Income Tax Appellate Tribunal - Indore
M/S Keti Infrastructure Pvt. Ltd., ... vs Deputy Commissioner Of Income Tax ... on 13 January, 2021
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL,
INDORE BENCH, INDORE
BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER
AND HON'BLE MANISH BORAD, ACCOUNTANT
MEMBER
ITA.No. ITA No.540/Ind/2017 & ITA No.1309/Ind/2016
Assessment Year 2011-12 & 2012-13
M/s Keti Infrastructure Pvt.Ltd,
31/6, Vatsalya Chambers,
Sneh Nagar Main Road
Indore
PAN : AADCK0722H : Appellant
V/s
DCIT (Central),
Indore : Revenue
Revenue by Shri Harshit Bari, Sr.DR
Assessee by Shri Pankaj Shah, CA
Date of Hearing 11.01.2021
Date of Pronouncement 13.01.2021
ORDER
PER MANISH BORAD, A.M
The above captioned appeals filed at the instance of the assesse pertaining to Assessment Years 2011-12 and 2012-13 are M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016 directed against the orders of Ld. Pr. Commissioner of Income Tax- III, (in short 'Ld. CIT], Indore 05.05.2017 and 15.09.2016 which are arising out of the order u/s 271AAA of the Income Tax Act 1961(In short the 'Act') dated 25.9.2014 framed by DCIT (Central), Indore.
2. Sole grievance raised in both these appeals is against the finding of Ld. CIT(A) confirming the levy of penalty u/s 271AAA of the Act by the Ld. A.O at Rs.7,24,540/- and Rs.30,04,050/- levied for Assessment Years 2011-12 and 2012-13 respectively.
3. At the outset Ld. Counsel for the assessee submitted that the impugned penalty was levied for the withdrawal of excess claim of depreciation during assessment proceeding post to search on 05.05.2011 carried out u/s 132 of the Act at Keti-Kalyan Group. Ld. Counsel for the assessee further submitted that the issue raised in these appeals is squarely covered in favour of the assessee and the impugned penalty is liable to be deleted in view of the decision of Hon'ble I.T.A.T. Indore in one of the group case of the assessee namely DCIT V/s Kalyan Toll Infrastructure Limited & DCIT V/s Kalyan-Keti Toll Pvt. Ltd in ITA Nos.928 & 929/Ind/2019 dated 28.9.2020. He further submitted that in the instant case also 2 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016 defective notice was issued without specifying the charge to be leveled against the assessee u/s 271AAA of the Act and on the merits also the issue is covered in favour of the assessee.
4. Ld. Departmental Representative though supported the order of lower authorities could not controvert this fact that similar issue have been decided in other group cases to which the assessee belongs.
5. We have heard rival contentions and perused the records placed before us. The sole grievance by the assessee for Assessment Years 2011-12 and 2012-13 is against the levy of penalty u/s 271AAA of the Act at Rs.7,24,540/- and Rs.30,04,450/- which was confirmed by Ld. CIT(A) and was imposed by the Ld. A.O on the alleged concealed income on account of excess claim of depreciation.
6. Ld. Counsel for the assessee has submitted that on legal ground itself the impugned penalty deserves to be deleted as defective notice was serviced to the assessee which has made the proceedings u/s 271AAA r.w.s. 274 of the Act void ab initio. 3 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016
7. On perusal of the notice we find that similar type of notice were issued for Assessment Years 2011-12 and 2012-13. For the purpose of adjudication we reproduced below the notice for Assessment Year 2011-12:-
NOTICE UNDER SECTION 274 READ WITH SECTION 271AAA OF THE INCOME TAX ACT, 1961 PAN- AADCK0722H OFFICE OF THE Deputy Commissioner of Income Tax (Central), Indore Date: - 05/03/2014 M/s. Keti Infrastructure Private Limited, 31/6, Vatsalya Chambers, Sneh Nagar, t Main Road, Indore Whereas in the course of proceedings before me for the assessment year 2011·12 it appears to me that you:-
*Have without reasonable cause failed to furnish me return of income with you were required to furnish by a notice given under section 22(1)/22(2}/34 of the India Income Tax Act, 1922 or which you were required to furnish under section 139)1} or by a notice given under section 139(2)/148 of the Income Tax Act 1961, No dated or have without reasonable cause failed to furnish it within the allowed and the manner required by the side section 139(1) or by such notice.
*Have without reasonable cause failed to comply with a notice under 4 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016 section 22(4)/23{2} of the India Income Tax Act, 1922 or under section 142(1)/143(2) of the Income Tax Act1961. No. dated have concealed the particulars of your Income or furnished inaccurate particulars of such Income.
You are hereby requested to appear before me on 01/04/2014 at 3:00 pm and show cause why an order imposing a penalty on you should not be made under section 271AAA of the Income Tax Act 1961 if you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may show cause in writing on or before the side date which will be considered before any such order is made under section 271AAA.
PEN.REG.NO Sd/-
(Ram Kumar Yadava)
Deputy Commissioner of Income Tax (Central) Indore
8. On perusal of the above referred notice we find that the Ld. A.O has not mentioned specific charge in the notice as provided u/s 271AAA r.w.s. 274 of the Act. Rather Ld. A.O has merely mentioned one line imported from section 271(1)(c) of the Act which in the instant case is not applicable on the assessee. On going through the above reproduced defective notice we find that similar notice was issued to another group concern of the assessee M/s Keti Toll Infrastructure Ltd on 26.3.2014 and the legal issue of levy of 5 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016 penalty u/s 271AAA of the Act was before this Tribunal in ITA No.928/Ind/2019 and the penalty u/s 271AAA of the Act was deleted by this Tribunal observing as follows:-
"13. The above notice clearly spells out that the provisions under which the notice was issued for levy of penalty u/s 271AAA but the charges mentioned therein refers to those provided in Section 271(1)(c) of the Act. Ld. A.O failed to mention the charges provided u/s 271AAA of the Act. We find that this issue is also squarely covered in favour of the assessee by the decision of Hon'ble Coordinate Chandigarh Bench in the case of Gillco Developers & Builders (P) Ltd (supra) wherein the Tribunal after observing that the notice issued is defective held in favour of the assessee and quashed the penalty proceedings observing as follows:-
19. Now coming to the legal issues raised by the assessee, the Ld. Counsel for the assessee has contended that even the notice served upon the assessee u/s 274 of the Act is also invalid. We have gone through the show cause notice issued to the assessee. The Ld. Counsel for the assessee has invited our attention to the letter / notice issued u/s 274 read with section 271AAA of the Act dated 13.1.2014, which for the sake of reference is extracted as under:-
"NOTICE U/S 274 READ WITH SECITON 271AAA OF THE INCOME TAX ACT, 1961 Office of the Dy. Commissioner of Income Tax, Central Circle -1II, Aayakar Bhawan, Sector 17-E, Chandigarh Dated 13.01.2014 6 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016 To M/s Gilco Developers and Builders Pvt Ltd., SCF 23024, Gilco Valley Morinda Ropar Road, Ropar, Punjab 140001 Whereas in the course of proceedings before me for the assessment year 2012-13, it appears to me that you have not recorded the true particulars of your income in the books of accounts or not disclosed accurate particulars of income. Therefore, you are required to show cause as to why penalty proceedings u/s 274 read with section 271AAA(1) of the income Tax Act may not be levied against you. In this regard, you are hereby requested to appear before the undersigned at 11.00A.M. on 20.02.2014 and show cause why an order imposing a penalty on you should not be made u/s 271AAA(1) of the Income-tax Act, 1961). If you do not wish to avail yourself of this opportunity of being heard in person or though authorized representative you may show cause in writing on or before the said date which will be considered before any such order is made u/s 271AAA(1).
(Seal) Sd/-
(Laganpreet Sandhu).
Dy. Commissioner of Income Tax, Central Circle-II, Chandigarh"
20. A perusal of the above notice shows that though the Assessing officer has intended to initiate penalty proceedings u/s 271AAA(1) of the Act, however, the wording written in the body of the letter does not conform to the charges of the provisions of section 271AAA of the Act, rather, the assessee has been show caused on the charge of furnishing of inaccurate particulars of income, which falls under the scope and purview of section 271(1)(c) of the Act. The assessee, therefore, is not show caused for levy of 7 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016 penalty under the provisions of section 271AAA, rather for doing an act inviting penalty u/s 271(1)(c) of the Act, which otherwise is neither arising out of the facts of the case nor established against the assessee. Thus, the penalty proceedings conducted against the assessee u/s 271AAA of the Act were invalid at its very inception because of the defective and invalid show cause notice, rendering the entire penalty proceedings void abnitio. The penalty levied against the assessee is thus not sustainable on this score also.
14. As the above decision of Hon'ble Chandigarh Tribunal is squarely applicable on the assessee we therefore respectfully following the same decide this legal issue also in favour of the assessee holding that the penalty proceedings carried out in the case of the assess were void ab- initio since the notice issued itself is defective and not in accordance with law. Thus in view of above decision and in the given facts and circumstances of the case and various judgments referred above, we find no reason to interfere in the finding of Ld. CIT(A) deleting the penalty of Rs.70,78,640/- levied u/s 271AAA of the Act. Accordingly the ground raised in ITA No.928/Ind/2019 by the revenue stands dismissed".
9. On perusal of above we find that since the legal issue remains the same and so is the notice being defective and not in accordance with law has been issued in the case of assessee for Assessment Year 2011-12 and 2012-13 the penalty proceedings u/s 271AAA of the Act are held to be void ab initio. We accordingly delete the penalty [levied u/s 271AAA of the Act at Rs.7,24,540/- and Rs.30,04,450/- on this legal ground itself. 8 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016
10. As regards merits of the case though academic in nature which in the instant appeals relates to levy of penalty for withdrawal of excess claim of depreciation during the course of assessment proceedings, we find that after being subjected to the search proceedings u/s 132 of the Act on 05.05.2011, the appellant surrendered the claim of excess depreciation during the course of assessment proceedings. The manner of surrender of depreciation claim was explained during the search proceedings and the same was accepted by Ld. A.O. The assessment order was passed disallowing the depreciation surrendered by the appellant. Demand notice u/s 156 of the Act pursuant to order u/s 153A of the Act was passed with NIL demand. The quantum order was accepted and no further appeal was preferred. Immunity from levy of penalty on undisclosed income of specified previous year is available as provided in sub-section 2 of the 271AAA of the Act, if the assessee;
(i) In the course of search, in a statement under sub-section 4 of section 132(4) of the Act, admits the undisclosed income and specifies the manner in which such income has been derived;
9 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016
(ii) substantiates the manner in which the undisclosed income was derived;
(iii) Pays the tax, together with interest, if any, in respect of the undisclosed income.
11. Now examining the facts of the case of the assessee, we find that firstly the excess depreciation claimed pertains to the specified year under consideration, secondly the alleged undisclosed income in the form of excess depreciation was admitted during the course of search, thirdly assessee has substantiated the manner in which income has been derived and lastly as regards the demand of tax the same is not applicable since there was no tax on surrender of depreciation claim withdrawn during the assessment proceedings since there were losses.
12. We therefore in the given facts and circumstances of the case are of the view that on merit also the assessee deserves the relief and we accordingly allow the grounds raised on merits by the assessee and delete the penalty u/s 271AAA of the Act at Rs.7,24,540/- and Rs.30,04,450/- for Assessment Year 2011-12 10 M/s Keti Infrastructure Pvt. Ltd ITA No.540/Ind/2017 & 1309/Ind/2016 and 2012-13 respectively. Accordingly both the appeal of the assessee stands allowed.
13. In the result appeals of the assessee for Assessment Years 2011-12 and 2012-13 are allowed.
The order pronounced in the open Court on 13.01.2021.
Sd/- Sd/-
( KUL BHARAT) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
दनांक /Dated : 13 January, 2021
/Dev
Copy to: The Appellant/Respondent/CIT concerned/CIT(A)
concerned/ DR, ITAT, Indore/Guard file.
By Order,
Asstt.Registrar, I.T.A.T., Indore
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