Bodiga Prabhakar Goud, Hyderabad V. Dy. CIT, Central Circle-7, Hyderabad

ITA 1199/HYD/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2997 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 11-02-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 18-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Search and seizure; Question of law
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. ASST YEAR APPELLANT RESPONDENT 1199/HYD/2014 1200/HYD/2014 1201/HYD/2014 1202/HYD/2014 1203/HYD/2014 1204/HYD/2014 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 SHRI B. PRABHAKAR GOUD, PARVATHAPUR, UPPAL, RR DISTRICT. (PAN AJDPB 6006 F) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD 1205 /HYD/201 4 1206/HYD/2014 2007 - 08 2008-09 SHRI RAGHUVEER SINGH MEDIPALLY (VILLAGE), GHATKESAR MANDAL, RR DISTRICT (PAN ATYPS 2913 F) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD 1207/HYD/2014 2003-04 SMT. B.MADHAVI, PARVATHAPUR, UPPAL, RR DISTRICT. (PAN ASJPB 6304 M) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD 1208/HYD/2014 2005-06 SMT. B.RAJYALAKSHMI, PARVATHAPUR, UPPAL, RR DISTRICT. (PAN ASJPB 6343 F) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD A PPELLANTS BY : SHRI K.C.DEVDAS RESPONDENT BY : SHRI M.SITARAM DR DATE OF HEARING 11.2.2016 DATE OF PRONOUNCEMENT 1 1 .2.2016 O R D E R PER BENCH : THESE APPEALS ARE FILED BY THE ASSESSEES, RELATED TO EACH OTHER, AND THEY ARISE OUT OF THE ORDERS PASSED BY T HE ASSESSING OFFICER UNDER S.143(3) READ WITH S.153C OF THE INCOME TAX ACT, 1961, FOR VARIOUS ASSESSMENT YEARS FROM 2003-04 TO 2009-10. ITA NO.1199/HYD/2014 & NINE OTHERS SHRI B.PRABHAKAR GOUD & OTHERS , RR DISTRICT 2 2. IN THESE APPEALS FILED BY THE ASSESSEES, THE FO LLOWING ADDITIONAL GROUND, AS TAKEN FROM THE APPEAL OF SHRI B.PRABHAKAR GOUD FOR ASSESSMENT YEAR 2004-05(ITA NO.1199/HYD/2014), WAS RAISED BY THE ASSESSEES THE LEARNED CIT(A) FAILED TO NOTE THAT THE SATISFA CTION AS ENJOINED IN SECTION 153C OF THE IT ACT, 1961 THAT T HE APPELLANT HAD UNDISCLOSED INCOME NOT HAVING BEEN RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT FILE OF B.RAMDA S GOUD WHO WAS SUBJECT TO PROCEEDINGS U/S. 132 OF THE ITA ACT, 1961 AND THEREFORE THE ORDER PASSED U/S. 143(3) R.W.S. 153C OF THE IT ACT, 1961 IN THE CASE OF THE APPELLANT FOR THE ASSE SSMENT YEAR 2004-05 IS WITHOUT JURISDICTION AND THEREFORE WHOLLY UNSUSTAINABLE IN LAW AND FACTS. ADDITIONAL GROUND RAISED IN OTHER APPEALS IS IDENTI CAL EXCEPT FOR THE ASSESSMENT YEAR NOTED IN THE ABOVE GROUND. 3. LEARNED COUNSEL SUBMITTED THAT FACTS NECESSARY FOR CONSIDERATION OF THE ADDITIONAL GROUND ARE ALREADY ON RECORD, AND BEING A PURE QUESTION OF LAW INVOLVED IN THE ADDITIONAL G ROUND, SUPPORTED BY THE JUDGMENT OF THE APEX COURT AS WELL AS THE CIRCU LAR ISSUED BY THE CBDT, THE SAME DESERVES TO BE ADMITTED. HAVING REG ARD TO THE CIRCUMSTANCES OF THE CASE, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEES IN THESE APPEALS. 4. FACTS CONCERNING THE ISSUE ARE STATED IN BRIEF . SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED IN THE CASES OF S HRI B.RAMDAS GOUD AND SHRI DESAGONI RAGHUPATHI GOUD GROUP ON 15.9.200 8. THE ASSESSEES HEREIN ARE SON, ASSOCIATE, DAUGHTER AND D AUGHTER IN LAW OF SHRI RAMDAS GOUD. CERTAIN INCRIMINATING MATERIAL/DO CUMENTS PERTAIN- ING TO THE ASSESSEES APPEAR TO HAVE BEEN FOUND DURI NG THE COURSE OF SEARCH, AND HENCE, THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER S.153C OF THE ACT AND ULTIMATELY COMPLETED THE ASSE SSMENTS IN THE ITA NO.1199/HYD/2014 & NINE OTHERS SHRI B.PRABHAKAR GOUD & OTHERS , RR DISTRICT 3 CASE OF THESE ASSESSEES FOR THE RELEVANT YEARS UNDE R APPEAL, BY MAKING CERTAIN ADDITIONS/DISALLOWANCES. 5. AGGRIEVED BY THE ASSESSMENTS MADE AS ABOVE, AS SESSEES PREFERRED APPEALS BEFORE THE CIT(A), AND FURTHER AG GRIEVED BY THE ADDITIONS SUSTAINED BY THE CIT(A), ASSESSEES PREFER RED THE PRESENT APPEALS BEFORE THE TRIBUNAL. 6. BY WAY OF ADDITIONAL GROUND NOTED ABOVE, THE AS SESSEES CONTEND THAT IN ORDER TO ASSUME JURISDICTION UNDER S.153C OF THE ACT, IT IS MANDATORY ON THE PART OF THE ASSESSING OFFICE R, IN THE ASSESSMENT FILE OF SHRI B.RAMDAS GOUD, WHICH WAS SUBJECT TO PR OCEEDINGS UNDER S.132 OF THE ACT, TO RECORD SATISFACTION THAT THE A SSESSEES INCOME ESCAPED ASSESSMENT, AND IN THE ABSENCE OF RECORDING SATISFACTION BY THE ASSESSING OFFICER DEALING WITH THE MATTER OF SH RI B.RAMDAS GOUD, THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 7 , HYDERABAD HAS NO JURISDICTION TO INITIATE THE PROCEEDINGS UNDER S .153C OF THE ACT IN THE CASE OF THE ASSESSEES HEREIN. IN THIS REGARD, THE ASSESSEES PLACED BEFORE US A COPY OF CIRCULAR NO.24/2015 ISSU ED BY THE CBDT, (F.NO.279/MISC./140/2015(ITJ) DATED 31.12.2015), WH EREIN THE CENTRAL BOARD OBSERVED THAT THE HON'BLE SUPREME COU RT IN THE CASE OF CIT V/S. CALCUTTA KNITWEARS (362 ITR 673) HAS LAID DOWN THAT FOR THE PURPOSE OF S.158BD OF THE ACT, RECORDING OF A SATIS FACTION NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREP ARED BY THE ASSESSING OFFICER BEFORE HE TRANSMITS THE RECORD TO THE OTHER ASSESSING OFFICER WHO HAS JURISDICTION OVER SUCH OTHER PERSON U/S. 1538BD OF THE ACT, AND THE BOARD FURTHER OBSERVED THAT THE PROV ISIONS OF S.153C ARE SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF S.158BD OF THE ACT AND THEREFORE, THE ABOVE GUIDELINES OF THE HON'BLE SUPR EME COURT APPLY TO THE PROCEEDINGS UNDER S.153C OF THE ACT. IN PARA 5 OF THE CIRCULAR, IT ITA NO.1199/HYD/2014 & NINE OTHERS SHRI B.PRABHAKAR GOUD & OTHERS , RR DISTRICT 4 WAS CLARIFIED THAT EVEN IN THE PENDING LITIGATION, IF SATISFACTION IS NOT AVAILABLE, THE REVENUE HAS TO ABIDE BY THE GUIDELIN ES ISSUED BY CBDT WHICH ARE IN TERMS OF THE GUIDELINES LAID DOWN BY T HE APEX COURT. LEARNED COUNSEL ALSO PLACED BEFORE US A COPY OF THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S. S HETTYS PHARMACEUTICALS & BIOLOGICALS LTD.(2015)57.TAXMANN. COM.282(ANDHRA PRADESH) WHEREIN THE HON'BLE COURT OBSERVED THAT R ECORDING OF SATISFACTION IS A PRECONDITION FOR INVOKING JURISDI CTION UNDER S.153C OF ACT AND IN THE ABSENCE OF FOLLOWING OF SUCH PROCEDU RE, THE ASSESSMENTS FRAMED UNDER S.153C DESERVE TO BE QUASHED. 7. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMI TTED THAT THE ISSUE STANDS SQUARELY COVERED BY THE CIRCULAR I SSUED BY THE CBDT AS WELL AS THE DECISION OF THE JURISDICTIONAL HIGH COURT. AT THE SAME TIME, THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTE NDED THAT NON- RECORDING OF SATISFACTION IS ONLY A PROCEDURAL IRRE GULARITY AND ONE HAS TO REFER TO THE FACTS OF THE CASE AND THE INCRIMINATI NG DOCUMENTS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS TO APPRECIA TE WHETHER IT IS A DESERVING CASE FOR INITIATING THE PROCEEDINGS UNDE R S.153C OF THE ACT. THUS, HE STRONGLY SUPPORTED THE ORDER PASSED BY THE ASSESSING OFFICER. 8. HAVING REGARD TO THE RIVAL SUBMISSIONS AND IN THE LIGHT OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN LI NE WITH THE VIEW TAKEN BY THE APEX COURT AND THE BINDING CIRCULAR ISSUED B Y THE CBDT(BINDING UPON THE REVENUE), WE ARE OF THE VIEW THAT THE PRO CEEDINGS INITIATED UNDER S.153C OF THE ACT IN THE CASES OF THESE ASSES SEES FOR THE RELEVANT YEARS UNDER APPEAL, DESERVE TO BE QUASHED IN AS MUCH AS THE CONCERNED ASSESSING OFFICER HAS ADMITTEDLY NOT RECO RDED ANY SATISFACTION BEFORE FORWARDING THE FILES TO THE ASS ESSING OFFICER IN WHOSE CHARGE, THE ASSESSEE HEREIN ARE ASSESSED. IN OTHER WORDS, THE ASSESSMENTS MADE UNDER S.153C OF THE ACT ARE HEREBY QUASHED. IN ITA NO.1199/HYD/2014 & NINE OTHERS SHRI B.PRABHAKAR GOUD & OTHERS , RR DISTRICT 5 THIS VIEW OF THE MATTER, THE OTHER GROUNDS URGED BY THE ASSESSEES HAVE NO LEGS STAND, SINCE THE VERY ASSESSMENTS GIVI NG RISE TO THESE APPEALS ARE QUASHED. 9. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT , APPEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED AND TH E APPEALS FILED BY THE REVENUE ARE TREATED AS DISMISSED. SD/- SD/- (S.RIFAUR RAHMAN) (D.MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT DT/- 11 TH FEBRUARY, 2016 COPY FORWARDED TO: 1. SHRI B. PRABHAKAR GOUD, (PARVATHAPUR) C/O. B.NARSIN G RAO & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO.92, JUB ILEE HILLS, HYDERABAD 96. 2. SHRI RAGHUVEER SINGH (MEDIPALLY VILLAGE), SHRI B. P RABHAKAR GOUD, (PARVATHAPUR, UPPAL, RR DISTRICT) C/O. B.NARSING R AO & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO.92, JUB ILEE HILLS, HYDERABAD 96. 3. SMT. B.MADHAVI, (PARVATHAPUR) C/O. B.NARSING RAO & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO.92, JUB ILEE HILLS, HYDERABAD 96. . 4. SMT. B.RAJYALAKSHMI (PARVATHAPUR) C/O. B.NARSING RA O & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO.92, JUB ILEE HILLS, HYDERABAD 96. 5. 6. 7. DY. COMMI SSIONER OF INCOME - TAX CENTRAL CIRCLE 7, HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS), GUNTUR COMMISSIONER OF INCOME - TAX (CENTRAL), HYDERABAD 8. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.