Ravellla Rama Krishna, Hyderabad V. ACIT,Central Circle-5, Hyderabad

ITA 1167/HYD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6099 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 12-01-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 10-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Search and seizure; Question of law; Condonation of delay
• Section: 143(3); 153A; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.1166, 1167, 1168 & 1169/HYD/2014 ASSESSMENT YEARS 2006-07, 2007-08, 2008-09 & 2009- 2010 MR. RAVELLA RAMAKRISHNA, HYDERABAD. PAN ADWPR8821K VS. ACIT, C ENTRAL C IRCLE - 5 HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. A. SRINIVAS FOR REVENUE : MR. M. SITARAM DATE OF HEARING : 12.01.2016 DATE OF PRONOUNCEMENT : 20 . 01.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. ALL ARE ASSESSEES APPEALS FOR THE A.YS. 2006- 2007 TO 2009-2010. 2. AT THE OUTSET, IT IS NOTICED THAT THE REGISTRY HAS RAISED AN OBJECTION ABOUT A DEFECT THAT THE ASS ESSEE HAS NOT PAID THE COURT FEE AS PRESCRIBED UNDER I.T. RULES AND THAT THE SHORT PAYMENT IS OF RS.9500. 2.1. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEES APPEALS WERE DISMISSED BY THE LD. CIT (A) IN LIMINI ON THE GROUND THAT ASSESSEE HAS NOT PAID THE ADMITTED TAX AND SINCE THE APPEAL WAS DISMISSED IN LIMINI, THE APPEAL FEE PAYABLE BY THE ASSESSEE IS O NLY 2 ITA.NOS.1166, 1167, 1168 & 1169/HYD/2014 MR. RAVELLA RAMAKRISHNA, HYDERABAD. RS.500. IN SUPPORT OF THIS CONTENTION, HE HAS FILED COPY OF THE ORDER OF COORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF MR. A. HARINATH REDDY VS. DCIT, CC-6, HYDERABAD IN ITA.NO.1079/HYD/2010 DATED 11.02.2011. THE RELEVANT PARAGRAPH OF THE TRIBUNAL IS REPRODUCED HEREUNDER F OR READY REFERENCE. 2. AT THE OUTSET, WE MAY NOTE THAT THE REGISTRY HAS ISSUED A DEFECT MEMO TO THE ASSESSEE POINTING OUT THAT THE TRIBUNAL FEE OF RS.10,000 OUGHT TO HAVE BEEN DEPOSITED BY THE ASSESSEE INSTEAD OF RS.500 PAID BY IT, AND AS SUCH THERE WAS SHORT-PAYMENT OF APPEAL FEE. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE RELATING TO SHORT PAYMENT OF TRIBUNAL FEE IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF RAJKAMAL POLYMERS (P) LTD V/S. CIT (2007)291 ITR 314(KAR.) AND WITH THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF DR.A.NARESH BABU V/S. ITO (2010) 124 ITD 28. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS ON THIS ISSUE, WE FIND THAT THE ISSUE OF TRIBUNAL FEE PAYABLE IN CASE WHERE THE CIT(A) DISMISSED THE APPEAL IN LIMINE ON THE GROUND OF NON-PAYMENT OF ADMITTED TAX IN TERMS OF S.249(4)(A) OF THE ACT IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISIONS OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF RAJKAMAL POLYMERS (P) LTD (SUPRA) AND OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF DR. NARESH BABU (SUPRA), WHEREIN IT WAS HELD THAT IN TERMS OF S.253(6)(D), THE TRIBUNAL FEE OF RS.500 ONLY IS PAYABLE BY THE ASSESSEE WHERE THE APPEAL IS PREFERRED AGAINST THE ORDER OF THE CIT(A) DISMISSING THE APPEAL OF THE ASSESSEE IN LIMINE. WE ACCORDINGLY FIND NO MERIT IN THE DEFECT POINTED OUT BY THE REGISTRY, 3 ITA.NOS.1166, 1167, 1168 & 1169/HYD/2014 MR. RAVELLA RAMAKRISHNA, HYDERABAD. AND THEREFORE, PROCEED TO DISPOSE OFF THIS APPEAL ON MERITS. 2.2. RESPECTFULLY FOLLOWING THE SAME INTO CONSIDERATION, WE HOLD THAT THE OBJECTION OF THE RE GISTRY IS NOT MAINTAINABLE. 2.3. COMING TO THE APPEALS FILED BY THE ASSESSEE, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT FOR THE A.Y. 2007-08, ASSESSEE HAD RETURNED A SUM OF RS.20,17,24 0 AND THE INCOME ASSESSED WAS ALSO RS.20,17,240 AS IS EVIDENT FROM THE ASSESSMENT ORDER PASSED UNDER SECT ION 143(3) READ WITH SECTION 153A OF THE I.T. ACT. HE H AS SUBMITTED THAT IN VIEW OF THE ABOVE, ASSESSEE HAD N O GRIEVANCE AGAINST THE ASSESSMENT ORDER AND THE APPE AL FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) AS WELL AS BEFORE THIS TRIBUNAL ARE INFRUCTUOUS. 3. TAKING THE ABOVE FACTS INTO CONSIDERATION, THE ASSESSEES APPEAL FOR THE A.Y. 2007-08 I.E., ITA.NO.1167/HYD/2014 IS DISMISSED AS INFRUCTUOUS. 4. AS REGARDS THE APPEALS FOR THE A.YS. 2006-07, 2008-09 AND 2009-10 ARE CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH AND SEIZURE OPERATION IN THE CASE OF ONE MR. M. SAMBASI VA RAO AND OTHERS INCLUDING THE ASSESSEE HEREIN ON 16.07.2008 AND CERTAIN INCRIMINATING MATERIAL AND C ASH WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH. THE ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) REA D WITH SECTION 153A OF THE I.T. ACT AND UNACCOUNTED 4 ITA.NOS.1166, 1167, 1168 & 1169/HYD/2014 MR. RAVELLA RAMAKRISHNA, HYDERABAD. INVESTMENTS WERE BROUGHT TO TAX. AGGRIEVED BY THE S AME, ASSESSEE PREFERRED APPEALS BEFORE THE LD. CIT(A) FO R THE RESPECTIVE A.YS AND IT ALSO REQUESTED THE A.O. TO A DJUST THE CASH SEIZED FROM HIS PREMISES TOWARDS THE SELF- ASSESSMENT TAX. HE HAS SUBMITTED THAT THIS FACT WAS ALSO BROUGHT TO THE NOTICE OF THE LD. CIT(A). HOWEVER, L D. CIT(A) HAS DISMISSED ASSESSEES APPEALS BY HOLDING THAT THE ASSESSEE HAS FAILED TO PAY THE ADMITTED TAX AND THEREFORE, THE APPEALS ARE NOT MAINTAINABLE. 4.1. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED BEFORE US, COPIES OF PANCHANAMA AND THE BANK LETTER S FOR RECOVERY OF INCOME TAX DUES TO DEMONSTRATE THAT THE DEPARTMENT HAS ALREADY SEIZED AND RECOVERED A TOTAL SUM OF RS.21,93,700 WHEREAS THE TOTAL ADMITTED TAX INCL UDING THE INTEREST FOR THE ABOVE THREE YEARS WAS RS.21,61 ,594. HE HAS SUBMITTED THAT THE A.O. MAY BE DIRECTED TO A DJUST THE TAX PAID AND SEIZED AND RECOVERED FROM THE ASSE SSEE TOWARDS THE NET TAX AND THE INTEREST PAYABLE THEREO N AND ALSO DIRECT THE CIT(A) TO ADJUDICATE THE APPEALS ON MERITS. 5. LD. D.R. SUBMITTED THAT THESE FACTS NEED VERIFICATION BY THE A.O. 6. LD. COUNSEL FOR THE ASSESSEE HAS ALSO PLACED RELIANCE UPON THE DECISION OF B BENCH OF THIS TRI BUNAL TO WHICH ONE OF US IS A SIGNATORY IN THE CASE OF AKR CONSTRUCTIONS LTD., HYDERABAD VS. DCIT, CC-1(1), HYDERABAD IN ITA.NO.572/HYD/2015 DATED 30.07.2015 WHEREIN ASSESSEE WAS DIRECTED TO PAY TAX AND FURNIS H 5 ITA.NOS.1166, 1167, 1168 & 1169/HYD/2014 MR. RAVELLA RAMAKRISHNA, HYDERABAD. CHALLANS IN SUPPORT OF THE SAME AND THE ASSESSEES APPEAL MAY BE CONSIDERED ON MERITS AND SINCE THE APPEAL WI LL BE DEEMED TO HAVE BEEN FILED ON THE DATE ADMITTED TAX HAS BEEN PAID, THE ASSESSEE SHOULD BE DIRECTED TO MAKE NECESSARY CONDONATION PETITION AND THE LD. CIT(A) S HOULD CONSIDER IT ON MERITS. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. PRAMODKUMAR DANG ITA.NO.62 OF 2011 DATED JANUARY, 2014 HAS CONSIDERE D SIMILAR ISSUE AND ALSO THE PROVISIONS OF SECTION 24 9(4)(A) OF THE I.T. ACT AND HELD AT PARAS 20 TO 22 AS UNDER : 20. THE FACTS OF THE CASE AT HAND ARE AT A MUCH BETTER FOOTING. ADMITTEDLY, THE TAX DUE ON THE RETURNED INCOME WAS RS.1,73,080/-. THE ASSESSEE HAD PAID RS.50,000/- BY WAY OF ADVANCE TAX AND RS.4,60,000/ - WAS SEIZED DURING THE SEARCH AND SEIZURE OPERATIONS AND THUS A SUM OF RS.5,10,000/- WAS AVAILABLE WITH THE DEPARTMENT. THE ASSESSEE HAD EVEN MOVED AN APPLICATION UNDER SECTION 154 REQUESTING THE ASSESSING OFFICER TO ADJUST THE AMOUNT OF TAX PAYABLE ON THE RETURNED INCOME FROM THE AMOUNT THAT HAD BEEN SEIZED FROM THE ASSESSEE. NO ORDER IN THIS REGARD WAS PASSED REJECTING THE SAID REQU EST OF THE ASSESSEE. THE TRIBUNAL HAS EVEN NOTICED THAT THERE WAS AN ATTACHMENT ORDER VIS--VIS THE BANK ACCOUNTS OF THE A SSESSEE AND AS SUCH, THE A SSESSEE HAD NO CASH AVAILABLE FOR PAYMENT OF THE TAX AS COMPUTED ON THE RETURNED INCOME. THE TRIBUNAL HAS HELD THAT THE ACTION OF THE ASSESSEE OF REQUESTING FOR ADJUSTMENT OF THE AMOUNT WAS BOND FIDE. NO REASON OR GROUND FOR NOT ACCEPTING THE SAID REQUEST IS STATED OR MENTIONED IN THE 6 ITA.NOS.1166, 1167, 1168 & 1169/HYD/2014 MR. RAVELLA RAMAKRISHNA, HYDERABAD. GROUNDS OF APPEAL. SECTION 132B OF THE ACT RELATES TO APPLICATION OF SEIZED ASSETS TOWARDS TAX LIABILITY. IT IS NOT STATED WHY AND ON WHAT GROUND THE APPLICATION OR ADJUSTMENT WAS NOT MADE. IT IS NOT THE CASE OF THE REVENUE THAT THAT THE CASH SEIZED WAS ADJUSTED FOR ANOTHER YEAR OR WAS CLAIMED AND ASSESSED IN THE HANDS OF A THIRD PERSON. 21. THE RATIONALE BEHIND SECTION 249(4) APPEARS TO BE THAT WHERE AN ASSESSEE HAS FILED A RETURN OF INCOME, THEN THE TAX WHICH IS ADMITTEDLY PAYABLE BY THE ASSESSEE SHOULD BE PAID PRIOR TO THE HEARING OF ANY APPEAL FILED BY THE ASSESSEE. THE RATIONALE SEEMS VERY LOGICAL FOR THE REASON THAT NO ASSESSEE CAN BE HEARD IN AN APPEAL WHERE THE TAX WHICH IS ADMITTEDLY PAYABLE BY THE ASSESSEE IS OUTSTANDING. IT IS TO ENFORCE PAYMENT OF TAX ON ADMITTED INCOME . WHERE AN ASSESSEE FILES THE RETURN OF INCOME THEN AT LEAST THE TAX WHICH IS PAYABLE IN TERMS OF THE RETURN INCOME SHOULD BE PAID BY THE ASSESSEE. BUT WHERE THE ASSESSEE EITHER HAS PAID THE TAX ON THE RETURNED INCOME OR SOUGHT ADJUSTMENT OF THE AMOUNT ADMITTEDLY LYING WITH THE REVENUE TOWARDS THE TAX PAYABLE ON THE RETURNED INCOME, THE ASSESSEE CANNOT BE DENIED A HEARING. IN THE PRESENT CASE, THE AMOUNT OF RS.4,60,000/- BELONGING TO THE ASSESSEE WHICH WAS ADMITTEDLY AVAILABLE WITH THE APPELLANT WAS FAR IN EXCESS OF THE AMOUNT OF TAX PAYABLE IN TERMS OF THE RETURN ED INCOME AND WAS EVEN IN EXCESS OF THE DEMAND CREATED UNDER SECTION 143(1)(A) . THE ASSESSEE COULD NOT HAVE BEEN DENIED A HEARING MERELY ON THE GROUND OF NONPAYMENT OF TAX DUE ON THE RETURNED INCOME. 22. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE TRIBUNAL WAS CORRECT IN HOLDING THAT THE REQUIREMENTS OF SECTION 249 ( 4)(A) OF THE ACT WERE DULY COMPLIED WITH. THE QUESTION OF LAW IS THUS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE APPEAL IS 7 ITA.NOS.1166, 1167, 1168 & 1169/HYD/2014 MR. RAVELLA RAMAKRISHNA, HYDERABAD. ACCORDINGLY DISMISSED WITH NO ORDER AS TO COSTS. 8. WE FIND THAT THE ASSESSEES CASE IS SIMILAR ON FACTS. THEREFORE, WE DEEM IT FIT AND PROPER TO REMI T THE ISSUE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTIO N TO VERIFY THE FACTS MENTIONED BY ASSESSEE HEREIN AND IF IT IS FOUND THAT THE CASH SEIZED DURING THE COURSE OF SEARCH AN D ALSO RECOVERED THEREAFTER, IS SUFFICIENT TO MEET THE TAX LIABILITY FOR THE ABOVE THREE YEARS, THE LD. CIT(A) SHALL ENT ERTAIN THE APPEALS AND THE ASSESSEE SHALL FILE APPLICATION FOR CONDONATION OF DELAY WHICH SHALL BE CONSIDERED BY T HE LD. CIT(A) ON MERITS. 9. IN THE RESULT, APPEALS OF THE ASSESSEE FOR THE A.YS. 2006-07, 2008-09 AND 2009-10 I.E., ITA.NOS. 1166/HYD/2014, 1168/HYD/2014 & 1169/HYD/2014 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES AND 1167/HYD/2014 FOR THE A.Y. 2007-08 IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 20.01.2016 SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 20 TH JANUARY, 2016 VBP/- 8 ITA.NOS.1166, 1167, 1168 & 1169/HYD/2014 MR. RAVELLA RAMAKRISHNA, HYDERABAD. COPY TO 1. MR. RAVELLA RAMAKRISHNA, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2. ACIT, C ENTRAL C IRCLE - 5, HYDERABAD. 3. CIT(A) - I , HYDERABAD. 4. CIT (CENTRAL), HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD 6. GUARD FILE