Gundu Bharathi , Nalgonda V. Income Tax Officer, Ward-1, Nalgonda

ITA 1150/Hyd/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 6723 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 22-07-2019
• Assessment Year: 2003-2004
• Appeal Filed On: 04-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: Y V BHANU NARAYAN RAO
• Keywords: Assessment record
• Section: 142(1); 133A; 143(1); 147; 69; 148

Judgement Text

IN T HE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1150 /HYD/201 8 ASSESSMENT YEAR: 20 03 - 04 GUNDA BHARATHI, NALGONDA. PAN A BTPG 8320 R VS. INCOME - TAX OFFICER, WARD 1 , HYDERABAD. ( APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI Y.V. BHANU NARAYAN RAO REVENUE BY : S HRI M.H. NAIK DATE OF HEARING : 2 2 / 0 7 /201 9 DATE OF PRONOUNCEMENT : 31 / 0 7 / 201 9 O R D E R PER S . RIFAUR RAHMAN , A .M. : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A) 1 0 , HYDERABAD , DATED 19/02/2018 FOR AY 2 003 - 04. 2. BRIEF FACTS OF THE CASE ARE, ASSESSEE FILED HER RETURN OF INCOME FOR AY 2003 - 04 ON 01/12/2003 ADMITTING TOTAL INCOME OF RS. 1,20,000/ - AND INCOME FROM AGRICULTURE OF RS. 40,000/ - . THE RETURN WAS PROCESSED U/S 143(1) O F THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT). BASED ON THE INFORMATION FOUND DURING THE COURSE OF SURVEY U/S 133A IN THE CASE OF M/S MANASA ESTATES, HYDERABAD, NOTICE U/S 148 WAS ISSUED ON 02/03/2009 BY THE ITO, WARD 6(4), HYDERABAD AND SERVED BY AFFI XTURE ON 12/03/2009. ANOTHER NOTICE U/S 142(1) WAS ISSUED ON 14/10/2009 AND AGAIN SERVED BY AFFIXTURE ON 16/10/2009. IN RESPONSE, VIDE HER LETTER DATED 11/11/2009 REQUESTED TO TRANSFER THE CASE TO ITO, NALGONDA SINCE ASSESSEE FILED HER RETURN OF INCOME FOR THE CURRENT AY WITH ITO, NALGONDA. ACCORDINGLY, THE CASE WAS TRANSFERRED TO ITO, NALGONDA AND CASE WAS TAKEN UP FOR SCRUTINY. 2 ITA NO. 1150 /HYD/1 8 GUNDA BHARATHI, NALGONDA . FURTHER NOTICES U/S 142(1) AND 143(2) WERE ISSUED AND SERVED ON THE ASSESSEE. IN RESPONSE, ASSESSEE AND HER AR APPEARED AND FURNI SHED THE INFORMATION. AFTER VERIFICATION OF THE ABOVE INFORMATION SUBMITTED BY THE ASSESSEE, ASSESSMENT WAS COMPLETED BY MAKING ADDITION U/S 69 OF THE ACT TO THE EXTENT OF RS. 9,45,000/ - . THE ABOVE ADDITION WAS MADE BY THE AO IN REFERENCE TO THE INFORMATIO N FOUND DURING SURVEY IN THE CASE OF M/S MANASA ESTATES, AS PE R WHICH, ASSESSEE HAS PURCHASED FOUR PLOTS AGAINST WHICH ASSESSEE HAS PAID RS. 2,80 ,000/ - BY CHEQUE AND BALANCE ALLEGED TO HAVE BEEN PAID BY CASH TO THE EXTENT OF RS. 9,45,000/ - . 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), ASSESSEE HAS RAISED JURISDICTIONAL ISSUE OF REOPENING OF THE ASSESSMENT U/S 147 AND SERVICE OF NOTICES U/S 148. APART FROM CONTESTING ON MERITS, IT WAS SUBMITTED THAT ASSESSEE HAS ALREADY DECLARED THE ABOVE PAYMENT IN HER ORIGINAL RETURN OF INCOME FILED FOR THIS AY. 4. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT(A) CALLED FOR A REMAND REPORT ON JURISDICTIONAL ISSUE OF REOPENING U/S 147 VIS - - VIS 148. AFTER CONSIDERING THE REMAND REPORT AND OBJECTIONS OF THE ASSESSEE, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: 8.2 THE ASSESSMENT ORDER CLEARLY REFERS TO THE EVID ENCES FOUND AND THE FACT OF RECORDING A STATEMENT OF THE APPELLANT. ON PERUSAL OF THE ASSESSMENT RECORD, IT IS SEEN THAT STATEMENT OF THE APPELLANT WAS RECORDED ON 24.12.2009. IN THE STATEMENT, THE APPELLANT CONFIRMED THE FACT OF PURCHASE OF SAID PROPERTIE S. THE APPELLANT WAS SHOWN COPY OF STATEMENT REFLECTING THE DETAILS OF PAYMENTS, BOTH, IN CASH AND THROUGH CHEQUE. HOWEVER, THE APPELLANT DENIED MAKING ANY PAYMENT IN CASH. BASED ON THE EVIDENCES, DISCOVERED IN THE COURSE OF SURVEY OPERATION, THE AO PROCEE DED TO ADD THE AMOUNT OF CASH PAYMENT OF RS.9,45,000 / - . THE APPELLANT HAS NOT SOUGHT CROSS EXAMINATION OF THE PERSON CONCERNED BEFORE THE AO. THEREFORE, THE APPELLANT CANNOT NOW SAY THAT CROSS EXAMINATION OPPORTUNITY WAS NOT PROVIDED BY THE AO. THE NECESSA RY DETAILS AND STATEMENT WERE SHOWN TO THE APPELLANT WHEN STATEMENT OF THE APPELLANT WAS RECORDED. THE 3 ITA NO. 1150 /HYD/1 8 GUNDA BHARATHI, NALGONDA . DECISION CITED BY THE APPELLANT IS NOT RELEVANT AS THE FACTS IN THE PRESENT CASE ARE DIFFERENT. IN OTHER WORDS, ALL THE ARGUMENTS OF THE APPELLANT ARE N OT BASED ON ANY MERITS. 5. AGGRIEVED WITH THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS ) - 10, HYDERABAD IS ERRONEOUS AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS} - 10, HYDERABAD ERRED IN UPHOLDING THE ACTION OF THE LEARNED AO IN REOPENING THE ASSESSMENT BY WRONGLY INVOKI NG THE PROVISIONS OF SEC. 147/148. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS} - 10, HYDERABAD IS NOT VALID AND BAD IN LAW AS THE ASSESSMENT WAS MADE BY THE LEARNED ASSESSING OFFICE R U/S. 143 LW.S. 147 ON THE STRENGTH OF AN INV A LID NOTICE U /S. 148 WHICH WAS ISSUED WITHOUT PROPER JURISDICTION. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS ) - 10, HYDERABAD IS BAD IN LA W AS THE NOTICE U/S.148 DID NOT SPECIFICALLY MENTION THE REASONS FOR REOPENING THE APPELLANT'S CASE BY INVOKING PROVISIONS OF SEC. 147. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE NOTICE ISSUED U/S. 142(1) IS BARRED BY LIMITATION OF TIME. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS} - 10, HYDERABAD ERRED IN UPHOLDING THE ADDITION OF RS. 9,45,000/ - MADE BY THE LEARNED AO TOWARDS UNEXPLAINED U /S. 69 OF THE IT ACT, 1961 WHICH WAS MADE BY HIM BASED ON CERTAIN UNCONFIRMED INFORMATION AND UNVERIFIABLE ALLEGATIONS TO THE INCOME ALREADY ADMITTED IN THE RETURN FILED FOR ASSESSMENT YEAR 2003 - 2004. 7. LEAVE' THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APP EAL AND / OR TO ADD ANY FRESH GROUND(S) OF APPEAL AT OR BEFORE THE HEARING OF THE APPEAL . 6. BEFORE US, LD. AR OF THE ASSESSEE SUBMITTED THAT AO HAS NO JURISDICTION TO INITIATE PROCEEDINGS U/S 147 SINCE ITO, NALGONDA HAS 4 ITA NO. 1150 /HYD/1 8 GUNDA BHARATHI, NALGONDA . NOT ISSUED ANY NOTICE U/S 148 AN D HE BROUGHT TO OUR NOTICE THE REMAND REPORT, WHICH IS PLACED ON RECORD AT PAGES 51 & 52 OF THE PAPER BOOK, AS PER WHICH, AO HAS CLEARLY BROUGHT ON RECORD THAT NOTICE U/S 148 WAS ISSUED BY ITO, WARD 6(4), DO NOT HAVE JURISDICTION OVER THE ASSESSEE AND FU RTHER STATED THAT THIS WAS NOT SERVED ON THE ASSESSEE, BUT, IT WAS AFFIXED AT THE ADDRESS, WHICH IS NOT PERMANENT ADDRESS OF THE ASSESSEE, WHERE THE ASSESSEE HABITUALLY LIVES. UPON REQUEST FROM THE ASSESSEE, THE CASE WAS TRANSFERRED TO ITO, NALGONDA AND I TO, NALGONDA HAS FAILED TO ISSUE NOTICE U/S 148. THEREFORE, HE SUBMITTED THAT PRESENT ITO HAS NO JURISDICTION TO COMPLETE THE PROCEEDINGS U/S 147. 7. ON THE OTHER HAND, LD. DR BROUGHT TO OUR NOTICE THAT ASSESSEE HIMSELF HAS NOT PRESSED THE GROUND OF NOT SERVING OF NOTICE BEFORE THE CIT(A), WHICH THE CIT(A) HAS RECORDED IN PARA 6.1 OF HIS ORDER. HOWEVER, HE SUBMITTED THAT ORIGINAL NOTICE U/S 148 WAS ISSUED BY ITO, WARD 6(4), HYDERABAD AND NOTICES WERE BROUGHT TO THE NOTICE OF THE ASSESSEE AND THE ASSESSE E HAS INFORMATION ABOUT THE NOTICE AND BASED ON THE ASSESSEES REQUEST ONLY, THE CASE WAS TRANSFERRED TO ITO, NALGONDA. FURTHER, HE SUBMITTED THAT, IF REQUIRED, THE MATTER CAN GO BACK TO THE AO FOR PROPER ACTION AND HE SUBMITTED THAT THE CONDUCT OF THE ASS ESSEE IS IMPORTANT AND INFORMATION WAS VERY MUCH AVAILABLE WITH THE ASSESSEE FOR REOPENING OF THE ASSESSMENT AND IT IS NOT NECESSARY TO ISSUE ANOTHER NOTICE TO THE ASSESSEE. 8. IN THE REJOINDER, LD. AR SUBMITTED THAT ISSUE RECORDED IN PARA 6.1 OF CIT(A)S ORDER, IN WHICH ASSESSEE HAS NOT PRESSED GROUND NO. 3, SERVING OF NOTICE WAS CONTESTED AND ASSESSEE HAS ALWAYS PRESSED THE GROUND OF JURISDICTIONAL ISSUE I.E. GROUND NO. 4. 9. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD. WE NOTICE THAT ASSESSEE HAS FILED HER RETURN OF INCOME ON 01/12/2003 WITH THE JURISDICTIONAL OFFICER I.E., ITO, NALGONDA AND THE RETURN WAS 5 ITA NO. 1150 /HYD/1 8 GUNDA BHARATHI, NALGONDA . PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, CERTAIN INF ORMATION WAS FOUND DURING THE SURVEY U/S 133A OF THE ACT IN THE CASE OF M/S MANASA ESTATES, HYDERABAD. THE CASE WAS SELECTED FOR REOPENING U/S 147 BY THE ITO, WARD 6(4) BASED ON THE INFORMATION OF DIT, WHICH IS AFTER 4 YEARS, BUT, WITHIN THE PERIOD OF 6 YEA RS FROM THE END OF THE RELEVANT AY. SINCE THE NOTICE WAS ISSUED BY A NON - JURISDICTIONAL AO AND THIS WAS BROUGHT TO THE NOTICE OF NON - JURISDICTIONAL AO AND ACCORDINGLY, THE CASE WAS TRANSFERRED TO JURISDICTIONAL ITO I.E., ITO, NALGONDA ON 12/11/2009. ON 17/ 11/2009, ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE FOR INVESTMENT OF RS. 12,25,000/ - FOR PURCHASE OF PLOTS BY ISSUING NOTICES U/S 143 (2) AND 142(1) OF THE ACT, SINCE THE ASSESSEE FALLS UNDER 149(1)(B). TO INITIATE PROCEEDINGS U/S 147, AO SHOULD HAVE ISSUED NOTICE U/S 148 TO GET JURISDICTION AS HELD IN VARIOUS CASES BY THE HONBLE HIGH COURTS AND SUPREME COURT. TO INITIATE PROCEEDINGS, T HE AO SHOULD HAVE A JURISDICTION TO COMPLETE THE ASSESSMENT. IN THIS CASE, PRESENT AO, WHO HAS COMPLETED THE ASSESSMENT U/S 147 WITHOUT ISSUING NOTICE U/S 148. HOWEVER, NOTICE U/S 148 WAS ISSUED BY AO, WHO DO NOT HAVE JURISDICTION OVER THE ASSESSEE. IN THE REMAND REPORT, AO CONFIRMED THAT HE HAS NOT ISSUED NOTICE U/S 148, BUT, BROUGHT TO THE NOTICE OF CIT(A) THAT NOTICE U/S 148 CANNOT BE ISSUED TWICE AND HE SUBMITTED THAT HE HAS ISSUED NOTICE U/S 143(2) ON 17/11/2009, WHICH WITHIN TIME LIMIT FOR HIM TO ISSU E NOTICE U/S 148, IN ORDER TO INITIATE PROCEEDINGS U/S 147 RWS 149(1)(B). THE AO IN THE REMAND REPORT SUBMITTED THAT ASSESSEE HAS NOT OBJECTED TO ANY OF THE OTHER NOTICES ISSUED BY HIM. FURTHER, HE SUBMITTED THAT ASSESSEE HAS BROUGHT TO THE NOTICE OF THE A O ONE WEEK PRIOR TO THE COMMENCEMENT OF THE ASSESSMENT THAT ASSESSEE WAS NOT SERVED NOTICE U/S 148, WHICH IS NOT PROPER ACCORDING TO HIM. 9.1 WE NOTICE THAT CIT(A) CONSIDERED THE REMAND REPORT AND REJECTED PLEA OF THE ASSESSEE FOR THE REASON THAT ASSESSE E HAS COOPERATED AND PARTICIPATED IN THE PROCEEDINGS AND ASSESSEE CANNOT OBJECT CONSIDERING THE PROVISIONS OF SECTION 292BB. THEREFORE, 6 ITA NO. 1150 /HYD/1 8 GUNDA BHARATHI, NALGONDA . ACCORDING TO HIM, NOTICE U/S 148 SHALL BE TREATED AS DEEMED TO HAVE SERVED AND IT IS DEEMED TO BE VALID NOTICE. IN OUR CONSIDERED VIEW, CIT(A) APPLIED THE PROVISIONS OF SECTION 292BB WHEREAS THE ASSESSEE HAS ALREADY OBJECTED THE ISSUE OF NON - SERVING OF NOTICE BEFORE THE AO, BUT THE AO HAS NOT CONSIDERED THE ABOVE OBJECTION AND PASSED ASSESSMENT ORDER. THEREFORE, SECTION 29 2BB WILL HAVE NO APPLICATION TO THE CASE OF THE ASSESSEE AND THE ASSESSMENT WAS COMPLETED ON 29/12/2009 WITHOUT PROPER JURISDICTION BY THE PRESENT AO. THE PROCEEDINGS MADE BY THE OTHER NON - JURISDICTIONAL AO HAS NO RELEVANCE FOR THE PRESENT ASSESSMENT. THE AO I.E. ITO, NALGONDA, HA D TIME TO ISSUE NOTICE U/S 148 EVEN BEFORE COMPLETING THE ASSESSMENT, WHICH IS WITHIN 6 YEARS TO REOPEN THE ASSESSMENT BEFORE COMPLETION OF THE RELEVANT AY. IN OUR VIEW, AO HAS NO JURISDICTION TO COMPLETE THE ASSESSMENT U/S 147 OF THE ACT AND ACCORDINGLY, THE ASSESSMENT MADE U/S 147 IS HEREBY QUASHED, ALLOWING THE GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 31 ST JULY , 201 9 . SD / - SD/ - ( P. MA DHAVI DEVI ) (S . RIFAUR RAHMAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 31 ST JULY , 201 9 KV C OPY TO: - 1) SMT. GUNDA BHARATHI, C/O Y.V. BHANU NARAYAN RAO, C.A., 2 ND FLOOR, 10 - 2 - 195, VAG GANESH COMPLEX, OPP. DECCAN CLUB, EAST MARREDPALLY, SECUNDERABAD 500 026. 2) ITO, WARD 1 , NALGONDA 3) CIT(A) 1 0 HYDERABAD. 4) PR. CIT - 3 , HYD. 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6 ) GUARD FILE