Smt Sunitha Prasad, Hyderabad V. ACIT., CC-3, Hyderabad

ITA 1463/HYD/2014

• Counselvise Citation: 146322514 RSA 2014
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 08-01-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDY
• Assessee Lawyers: S MR P MURALI MOHAN RAO
• Keywords: Rectification of order; Search and seizure; Principle of natural justice
• Section: 143(3); 132; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.1450/HYD/2014 ASSESSMENT YEAR 2009-2010 ITA.NO. A.Y. APPELLANT RESPONDENT 1450/H/2014 2009- 2010 MR. SYED RAFIUDDIN HYDERABAD PAN BERPS6026J ACIT, C.C.3 HYDERABAD. 1453/H/2014 DR. P.S. PRASAD HYDERABAD PAN AAMPP4844K 1454/H/2014 MR. M. SURENDRANATH HYDERABAD PAN AFYPM6952L 1455/H/2014 MRS. L. PREETHA PRIYADARSHINI HYDERABAD. PAN AAUPL9809Q 1456/H/2014 SMT. MAHITA PRASAD CADELL HYDERABAD. PAN ARWPC6119M 1461/H/2014 MRS. L. REENA PETERSON HYDERABAD. PAN APOPP0610C 1462/H/2014 MR. S. SATYANARAYANA, HYDERABAD. PAN AULPS1897G 1463/H/2014 SMT. SUNITA PRASAD HYDERABAD PAN BKGPP3507E FOR ASSESSEES : MR. P. MURALI MOHAN RAO FOR REVENUE : MR. P. SOMASEKHAR REDDY DATE OF HEARING : 19.05.2015 DATE OF PRONOUNCEMENT : 27.05.2015 2 ITA.NO.1450, 1453 TO 1456, 1461 TO 1463/H/2014 MR. SYED RAFIUDDIN & OTHERS, HYDERABAD. ORDER PER BENCH : THESE 8 APPEALS FILED BY 8 ASSESSEES AGAINST THE COMMON ORDER OF THE LD. CIT(A)-VII, HYDERABAD INVOL VE COMMON ISSUES AND THE SAME THEREFORE HAVE BEEN HEAR D TOGETHER AND ARE BEING DISPOSED OF BY A SINGLE COMP OSITE ORDER FOR THE SAKE OF CONVENIENCE. 2. THE RELEVANT FACTS OF THE CASE GIVING RISE TO T HESE APPEALS ARE AS FOLLOWS. A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED IN THE CASE OF M/S. MBS JEWELLERS P. LTD., AS WELL AS OTHER GROUP CONCERNS ON 11.03.2010. DURING THE COURSE OF SEARCH, CERTAIN DO CUMENTS RELEVANT TO THE ASSESSEES IN THE PRESENT CASES WERE FOUND AND SEIZED. ACCORDINGLY, NOTICES UNDER SECTION 153C WER E ISSUED, IN RESPONSE TO WHICH, RETURNS OF INCOME FOR THE YEAR U NDER CONSIDERATION I.E., A.Y. 2009-2010 WERE FILED BY TH E ASSESSEES. IN THE ASSESSMENTS COMPLETED UNDER SECTION 143(3) R EAD WITH SECTION 153C OF THE ACT, THE INCOME OF THE ASSESSES FROM SALE OF LAND WAS BROUGHT TO TAX BY THE A.O. IN THEIR HANDS AS LONG TERM CAPITAL GAINS CHARGEABLE TO TAX AT THE CONCESS IONAL RATE OF 20%. SUBSEQUENTLY, THE A.O. REALIZED THAT THE CAPIT AL GAIN CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEES WAS ACTUALLY A SHORT TERM CAPITAL GAIN CHARGEABLE TO TAX AT NORMAL RATES. HE THEREFORE ISSUED NOTICES TO THE ASSESSEES UNDER SEC TION 154 ON 04.03.2013 SEEKING THE EXPLANATION OF THE ASSESSEES AS TO WHY THE SAID MISTAKE IN THE ORDERS PASSED UNDER SECTION 143(3) READ WITH SECTION 153C OF THE ACT SHOULD NOT BE REC TIFIED. THE HEARING FOR THIS PURPOSE WAS FIXED BY THE A.O. ON 0 8.03.2013. THE ASSESSEE HOWEVER DID NOT APPEAR BEFORE THE A.O. ON 3 ITA.NO.1450, 1453 TO 1456, 1461 TO 1463/H/2014 MR. SYED RAFIUDDIN & OTHERS, HYDERABAD. 08.03.2013 AND KEEPING IN VIEW OF THIS NON-COMPLIAN CE ON THE PART OF THE ASSESSEES, THE A.O. PASSED ORDERS UNDER SECTION 154 ON 08.03.2013 CHARGING CAPITAL GAINS AS SHORT T ERM CAPITAL GAIN IN THE HANDS OF THE ASSESSEES AND CALCULATED T HE TAX PAYABLE THEREON AT NORMAL RATE. 3. AGGRIEVED BY THE ORDERS PASSED BY THE A.O. UNDE R SECTION 154, APPEALS WERE PREFERRED BY THE ASSESSEE S BEFORE THE LD. CIT(A). IT WAS CONTENDED ON BEHALF OF THE ASSES EES BEFORE THE LD. CIT(A) THAT THE ISSUE AS TO WHETHER THE CAP ITAL GAIN WAS CHARGEABLE TO TAX AS LONG TERM CAPITAL GAIN OR SHOR T TERM CAPITAL GAIN, WAS DEBATABLE ISSUE AND THE SAME THER EFORE WAS BEYOND THE SCOPE OF RECTIFICATION PERMISSIBLE UNDER SECTION 154. THE LD. CIT(A) DID NOT FIND MERIT IN THIS CONT ENTION RAISED ON BEHALF OF THE ASSESSEES AND UPHOLDING THE ORDERS PASSED BY THE A.O. UNDER SECTION 154, HE DISMISSED THE APPEAL S FILED BY THE ASSESSEE BY A COMMON ORDER DATED NIL WHICH IS I MPUGNED BY THE ASSESSEES IN THE PRESENT APPEALS FILED BEFOR E THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. A LTHOUGH THE ASSESSEES HAVE RAISED VARIOUS GROUNDS IN THEIR APPE ALS, THE LD. COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEF ORE US HAS RAISED A PRELIMINARY ISSUE THAT NO PROPER AND SUFFI CIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEES BY THE A.O. BEFORE PASSING THE ORDERS UNDER SECTION 154 RECTIFYING THE SO-CALLED MISTAKE IN THE ORDERS PASSED UNDER SECTION 143(3) R EAD WITH SECTION 153C OF THE ACT. AS POINTED OUT BY HIM, THE NOTICES UNDER SECTION 154 WERE ISSUED BY THE A.O. REQUIRING THE ASSESSEES TO APPEAR ON 08.03.2013. A VERY SHORT PER IOD OF 4 4 ITA.NO.1450, 1453 TO 1456, 1461 TO 1463/H/2014 MR. SYED RAFIUDDIN & OTHERS, HYDERABAD. DAYS THUS WAS ONLY ALLOWED BY THE A.O. BECAUSE OF W HICH, THE ASSESSEES COULD NOT APPEAR BEFORE THE A.O. ON 08.03 .2013. THE A.O. HOWEVER, PROCEEDED TO PASS THE ORDERS UNDER SE CTION 154 WITHOUT GIVING ANY MORE OPPORTUNITY TO THE ASSESSEE S AND THIS POSITION CLEARLY EVIDENT FROM THE ORDERS PASSED BY THE A.O. UNDER SECTION 154 SHOWS THAT PROPER AND SUFFICIENT OPPORTUNITY WAS NOT GIVEN BY THE A.O. TO THE ASSESS EES BEFORE PASSING THE RECTIFICATION ORDERS UNDER SECTION 154. WE THEREFORE, ARE INCLINED TO AGREE WITH THE CONTENTIO N OF THE LD. COUNSEL FOR THE ASSESSEE THAT THERE WAS A CLEAR VIO LATION OF PRINCIPLES OF NATURAL JUSTICE ON THE PART OF THE A. O. WHILE PASSING THE ORDERS UNDER SECTION 154 AND SINCE THIS POSITION IS NOT DISPUTED EVEN BY THE LEARNED D.R., WE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AS WELL AS THE ORD ERS PASSED BY THE A.O. UNDER SECTION 154 AND RESTORE THE MATTE R TO THE FILE OF THE A.O. FOR PASSING THE ORDERS UNDER SECTION 15 4 AFRESH, AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPP ORTUNITY OF BEING HEARD. 5. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27.05 .2015. SD/- SD/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 27 TH MAY, 2015. VBP/- 5 ITA.NO.1450, 1453 TO 1456, 1461 TO 1463/H/2014 MR. SYED RAFIUDDIN & OTHERS, HYDERABAD. COPY TO 1. MR. SYED RAFIUDDIN, HYDERABAD. C/O. P. MURALI & CO. CHARTERED ACCOUNTANTS 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2. DR. P.S. PRASAD, HYDERABAD 3. MR. M. SURENDRANATH, HYDERABAD 4. MRS. L. PREETHA PRIYADARSHINI, HYDERABAD. 5. SMT. MAHITA PRASAD CADELL, HYDERABAD. 6. MRS. L. REENA PETERSON, HYDERABAD. 7. MR. S. SATYANARAYANA, HYDERABAD. 8. SMT. SUNITA PRASAD, HYDERABAD. 9. CIT(A)-VII, 3 RD FLOOR ANNEXE, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 10. CIT (CENTRAL), HYDERABAD 11. GUARD FILE.