Anurag Gupta , Hyderabad V. Asst. Commissioner of Income Tax, Central Circle-3(1), Hyderabad

ITA 114/Hyd/2020

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 8597 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y.V.S.T. SAI
• Keywords: Search and seizure
• Section: 132; 143(3); 142(1); 292BB; 143(2); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B”: HYDERABAD (THROUGH VIRTUAL CONFERENCE) B EFORE SH RI SA TBEER SING H GODA RA, JU DI CIA L MEM BER AND SHR I L AXMI PR AS A D SAHU , AC COUNT ANT MEMBE R ITA No. 114/H/2020 Assessment Year: 2010-11 Anurag Gupta, Hyderabad. PAN – ACGPG 1952K Vs. Asst. Commissioner of Income-tax, Central Circle – 3(1), Hyderabad. (Appellant) (Respondent) Assessee by: Shri P. Murali Mohan Rao Revenue by: Shri Y.V.S.T. Sai Date of hearing: 26/10/2021 Date of pronouncement: 15/11/2021 O R D E R PER L.P. SAHU, A.M.: This appeal filed by the assessee is directed against CIT(A) - 6, Hyderabad’s order dated 02/12/2019 for AY 2010-11 involving proceedings u/s 143(3) of the Income Tax Act, 1961 ; in short “the Act on the following grounds of appeal: ITA No. 114/Hyd/2020 A n u r a g G u p t a , H y d . :- 2 -: 2. Briefly the facts of the case are that the assessee is an individual deriving income under the head salaries and income from other sources. During the FY 2009-10 relevant to the impugned AY 2010-11 i.e., on 11.03,2010, a search and seizure operation u/s.132 of the Act, was conducted in ITA No. 114/Hyd/2020 A n u r a g G u p t a , H y d . :- 3 -: the group cases of M/s MBS Jewellers Private Limited wherein the assessee is one of the main promoters. Thus, the search and seizure operation was also carried out in the residential premises of the assessee on 11.03.2010 wherein certain incriminating documents were found and seized by Department. In view of this, FY 2009-10, being the year in which search was conducted the AO issued notice u/s.142(1) of the Act, dated 11.10.2011 calling the assessee to file the return of income for the Impugned AY 2010-11. In response thereto, the assessee had filed the return of income on 07.12.2011 declaring total income of Rs.1,75,660/·. Accordingly, the AO completed the scrutiny assessment u/s. 143(3) of the Act, vide order dated 25.12:2011, assessing the total income of the assessee at Rs. 1,28,35,440/- by making an addition of Rs.4,80,080/- as undisclosed income of the assessee towards license fee received in respect of flat owned by the assessee at Mumbai and Rs. 1,21,19,700/- towards unexplained cash by observing as under: " A search and seizure operation u/s 132 the I.T. Act, 1961 was carried out in the case . MBS Jewellers Pvt Ltd., and its group of cases on 11.03.2010. A search was carried out at the residence of Shri Anurag Gupta. It being a search year, notice. u/s.142(1) was issued. to the assessee on 26/10/2010. In response to the notices issued, the assessee flied returned on 07/12/2011 for the AY 2010-11 declaring income of Rs. 1,75,660/ .... ITA No. 114/Hyd/2020 A n u r a g G u p t a , H y d . :- 4 -: 2, Notice u/s.143(2) and 142(1) of the Act, 1961 and questionnaire was issued to the assessee on 18/11/2011, calling for information. In response to the notices issued Sri P. Murali Mohan Rao, CA & AR of the assessee appeared and filed the information called for. 3, As seen from the Annexure A/MMSJI03, pages 44 to 68 of Leave Licence Agreement, page 55 indicates the receipt of non-refundable Licensee Fee. During the F. Y 2003-04, the assessee was in receipt pf Licensee fee of Rs. 4,80,000/-. However, as seen from the return of income filed and the information furnished, the assessee has not disclosed the same. As the assessee has failed to disclose the receipt of Rs.4,80,000/- is treated as undisc1os.ed income and is added to the income returned. 4. During the course of search proceedings conducted at the common residential premises of Sri Anurag Gupta, his father and brother an amount of Rs. 1,21,79,700/- was found in the bedroom of Sri Anurag Gupta and same could not be explained and authorized officer seized an amount of 1,18,00,000/- keeping in view/acts of the case and living standards of family. When put to the assessee, the assessee replied that he cannot produce any evidence in support of the availability of cash found of Rs. 1,21,79,700/-. 4.2 In view of the above facts the amount found in Anurag Gupta's bedroom remains unexplained, Accordingly, the same is added as unexplained cash of Sri Anurag Gupta for the F,Y. 2009-10 relevant to the A. Y 2010-11 of Rs. 1,21,79,700/·." 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A) and the CIT(A) deleted the addition of Rs. 4,80,000/- on account of license while ITA No. 114/Hyd/2020 A n u r a g G u p t a , H y d . :- 5 -: confirmed the addition of Rs. 1,21,79,700/- towards unexplained cash. 4. Aggrieved by the order of CIT(A), the assessee is in appeal before the ITAT. 5. As regards the ground Nos. 2 (a) to (e) regarding non issue of the notice u/s 143(2) of the Act for the impugned AY, the ld. AR of the assessee reiterated the submissions as made before the CIT(A) and submitted that the entire assessment proceedings were completed without issuing the notice uls 143(2) of the Act. As the same is a statutory notice for scrutinizing any return of income and non issue of notice u/s 143(2) of the Act vitiates the entire assessment proceedings. Referring to the provisions of section 292BB of the Act, he submitted that error of non- issue of notice u/s 143(2) is not curable under the said provisions. Referring to the copy of the order sheet, the ld. AR submitted that the extract of the order sheet recorded by the AO clearly shows that no notice u/s 143(2) of the Act was issued by the AO while completing the assessment u/s 143(3) of the Act. 6. The ld. DR, on the other hand, relied on the orders of revenue authorities. ITA No. 114/Hyd/2020 A n u r a g G u p t a , H y d . :- 6 -: 7. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. As per the assessment order notices u/s 143(2) and 142(1) along with questionnaire were issued to the assessee on 18 th November, 2011 calling for information. As per the order sheet filed by the ld. AR, which is placed on record, clearly shows that there is no issuance of the 143(2) notice. Even, if we go through the assessment order, assessee filed his return of income on 7 th December, 2011 in response to the notice u/s 142(1) dated 26/10/2010, whereas, notices u/s 143(2) & 142(1) were issued on 18 th November, 2011, the date of which is before filing of the return of income, how is it possible to issue a notices before filing of return of income. The assessee also filed his return of income u/s 139(1) of the Act on 30/08/2010 under the acknowledgment No. 4400001008/Ward – 4(4). Even if we correlate the notice u/s 143(2) with the assessment order, the issue of notice is time barred. This is a search year, in which, assessment has been framed u/s 143(3) of the Act, but, the assessment has not been framed u/s 153A. Therefore, even if notice issued u/s 143(2) is time barred or not issued at all or notice u/s 143(2) is invalid in the eye of law, the assessment framed u/s 143(3) will not survive. As held by the Hon’ble High Court of Madras in the case of B. Kubendran Vs. DCIT, [2021] 126 Taxmann.com 107 (Madras.), notice u/s 143(2) is not required to be issued in the cases where assessments ITA No. 114/Hyd/2020 A n u r a g G u p t a , H y d . :- 7 -: framed u/s 153A, but, in the present case, assessment has been framed u/s 143(3), therefore, as per the statute notice u/s 143(2) is mandatory to be issued by the jurisdictional AO, which is absent in this case. Therefore, non-issuance of a valid notice u/s 143(2) of the Act, the entire assessment framed by the AO is void-ab-initio. Accordingly, we set aside the order of the CIT(A) and quash the order passed by the AO. 8. As we have quashed the assessment order itself, no need to adjudicate the other grounds raised by the assessee on merits. 9. In the result, appeal of the assessee is allowed in above terms. Pronounced in the open court on 15 th November, 2021. Sd/- Sd/- (S.S. GODARA) (L. P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 15 th November, 2021. kv ITA No. 114/Hyd/2020 A n u r a g G u p t a , H y d . :- 8 -: Copy to : 1 Anurag Gupta, C/o P. Murali & Co., CAs, 6-3-655/2/3, 1 st Floor, Somajiguda, Hyderabad – 82 2 ACIT, Central Circle – 3(1), Hyderabad. 3 CIT(A) - 6, Hyderabad 4 Pr. CIT(Central), Hyderabad 5 ITAT, DR, Hyderabad. 6 Guard File.