Syed Rafiuddin, Hyderabad V. Asst.CIT, Central Circle-3, Hyderabad

ITA 1218/HYD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98797 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 143(3); 142(1); 132; 154

Judgement Text

1 ITA.NOS.1082 TO 1087/H/2014, 1090 & 1091/H/2014 AND ITA.NOS.1211 TO 1218/HYD/2014 MR. S. SATYANARAYANA, HYDERABAD AND OTHERS. IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO. A.Y. APPELLANT RESPONDENT 1082/H/2014 2006-07 MR. S. SATYANARAYANA, PAN AULPS1897G ACIT, CENTRAL CIRCLE-3, HYDERABAD. 1083/H/2014 MR. M. SURENDRANATH, PAN AFYPM6952L 1084/H/2014 MR. SYED RAFIUDDIN, PAN BERPS6026J 1085/H/2014 SMT. MAHITA PRASAD CADELL, PAN ARWPC6119M 1086/H/2014 DR. P.S. PRASAD PAN AAMPP4844K 1087/H/2014 SMT. SUNITA PRASAD, PAN BKGPP3507E 1090/H/2014 MRS. L. REENA PETERSON, PAN APOPP0610C 1091/H/2014 MRS. L. PREETHA PRIYADARSHINI, PAN AAUPL9809Q 1211/H/2014 DR. P.S. PRASAD PAN AAMPP4844K 1212/H/2014 SMT. MAHITA PRASAD CADELL, PAN ARWPC6119M 1213/H/2014 SMT. SUNITA PRASAD, PAN BKGPP3507E 1214/H/2014 MRS. L. REENA PETERSON, PAN APOPP0610C 2 ITA.NOS.1082 TO 1087/H/2014, 1090 & 1091/H/2014 AND ITA.NOS.1211 TO 1218/HYD/2014 MR. S. SATYANARAYANA, HYDERABAD AND OTHERS. 1215/H/2014 2006-07 MR. M. SURENDRANATH, PAN AFYPM6952L ACIT, CENTRAL CIRCLE-3, HYDERABAD. 1216/H/2014 MR. S. SATYANARAYANA, PAN AULPS1897G 1217/H/2014 MRS. L. PREETHA PRIYADARSHINI, PAN AAUPL9809Q 1218/H/2014 MR. SYED RAFIUDDIN, PAN BERPS6026J * ALL THE APPELLANTS ARE RESIDENTS OF HYDERABAD. FOR ASSESSEE : MR. P. MURALIMOHAN RAO FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 02.12.2015 DATE OF PRONOUNCEMENT : 09.12.2015 ORDER PER BENCH : ALL ARE APPEALS OF THE RESPECTIVE ASSESSEES FOR THE A.Y. 2006-07. THE ASSESSEES ARE IN APPEAL BEFOR E US AGAINST THE ORDER OF THE LD. CIT(A) IN CONFIRMING T HE DISALLOWANCES AND THE CONSEQUENTIAL ADDITIONS MADE BY THE A.O. UNDER SECTION 143(3) READ WITH SECTION 153 C OF THE I.T. ACT AND ALSO AGAINST THE CONFIRMATION OF T HE ORDER OF THE A.O. PASSED UNDER SECTION 154 OF THE I.T. AC T. 2. IN THE APPEALS AGAINST THE ASSESSMENT ORDER UNDER SECTION 143(3) READ WITH SECTION 153C I.E., I N ITA.NOS.1082/HYD/2014 TO ITA.NO.1087/HYD/2014 AND ITA.NO.1091/HYD/2014, THE ASSESSEES HAVE RAISED 3 ITA.NOS.1082 TO 1087/H/2014, 1090 & 1091/H/2014 AND ITA.NOS.1211 TO 1218/HYD/2014 MR. S. SATYANARAYANA, HYDERABAD AND OTHERS. GROUNDS OF APPEAL AGAINST THE ADDITIONS CONFIRMED B Y THE LD. CIT(A) AND ALSO HAVE RAISED ADDITIONAL GROUNDS OF APPEAL CHALLENGING THE VALIDITY OF THE PROCEEDINGS UNDER SECTION 153C OF THE I.T. ACT. GROUND NOS. 16 AND 17 ARE AGAINST THE INVOCATION OF THE PROVISIONS OF SECTION 153C OF THE I.T. ACT WITHOUT RECORDING THE SATISFACTION THA T THE INCOME BELONGS TO THE ASSESSEES HEREIN. IN SUPPORT OF GROUND NO.16, THE ASSESSEE HAS PLACED RELIANCE UPON THE DECISION OF THE HONBLE A.P. HIGH COURT IN THE CASE OF CIT- III, HYDERABAD VS. SHETTYS PHARMACEUTICALS & BIOLOG ICALS LTD., (2015) 57 TAXMANN.COM 282 (A.P.) IN GROUND NO .17. SINCE THESE GROUNDS ARE ON LEGAL ISSUES AND DOES NO T REQUIRE ANY VERIFICATION OF FRESH FACTS, RESPECTFUL LY FOLLOWING THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC REPORTED IN 229 ITR 383 (SC), WE A DMIT THE ADDITIONAL GROUNDS OF APPEAL RAISED BY THE ASSE SSEE. 2.1. THE LD. COUNSEL FOR THE ASSESSEE, HAS ALSO FI LED THE CHARTS IN ALL THE ABOVE CASES AGAINST THE ASSES SMENT ORDERS UNDER SECTION 143(3) READ WITH SECTION 153C OF THE ACT REPRODUCING THE ORDER SHEET ENTRIES IN THE CASE OF ALL THESE ASSESSEES FOR INVOKING THE PROVISIONS OF SECT ION 153C OF THE I.T. ACT. AS SEEN IN THE CASE OF SMT. R EENA PETERSON, THE ORDER SHEET ENTRY IS AS FOLLOWS : MRS. REENA PETERSON, PAN APOPP0610C W/O. PETERSON ASST. YEAR 2006-07 #14/240, MIRJALGUDA MALKAJGIRI HYDERABAD. 4 ITA.NOS.1082 TO 1087/H/2014, 1090 & 1091/H/2014 AND ITA.NOS.1211 TO 1218/HYD/2014 MR. S. SATYANARAYANA, HYDERABAD AND OTHERS. SEARCH & SEIZURE OPERATIONS WERE CONDUCTED IN THE MBS JEWELLERS PVT. LTD., GROUP OF CASES ON 11.03.2010. DURING THE COURSE OF SEARCH, BOOKS OF ACCOUNTS, DOCUMENTS & OTHER LOOSE SHEETS WERE FOUND AND SEIZED. AS PER THE SEIZED DOCUMENTS, PAGES 03 T O 09 OF ANNEXURE A/PCG/RES/01 RELATES TO MRS. REENA PETERSON W/O. R. PETERSON PROCEEDINGS U/S.153C IS INITIATED. PUT UP NOTICES U/S.153C & 142(1) OF THE IT ACT. 3. SIMILAR ORDER SHEET ENTRIES ARE ALSO MADE IN THE CASE OF OTHER ASSESSEES AS WELL. FROM THESE NOT INGS, IT IS SEEN THAT THE PROCEEDINGS UNDER SECTION 153C ARE INITIATED ONLY BECAUSE THERE WERE CERTAIN MATERIAL DOCUMENTS SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF MBS JEWELLERS P. LTD., AND CERTAIN PAGES THEREIN RELATE TO THE ASSESSEES HEREIN. THERE IS NO SATISFACTION R ECORDED BY THE A.O. IN THE CASE OF MBS JEWELLERS P. LTD., T HAT THE INCOME MENTIONED IN THE DOCUMENTS BELONGS TO THE ASSESSEES HEREIN. THE HONBLE A.P. HIGH COURT IN TH E CASE OF CIT-III, HYDERABAD VS. SHETTYS PHARMACEUTICALS & BIOLOGICALS LTD., (SUPRA) HAS HELD AS UNDER : HELD : IT IS CLEAR FROM SECTION 153C THAT FIRSTLY SATISFACTION HAS TO BE RECORDED BY THE ASSESSING OFFICER WHO CONDUCTED SEARCH, THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION ED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. THEREAFTER, THE ASSESS ING OFFICER HAVING JURISDICTION OVER THIRD PARTY ON REC EIPT OF THE SEIZED MATERIAL OR BOOKS OF ACCOUNT OR DOCUMENT BEING HANDED OVER TO HIM SHALL RECORD HIS OWN SATISFACTION AFTER EXAMINING THE SAME INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE 5 ITA.NOS.1082 TO 1087/H/2014, 1090 & 1091/H/2014 AND ITA.NOS.1211 TO 1218/HYD/2014 MR. S. SATYANARAYANA, HYDERABAD AND OTHERS. SATISFACTION OF THE SEIZING OFFICER. IN OTHER WORDS IT IS NOT AN AUTOMATIC ACTION. SATISFACTION OF TWO OFFICE RS IS MISSING. IN THIS CONNECTION THE TEXT OF THE ORDER O F THE ASSESSING OFFICER IS THAT A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 WAS CARRIED OUT IN THE GROUP CASE OF TYG AND OTHERS ON 25-3-2010. DURING THE COURSE OF SEARCH OPERATION DOCUMENTS BELONGING TO THE ASSESSEE HAVE BEEN SEIZED. HENCE, IT IS CONSIDERED TO INITIATE PROCEEDING UNDER SECTION 153 C. [PARA 6J THE AFORESAID SECTION MANDATES RECORDING OF SATISFACTION OF THE ASSESSING OFFICER(S) IS A PRE- CONDITION FOR INVOKING JURISDICTION AND IT IS NOT A MERE FORMALITY BECAUSE RECORDING OF SATISFACTION POSTULA TES APPLICATION OF MIND CONSCIOUSLY AS THE DOCUMENTS SEIZED MUST BE BELONGING TO THE ANY OTHER PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. IT WAS CONTENDED THAT THE SAME ASSESSING OFFICER WAS INVOLVED IN THE MATTER. THIS FACT DOES NOT DISPENSE WITH ABOVE REQUIREMENT. IT IS SETTLED POSI TION OF LAW THAT WHEN A THING IS TO BE DONE IN ONE PARTICULAR MANNER UNDER LAW THIS HAS TO BE DONE IN THAT MANNER ALONE AND NOT OTHER WAY. THE TRIBUNAL HAS CORRECTLY FOLLOWED THE PRINCIPLE. THERE WAS NO ELEMENT OF LAW TO BE DECIDED. [PARA 7). THE APPEAL WAS DISMISSED ACCORDINGLY. [PARA 9] 4. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT ON SIMILAR SET OF FACTS, WE HAVE NO HESITATION IN HOLDING THAT THE A.O. OF THE PERSO N SEARCHED HAS NOT RECORDED ANY SATISFACTION THAT THE INCOME RELATABLE TO THE SEIZED MATERIAL BELONGS TO THE ASSESSEES HEREIN. THEREFORE, THE ASSESSMENTS ARE QUASHED. 6 ITA.NOS.1082 TO 1087/H/2014, 1090 & 1091/H/2014 AND ITA.NOS.1211 TO 1218/HYD/2014 MR. S. SATYANARAYANA, HYDERABAD AND OTHERS. 5. THE ITA.NOS.1211 TO 1218/HYD/2014 ARE ALL AGAINST THE ORDER OF THE A.O. UNDER SECTION 154 OF THE ACT RECTIFYING THE ASSESSMENT ORDER UNDER SECTION 143(3 ) READ WITH SECTION 153C OF THE I.T. ACT. SINCE THE VERY B ASIS I.E., THE ASSESSMENTS UNDER SECTION 143(3) READ WITH SECT ION 153C OF THE I.T. ACT HAVE BEEN QUASHED, THE ORDER P ASSED BY THE A.O. U/S. 154 HAS NO LEGS TO STAND. THEREFOR E, THE APPEALS AGAINST THE ORDER OF THE CIT(A) CONFIRMING THE ORDER OF THE A.O. UNDER SECTION 154 ARE ALSO QUASHE D AS HAVING NO BASIS. 4. IN THE RESULT, ALL THE APPEALS OF THE RESPECTIV E ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.12.2015. SD/- SD/- (S. RIFAUR RAHMAN) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 09 TH DECEMBER, 2015 VBP/- 7 ITA.NOS.1082 TO 1087/H/2014, 1090 & 1091/H/2014 AND ITA.NOS.1211 TO 1218/HYD/2014 MR. S. SATYANARAYANA, HYDERABAD AND OTHERS. COPY TO 1. MR. S. SATYANARAYNA, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2. MR. M. SURENDRANATH, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 3. MR. SYED RAFIUDDIN, HYDERABAD C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 4. SMT. MAHITA PRASAD CADELL, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 5. DR. P.S. PRASAD, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 6. SMT. SUNITA PRASAD, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 7. MRS. L. REENA PETERSON, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 8. MRS. L. PREETHA PRIYADARSHINI, HYDERABAD. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 9. COMMISSIONER OF INCOME TAX (APPEALS)-VII, 3 RD FLOOR ANNEXE, AAYAKAR BHAVAN, BAHSEERBAGH, HYDERABAD. 10. COMMISSIONER OF INCOME TAX (CENTRAL), HYDERABAD. 11. D.R. I.T.A.T. B BENCH, HYDERABAD. 12. GUARD FILE