Mr. T.V. Prabhu, Bangalore V. ACIT, Bangalore

ITA 151/BANG/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9379 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-04-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI A.K.GARODIA, ACCOUNANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NOS. A.Y. APPELLANT V S . RESPONDENT 1 ITA NO.152(B)/2012 2006-07 M/S R.V.T.V.RESIDENCY, SIDDAIAH ROAD CROSS, LALBAGH FORT ROAD, BANGALORE-560 002 ACIT, CENTRAL CIRCLE- 2(1), BANGALORE 2 ITA NO. 151(B)/2012 2006-07 SHRI T.V.PRABHU, NO.17, 3 RD CROSS, JOURNALIST COLONY, BANGALORE ACIT, CENTRAL CIRCLE- 2(1), BANGALORE 3 ITA NO. 153 (B)/2012 2007 - 08 M/S R.V.T.V.RESIDENCY, SIDDAIAH ROAD CROSS, LALBAGH FORT ROAD, BANGALORE-560 002 ACIT, CENTRAL CIRCLE - 2(1), BANGALORE 4 C.O.65(B)/2012 2007-08 SHRI T.V.PRABHU, NO.17, 3 RD CROSS, JOURNALIST COLONY, BANGALORE DCIT, CENTRAL CIRCLE- 2(1), BANGALORE 5 ITA NO.330(B)/2012 2006-07 DCIT, CENTRAL CIRCLE- 2(1), BANGALORE SHRI T.V.PRABHU, NO.17, 3 RD CROSS, JOURNALIST COLONY, BANGALORE 6 ITA NO.331(B)/2012 2007-08 DCIT, CENTRAL CIRCLE- 2(1), BANGALORE SHRI T.V.PRABHU, 7 ITA NO.332(B )/2012 2006-07 DCIT, CENTRAL CIRCLE- 2(1), BANGALORE M/S R.V.T.V.RESIDENCY, SIDDAIAH ROAD CROSS, LALBAGH FORT ROAD, BANGALORE - 560 002 8 ITA NO.3339B)/2012 2007-08 DCIT, CENTRAL CIRCLE- 2(1), BANGALORE M/S R.V.T.V.RESIDENCY, SIDDAIAH ROAD CROSS, LALBAGH FORT ROAD, BANGALORE-560 002 ASSESSEE BY : SHRI S.PARTHASARATH I, ADVOCATE & SHRI CUDDAPAH RAMESH, CA REVENUE BY : MS. NEERA MALHOTRA, CIT DATE OF HEARING : 11-08-2016 DATE OF PRONOUNCEMENT : 21-09-2016 O R D E R PER A. K. GARODIA, A. M.:- OUT OF THIS BUNCH OF EIGHT APPEALS AND CROSS OBJECT ION, THERE ARE FOUR CROSS APPEALS IN THE CASE OF THE ASSESSEE SHRI T.V.PRABHU FOR A. Y. 2006 07 & 2007 08 AND REMAINING FOUR APPEALS ARE CROSS APPEALS FOR TH E ASSESSMENT YEAR: 2006-07 ITANOS.151,152,153,330,331, 332,333 & CO NO.65(B)/2012 2 2007-08 IN THE CASE OF A DIFFERENT ASSESSEE I.E. M/ S R.V.T.V.RESIDENCY. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. AT THE VERY OUTSET, IT WAS SUBMITTED BY THE LD. AR OF THE ASSESSEE THAT IN BOTH THE CASES AND IN BOTH THE YEARS I.E. SHRI T.V. PRABHU, FOR ASSESSMENT YEARS 2006- 07 AND 2007-08 AND M/S R.V.T.V. RESIDENCY FOR ASSES SMENT YEARS 2006-07 & 2007- 08, NO SATISFACTION WAS RECORDED BY THE AO OF THE S EARCHED PERSON AND THEREFORE, THE ASSESSMENT ORDERS PASSED U/S 153C OF THE ACT ARE NO T VALID AND IN SUPPORT OF THIS CONTENTION, HE PLACED RELIANCE ON THE JUDGMENT OF T HE HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS IBC KNOWLEDGE PARK P VT. LTD. REPORTED IN 385 ITR 346 (KAR.). THEREAFTER, HE SUBMITTED THAT THE SEARCH WA S CONDUCTED IN THE CASE OF SHRI R.V. DEVARAJ, ONE OF THE BUSINESS ASSOCIATE OF SHRI T.V.PRABHU ON 06-01-2009 AND IT IS ADMITTED POSITION OF THE FACT THAT NO SUCH SATIS FACTION WAS RECORDED BY THE A. O. OF THE SEARCHED PERSON AND IN THIS REGARD, HE SUBMITTE D THAT THE FINDING OF THE LD. CIT(A) IS THIS THAT NON-RECORDING OF SUCH SATISFACTION IS CURABLE DEFECT BUT AS PER THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT, SUCH DEFECT IS FATAL TO THE ASSESSMENT. HE ALSO SUBMITTED THAT COPY OF CBDT CIR CULAR NO. 24/2015 DATED 31.12.2015 IS AVAILABLE ON PAGE 76 OF THE PAPER BOO K AND AS PER THIS, IT IS STATED THAT AS PER SEVERAL HIGH COURTS, PROVISIONS OF SECTION 1 53C OF THE I. T. ACT ARE SUBSTANTIALLY SIMILAR/PARI MATERIA TO THE PROVISION S OF SECTION 158 BD AND THEREFORE, THE JUDGMENT OF HONBLE APEX COURT IN THE CASE OF M /S CALCUTTA KNITWEARS IS APPLICABLE TO PROCEEDINGS U/S 153C ALSO. IT IS ALSO STATED IN THIS CIRCULAR THAT EVEN IF THE A.O. OF THE SEARCHED PERSON AND THE OTHER PERSO N IS ONE AND THE SAME, THEN ALSO ITANOS.151,152,153,330,331, 332,333 & CO NO.65(B)/2012 3 THE A.O. OF THE SEARCHED PERSON IS REQUIRED TO RECO RD HIS SATISFACTION-. REGARDING THE SO CALLED SATISFACTION NOTE, HE SUBMITTED THAT THIS IS RECORDED BY THE A.O. OF THE ASSESSEE AND NOT BY THE A.O. OF THE SEARCHED PERSON . 3. THE LD. DR OF THE REVENUE SUPPORTED THE ASSESSME NT ORDER IN BOTH THESE CASES IN BOTH THESE YEARS. AT THIS JUNCTURE, SPECI FIC QUERY WAS RAISED BY THE BENCH ASKING THE LD. DR AS TO WHETHER THE REVENUE CAN PRO DUCE ANY EVIDENCE TO SHOW THAT THE REQUIRED SATISFACTION WAS RECORDED BY THE AO OF THE SEARCHED PERSON BUT NO SUCH SATISFACTION NOTE COULD BE PRODUCED BY THE LEARNED DR OF THE REVENUE ALTHOUGH HE SUBMITTED THE COPY OF SATISFACTION NOTES BUT THE SA ME WERE RECORDED BY THE A.O. OF THE ASSESSEE. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH SIDES AND HAVE GONE THROUGH THE MATERIAL AVAILABLE ON RECORD AND ALSO THE JUDGM ENT OF THE HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT VS IBC KNOWL EDGE PARK PVT. LTD., (SUPRA). IN THAT CASE, IT WAS HELD THAT THE TRIBUNAL WAS NOT CO RRECT IN HOLDING THAT THE ASSESSMENT U/S 153C WAS VALID DESPITE THERE BEING N O SATISFACTION RECORDED TO THE EFFECT THAT THE DOCUMENTS FOUND DURING THE SEARCH W ERE INCRIMINATING IN NATURE AND PRIMA FACIE REPRESENTED UNDISCLOSED INCOME. IT WAS ALSO HELD THAT SEC.153C OF THE ACT, IS PARI MATERIA TO SEC.158BD OF THE ACT AND THEREFORE, RECORDING OF SATISFACTION THAT UNDISCLOSED INCOME IS BELONGING TO THIRD PARTY HAS TO BE COMPLIED WITH AND IF THE SAME IS NOT RECORDED BY THE A.O. OF THE SEARCHED PE RSON THEN THE ASSESSMENT U/S153C OF THE ACT IS NOT VALID. 5. IN THE PRESENT CASE, THE REVENUE COULD NOT SHOW THAT ANY SATISFACTION WAS RECORDED AS REQUIRED U/S 153C OF THE ACT BY THE AO OF THE SEARCHED PERSON. AS PER THE LETTER OF THE A.O. SUBMITTED IN COURSE OF HEARI NG ON 09.08.2016, HE HAS SUBMITTED ITANOS.151,152,153,330,331, 332,333 & CO NO.65(B)/2012 4 COPY OF TWO SATISFACTION NOTES AND THE ASSESSMENT O RDER IN THE CASE OF SHRI R V DEVRAJ FOR A. Y. 2006 07 U/S 153A DATED 30.12.201 0. IN THE SO CALLED SATISFACTION NOTES, IT IS STATED THAT NOTICE U/S 153C ISSUED. HENCE IT HAS TO BE ACCEPTED THAT THIS IS RECORDED BY THE A.O. OF THE ASSESSEE AND THAT TO O AFTER ISSUE OF NOTICE U/S 153C AND THERE IS NO DATE IN THE SAID SATISFACTION NOTE. UNDER THESE FACTS, BY RESPECTFULLY FOLLOWING THIS JUDGMENT OF THE HONBLE KARNATAKA HI GH COURT, WE HOLD THAT THE ASSESSMENTS U/S 153C OF THE ACT, 1961 IN BOTH THESE CASES IN BOTH THESE YEARS ARE NOT VALID AND SUSTAINABLE AND THEREFORE, ALL THESE FOUR ASSESSMENT ORDERS ARE QUASHED. 6. IN VIEW OF OUR ABOVE DECISION IN THE ABOVE PARA, OTHER GROUNDS RAISED IN ASSESSEES APPEALS AND THE CROSS OBJECTION ARE NOT REQUIRED TO BE DECIDED SEPARATELY AND ALL THE FOUR APPEALS FILED BY THE REVENUE DO NO T SURVIVE BECAUSE WHEN THE ASSESSMENT ITSELF IS NOT VALID, NO ADDITION CAN BE MADE OVER AND ABOVE THE RETURNED INCOME IF ANY AND THEREFORE, EVEN IF THE SAME IS MA DE BY THE AO AND WAS DELETED BY THE LD. CIT(A), NO SUCH APPEAL OF THE REVENUE IS RE QUIRED TO BE DECIDED SEPARATELY AGAINST DELETION OF SUCH ADDITIONS. 7. IN THE RESULT, ALL THE THREE APPEALS OF THE ASSE SSEE AND THE CROSS OBJECTION OF THE ASSESSEE ARE ALLOWED AND ALL THE FOUR APPEALS O F THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. (ASHA VIJAYARAGHAVAN) (A.K. GA RODIA) JUDICAL MEMBER ACCOUNTANT MEMBER BANGALORE: D A T E D : .09.2016 ITANOS.151,152,153,330,331, 332,333 & CO NO.65(B)/2012 5 AM* COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE ITANOS.151,152,153,330,331, 332,333 & CO NO.65(B)/2012 6 1. DATE OF DICTATION 2. , , DATE ON WHICH TYPED DRAFT IS PLACED BEFORE THE DICT ATING MEMBER .. 3. !' # . $ %# / $ %# # & DATE ON WHICH THE APPROVED DRAFT COMES TO THE PS/SR .PS. 4. ''() & * + DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTAT ING MEMBER FOR PRONOUNCEMENT 5. * . %# / # . . %# # + DATE ON WHICH THE ORDER COMES BACK TO THE PS/SR.PS .. 6 * !', + DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. ! !', ' , - ) IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. .% / 0 + DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. * 1'2 / 34 & 5 + DATE ON WHICH ORDER GOES FOR XEROX &ENDORSEMENT 10. 0 6 / + DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 11. * 7 & 0 8 + THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. !) * 9() & 0 9() /#5 . + THE DATE ON WHICH THE FILE GOES TO DESPATCH SECTION FOR DESPATCH OF THE TRIBUNAL ORDER 13. * 9() + DATE OF DESPATCH OF ORDER .