Hemant Kumar Patel, HYDERABAD V. Asst.Commissioner of Income Tax, Circle-7(1), Hyderabad

ITA 157/Hyd/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7040 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Assessment Year: 2012-2013
• Appeal Filed On: 05-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: AJAY GANDHI
• Keywords: Search and seizure; Principle of natural justice; Reasonable cause; Set aside
• Section: 142(1)

Judgement Text

ITA NOS 156 AND 157 OF 2019 HEMANT KUMAR PATEL HYDE RABAD. PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 156 & 157/HYD/2019 (ASSESSMENT YEARS: 2011-12 & 2012-13) SHRI HEMANT KUMAT PATEL HYDERABAD PAN: AAQPP7237E VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 7(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI AJAY GANDHI FOR REVENUE : SHRI Y.V.S.T. SAI, CIT(DR) O R D E R PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE ASSESSEES APPEALS FOR THE A.YS 2011-12 & 2012-13 AGAINST THE ORDER OF THE CIT (A)-3, HYDERAB AD, DATED 18.12.2018 AND 26.12.2018 RESPECTIVELY. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A MEDICAL PRACTITIONER. AS PER THE I NFORMATION RECEIVED BY THE DEPARTMENT, THE ASSESSEE HAS RECEIV ED AN AMOUNT OF RS.20 LAKHS ON 1-3-2011 DURING THE FINANCIAL YEA R 2010-11 AND RS.14.25 LAKHS ON 30.04.2011 DURING THE FINANCIAL Y EAR 2011-12 AS DONATION AND CAPITATION FEES IN CASH OVER AND AB OVE THE REGULAR FEE PRESCRIBED BY THE GOVT. FOR ADMISSION O F HIS SON, SHRI ANUJ KUMAR PATEL, INTO CHALIMEDA ANANDA RAO INSTITU TE OF DATE OF HEARING : 25.07.2019 DATE OF PRONOUNCEMENT : 31.07.2019 ITA NOS 156 AND 157 OF 2019 HEMANT KUMAR PATEL HYDE RABAD. PAGE 2 OF 5 MEDICAL SCIENCES RUN BY ARIHANT EDUCATIONAL SOCIETY . THIS WAS BROUGHT TO THE NOTICE OF THE DY. CIT, CENTRAL CIRCL E 2(2) HYDERABAD CONSEQUENT TO A SEARCH AND SEIZURE OPERAT ION CONDUCTED IN THE CASE OF M/S. ARIHANT EDUCATIONAL S OCIETY ON 25.7.2013. THEREFORE, A NOTICE U/S 153C WAS ISSUED TO THE ASSESSEE ON 22.2.2017 AND FURTHER NOTICES U/S 143(2 ) AND 142(1) WERE ALSO ISSUED TO THE ASSESSEE. SUBSEQUENTLY, A S HOW-CAUSE NOTICE WAS ISSUED ON 20.12.2017 TO THE ASSESSEE TO PRODUCE THE REQUISITE MATERIAL ESSENTIAL FOR COMPLETING THE ASS ESSMENT. IN RESPONSE TO THE SAME, THE ASSESSEE FILED A REPLY DE NYING ANY PAYMENT IN CASH OVER AND ABOVE THE REGULAR FEE PRES CRIBED BY THE GOVT. TO THE ARIHANT EDUCATIONAL SOCIETY AND ALSO R EQUESTED THE AO TO GIVE HIM AN OPPORTUNITY TO EXAMINE THE EVIDEN CE MENTIONED IN THE SHOW-CAUSE NOTICE ISSUED BY THE AO. THE ASSE SSEE REQUESTED THAT THE SAME MAY BE PROVIDED TO HIM ON O R BEFORE 25.12.2017 AS HE HAD TO PROCEED TO A CONFERENCE/SEM INAR OUT OF HYDERABAD. THE AO HOWEVER, OBSERVED THAT THE ASSESS EE HAD DECIDED TO PROCEED TO OUT STATION PURPOSELY AND THA T THE CONFERENCE IS A PLOY TO EVADE THE PROCEEDING, EVEN THOUGH THE INTERVENING DAYS HAPPENED TO BE HOLIDAYS. HE THEREF ORE, HELD THAT THE ASSESSEE HAS NOT UTILIZED THE OPPORTUNITY GIVEN TO HIM AND ON THE BASIS OF THE STATEMENTS OF PARENTS OF TWO OF TH E STUDENTS WHO HAVE ADMITTED THEIR CHILDREN TO THE ARIHANT EDUCATI ONAL SOCIETY, HE HELD THAT THE ASSESSEE HAS ALSO PAID A SUM OF RS .20.00 LAKHS IN THE FINANCIAL YEAR RELEVANT TO THE A.Y 2011-12 A ND RS.14.25 LAKHS IN THE FINANCIAL YEAR RELEVANT TO THE A.Y 201 2-13 AND BROUGHT IT TO TAX AS UNEXPLAINED PAYMENT. ITA NOS 156 AND 157 OF 2019 HEMANT KUMAR PATEL HYDE RABAD. PAGE 3 OF 5 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEF ORE THE CIT (A) RAISING A GROUND ALSO AND THAT HE NO OPPORT UNITY WAS PROVIDED TO HIM AND ALSO THAT HE WAS NOT PROVIDED W ITH THE COPIES OF THE EVIDENCE OF SUCH SEIZED MATERIAL, SWORN STAT EMENTS, DECLARATION MADE BY ARIHANT EDUCATIONAL SOCIETY ETC ., FOR REBUTTAL. THE CIT (A) HOWEVER, CONFIRMED THE ORDER OF THE AO WITHOUT DECIDING THE GROUNDS RAISED BY THE ASSESSEE AGAINST NON- PROVIDING OF THE COPY OF THE SEIZED MATERIAL TO HIM . THE CIT (A) ONLY CONSIDERED THAT THE ISSUE HAS ALREADY BEEN SET TLED BEFORE THE SETTLEMENT COMMISSION WHEREAS THE ARIHANT EDUCATION AL SOCIETY HAS ACCEPTED TO HAVE RECEIVED THE DONATION IN CASH. AGGRIEVED BY THE ORDER OF THE CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE CIT (A) IS IN GROSS VIOLATION OF THE PROVISIONS OF LAW AND HENCE IS BAD IN LAW. 2. THE CIT (A) ERRED IN UPHOLDING THE ORDER OF THE AO WHICH IS IN GROSS VIOLATION OF PRINCIPLES OF NATURA L JUSTICE AND HENCE BAD IN LAW. 3. THE CIT (A) HAS ERRED IN UPHOLDING THE ALLEGATIO N OF THE AO THAT I MADE A PAYMENT OF RS.14.25 LAKHS OVER AND ABOVE THE REGULAR FEE PRESCRIBED BY THE GOVT. F OR SECURING THE ADMISSION OF MY SON INTO THE COLLEGE R UN BY THE ARIHANT EDUCATIONAL SOCIETY. 4. ANY OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING. 4. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE REITE RATING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, HAS DRAWN OUR ATTENTION TO THE REPLY GIVEN BY THE ASSESSEE TO THE AOS NOTICE DATED 20.12.2017 BOTH BY EMAIL AS WELL AS BY PAPER MAIL. HE SUBMITTED THAT THE ASSESSEE WAS NEVER PROVIDED WITH THE DETAILS ITA NOS 156 AND 157 OF 2019 HEMANT KUMAR PATEL HYDE RABAD. PAGE 4 OF 5 AND EVEN THE NOTICES ISSUED EARLIER ARE DEVOID OF A NY DETAILS AND THEREFORE, THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE IN SUPPORTING AND SUBSTANTIATING HIS CASE WITH NECESSA RY EVIDENCE. 5. THE LEARNED DR, HOWEVER, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ADDITIONS ARE SUPPORTED BY ADMISSION MADE BY THE ARIHANT EDUCATIONAL SOCIET Y AND ALSO SIMILARLY PLACED PARENTS OF TWO OTHER STUDENTS. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAS RECEIVED T HE NOTICE DATED 22.12.2017 FOR APPEARING BEFORE THE AO ON 27.12.201 7, WHEREAS THE ASSESSEE BEING A MEDICAL PRACTITIONER WAS ATTEN DING A MEDICAL CONFERENCE FROM 25.12.2017. THEREFORE, THE ASSESSEE VIDE LETTER DATED 22.12.2017, HAD REQUESTED THE AO TO PROVIDE T HE NECESSARY EVIDENCE AND THE STATEMENTS AND ALSO GIVE AN OPPORT UNITY FOR CROSS EXAMINING THE DIRECTOR OF THE ARIHANT EDUCATI ONAL SOCIETY. BUT, WE FIND THAT NEITHER THE AO NOR THE CIT (A) HA VE FURNISHED THE REQUIRED INFORMATION TO THE ASSESSEE, THUS VIOL ATING THE PRINCIPLES OF NATURAL JUSTICE. THEREFORE, WE DEEM I T FIT AND PROPER TO SET ASIDE THE ASSESSMENT ORDER AND DIRECT THE AO TO PROVIDE ALL THE REQUIRED DETAILS TO THE ASSESSEE AND ALSO PROVI DE HIM AN OPPORTUNITY TO CROSS EXAMINE THE DIRECTOR OF THE AR IHANT EDUCATIONAL SOCIETY AND ANY OTHER PARTIES WHOSE STA TEMENTS ARE RELIED UPON BY THE AO IF THE ASSESSEE SO REQUESTS. NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GIVEN A FAIR OPP ORTUNITY OF HEARING. ITA NOS 156 AND 157 OF 2019 HEMANT KUMAR PATEL HYDE RABAD. PAGE 5 OF 5 7. IN THE RESULT, ASSESSEES APPEALS FOR BOTH THE A .YS ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2019. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 31 ST JULY, 2019. VINODAN/SPS COPY TO: 1 SHRI HEMANT KUMAT PATEL, 14-2-332/1/2 VAISHNO GYA N BAGH COLONY, HYDERABAD 500012 2 ASSTT. CIT, CIRCLE 7(1), 8 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD 500084 3 CIT (A)-3 HYDERABAD 4 PR. CIT 3 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER