word Assessee the tax payer was not liable to the penalty under sec. 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act defines the term person as follows: (31) person includes- (i) an individual, (ii) a Hindu undivided family, (iii) a company, (iv) a firm, (v) an association of persons or a body of individuals, whether incorporated or not, (vi) a local authority, and (vii) every artificial juridical person, not falling within any of the preceding sub-clauses. Explanation.-For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains; 6. The Ld AR for the Assessee has stated that after going through section 2(7) of the Act, the definition of assessee and section 2(31) of the Act the definition of person it is very much clear that assessee under consideration was not an assessee at the point of search. The assessee under consideration never filed the return of income before the search and at the time of search also he was not assessee. Therefore, the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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