TMI Blog2019 (1) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the assessee has not challenged that does not mean that the AO has got jurisdiction to visit the assessee with penalty also. Once no incriminating material was found and time limit to issue notice u/s 143(2) had already expired, no action could have been taken against the assessee even in quantum. If no action could have been taken in the quantum proceedings, then how penalty which is to be computed on the basis of quantum addition could be levied upon the assessee ? Considering the above facts and circumstances, and in the light of the above four decisions, we are of the view that penalty is not sustainable in the case of the assessee. It is deleted. - Decided in favour of assessee. - ITA No.1734/Ahd/2017 - - - Dated:- 11-1-2019 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER For The Assessee : Shri Biren Shah, AR For The Revenue : Shri Ranjan Kumar Singh, Sr. DR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order of ld.CIT(A)-11, Ahmedabad dated 6.4.2017 passed for the Asstt.Year 2008-09. 2. Sole grievance of the assessee is that the ld.CIT(A) has erred in confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (Del) iii) CIT Vs. Lata Jain, 384 ITR 543 (Del) 5. On the other hand, the ld.DR relied upon the orders of the Revenue authorities. He contended that both the items which have been claimed as deduction were inadmissible to the assessee. There is no demonstrative evidence, how this mistake has happened. It is very difficult to accept that it was a human error. It can be a deliberate act for claiming undue benefit. With regard to second fold of contention, he submitted that the assessee has not taken any such plea before the Revenue authorities, and therefore, she is precluded from taking such plea. 6. We have considered rival submissions and gone through the record. Hon ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra) has examined scope of section 153A. After a detailed analysis Hon ble Court has summarized legal proposition emerging out for application of section 153A. Such proposition reads as under: 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: i. Once a search takes place under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of original assessment. 7. It is also pertinent to note that in the case of CIT Vs. Kabul Chawla (supra) Hon ble Court has observed that return for Asstt.Years 2002-03, 2005-06 and 2006-07 were accepted under section 143(1) of the Act. Thus, Hon ble Court has considered this acceptance of return as an assessment made under section 143(1). In concluding paragraph, the Hon ble Court has held that on the date of search, assessments for A.Ys. 2002-03, 2005-06 and 2006-07 already stood completed and no incriminating material was unearthed during the search, therefore, no addition should have been made to the income of the assessee. 8. At this stage, it is pertinent to take note of the finding of the Hon ble jurisdictional High Court in the case of CIT Vs. Somaya construction Ltd., 387 ITR 529 (Guj). It reads as under: 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 9. We are conscious of the fact that we are dealing with penalty imposed for addition of ₹ 4,34,488/-. In the present proceedings we cannot disturb and/or we are not disturbing the addition made by the AO which attained finality. The assessee has to pay tax on this addition. Issue before us is, if a specific defense was not taken by the assessee in the quantum proceedings, whether that defense now be taken for absolving herself from levy of penalty ? To our mind, quantum proceedings as well as penalty proceedings are independent to each other. Even if in the quantum proceedings assessee has agreed to for an addition. If she has some legal defense available, then on the basis of that defense she can absolve herself form the levy of penalty. It is a fundamental rule that jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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