ACIT, CHENNAI V. Dr.L.Srinivasan, CHENNAI

ITA 1630/CHNY/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9661 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 07-08-2013
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH JCITD R
• Assessee Lawyers: N DEVANATHAN
• Keywords: Question of law
• Section: 143(3); 153A; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NOS.1626 TO 1631 /MDS./2013 ( / ASSESSMENT YEAR :2003-04 TO 2008-09) & C.O NOS.143 TO 148/MDS./2014 ASSISTANT COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-IV(3)(I/C), 46,NUNGAMBAKKAM HIGH ROAD, CHENNAI. VS. SHRI DR.L.SRINIVASAN , NO.52, MOOSA STREET, T.NAGAR,CHENNAI 600 017. PAN AAHPS 9160 L ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT / CROSS OBJECTOR ) / APPELLANT BY : MR.A.V.SREEKANTH,JCIT,D.R / RESPONDENT BY : MR.N.DEVANATHAN,ADVOCATE / DATE OF HEARING : 31.03.2016 /DATE OF PRONOUNCEMENT : 13 .04.2016 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE SIX APPEALS AND SIX CROSS OBJECTIONS FILED BY THE REVENUE AND THE ASSESSEE ARE DIRECTED AGAINST THE C OMMON ORDER ITA NOS.1626 TO 1631/MDS./13 CO NOS.143 TO 148/MDS./14 DR.L.SRINIVASAN 2 OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, CHE NNAI DATED 25.02.2013 PERTAINING TO THE ASSESSMENT YEARS 2003 -04 TO 2008-09. SINCE ISSUES INVOLVED IN ALL THESE REVENUES APPEAL S & CROSS OBJECTIONS ARE COMMON IN NATURE, THESE APPEALS & C. O.S ARE CLUBBED TOGETHER, HEARD TOGETHER, DISPOSED OFF BY THIS COMM ON ORDER FOR THE SAKE OF CONVENIENCE. 2.1 THE REVENUE HAS RAISED THE FOLLOWING COMMON GR OUNDS IN ITS APPEALS FOR ADJUDICATION. 1. THE ORDER OF THE LEARNED CIT(A) IN HOLDING THAT THE ORDERS U/S. 154 PASSED ON 21/06/2010 TO INCLUDE THE RETURNED IN COME WHICH WAS OMITTED ASSESSED IN THE ORIGINAL ASSESSME NT COMPLETED ON 24/12/2009 ARE ERRONEOUS, TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT THE RETURNED INCOME WHICH WAS OMITTED TO BE INCLUDED IN THE ORIG INAL ASSESSMENT IS A MISTAKE APPARENT FROM RECORD AND TH E PROVISIONS OF SECTION 154 OF THE INCOME TAX ACT IS CLEARLY APPLICABLE TO THIS YEAR. 3. THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THAT THE INCOME ASSESSED U/S. 153A WAS THE SUPPRESSED PROFESSIONAL RECEIPT OF THE ASSESSEE AND THE INCOME RETURNED WHICH REPRE SENTS ITA NOS.1626 TO 1631/MDS./13 CO NOS.143 TO 148/MDS./14 DR.L.SRINIVASAN 3 DISCLOSED INCOME HAS NOT BEEN TAKEN INTO CONSIDERAT ION AND THIS OMISSION IS A MISTAKE APPARENT FROM RECORDS, R ECTIFIABLE U/S.154 OF THE ACT. 4. THE LEARNED CIT (A) HAS FAILED TO OBSERVE THAT I T HAS NOT BEEN BROUGHT OUT EITHER BEFORE THE REMAND PROCEEDINGS OR BEFORE THE LEARNED CIT(A) THAT THE ORIGINAL INCOME RETURNE D DO NOT INCLUDE RECEIPTS OTHER THAN PROFITS FROM KIDNEY OPE RATIONS. 5. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, THE ORDERS OF THE CIT(A) IS SET ASIDE A ND THAT OF THE ASSESSING OFFICER RESTORED. 2.2 THE ASSESSEE HAS RAISED GROUNDS IN ITS C.O IN SUPPORT OF THE ORDER OF THE LD.CIT(A). IN ADDITION TO THIS, IT WA S RAISED THAT THE ISSUE OF ASSUMPTION OF JURISDICTION U/S.153C OF THE ACT I S A SUBJECT MATTER OF DISPUTE AND THE SAME HAS BEEN THE SUBJECT MATTER OF REMAND BEFORE THE LD.CIT(A) AND HENCE, THE AO LACKS JURISDICTION AND FRAMED ASSESSMENT OR RECTIFICATION PROCEEDINGS ALSO, WHIC H IS BAD IN LAW. 3. IN ALL THESE CASES, THE ASSESSMENT WAS COMPLET ED U/S.153C R.W.S.143(3) OF THE ACT. LATER, THE AO PASSED RECT IFICATION ORDERS IN THESE CASES ON THE REASON THAT WHILE COMPUTING THE INCOME OF ASSESSEE ON THESE ASSESSMENT YEARS, THE AO NOT CONS IDERED THE ITA NOS.1626 TO 1631/MDS./13 CO NOS.143 TO 148/MDS./14 DR.L.SRINIVASAN 4 ADMITTED INCOME. HENCE, THE ORIGINAL ASSESSMENT OR DER WAS RECTIFIED U/S.154 OF THE ACT. ON APPEAL, LD.CIT(A) DECIDED T HE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING THAT AO CANNOT RECTIFY THE ASSESSMENT ORDER U/S.154 OF THE ACT ON THE FOLLOWING REASONS:- 1. THE ISSUE OF WHETHER INCOME RETURNED IN THE ORI GINAL RETURN, HAS BEEN CONSIDERED IN RETURNS FILED IN RESPONSE TO PROCEEDINGS U/S.153A IS NOT APPARENT BECAUSE UNLESS DEEP SCRUTINY IS DONE, THIS FACT CANNOT BE ASCERTAINED, AND HENCE PROCEEDINGS U/S.154 WILL NOT APPLY. 2. THE REASONING ADOPTED IN SUPPORT OF THE ORDER U /S.154, EVEN IN THE REMAND REPORT IS VAGUE. NO APPARENT ERROR HA S BEEN POINTED OUT EVEN IN THE REMAND REPORT. 3. THE APPEAL ORDERS ON THE ASSESSMENTS DONE U/S.1 43(3) R.W.S.153A R.W.S.153C HAVE DETERMINED THE TOTAL INC OMES RELATING TO EACH OF THESE ASSESSMENT YEARS. THEREFO RE,, THESE ORDERS U/S.154, PURPORTEDLY TO DEAL WITH THE OMISSION OF INCOMES DECLARED IN THE ORIGINAL RETURN, BECOME INFRUCTUOUS. AGAINST THIS THE REVENUE IS IN APPEAL BEFORE US. ITA NOS.1626 TO 1631/MDS./13 CO NOS.143 TO 148/MDS./14 DR.L.SRINIVASAN 5 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ADMITTEDLY IN THIS CASE, THE DEPARTMENT CAM E ON APPEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER OF THE CIT(A ) IN ASSESSEE'S OWN CASE IN ITA NOS.2012 TO 2017/MDS./2012 VIDE ORD ER DATED 18.04.2013 FOR ASSESSMENT YEARS 2003-04 TO 2008-09 WHICH WAS EMANATED FROM THE ASSESSMENT ORDERS PASSED U/S.153C R.W.S.143(3) OF THE ACT. AT THAT TIME ASSESSEE ALSO FILED THE C. O. NO.49 TO 54/MDS./2012. THE ASSESSEE AT THAT TIME RAISED THE GROUNDS IN ITS C.O BEFORE THIS TRIBUNAL IN THE FORM OF ADDITIONAL GROUNDS, VALIDITY OF THE ASSESSMENTS FRAMED U/S.153C R.W.S 143(3) OF THE ACT. THE TRIBUNAL ADJUDICATED THAT GROUND IN ASSESSEE'S OWN CASE AS FOLLOWS:- 25. COMING TO ONE OF THE GROUNDS IN THE CROSS OBJECTIONS TAKEN BY DR.L.SRINIVASAN WHICH ASSAILS T HE VALIDITY OF THE PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT, WE DO FIND THAT THE ASSESSEE HAD FILED A SUPPLEMENTARY WRITTEN SUBMISSION BEFORE THE CIT(A) IN WHICH THE FOLLOWING APPEARS: WE WISH TO RAISE AN ADDITIONAL GROUND IN THE APPEA L FILED AGAINST THE ASSESSMENT COMPLETED UNDER SECTION 143( 3) R.W.S.153A/153C THAT THE A.O. HAS NOT RECORDED HIS SATISFACTION IN THE APPELLANTS CASE BEFORE INITIAT ING ITA NOS.1626 TO 1631/MDS./13 CO NOS.143 TO 148/MDS./14 DR.L.SRINIVASAN 6 PROCEEDINGS UNDER SECTION 143(3) R.W.S.153A/153C F OR THE ASSESSMENT YEAR 2003-04. THE RECORDING OF SATISFAC TION BY THE ASSESSING OFFICER IS A SINE QUA NON FOR INIT IATING PROCEEDINGS UNDER SECTION 153C OF THE ACT. LD. CIT(A) HAS NOT DEALT WITH THIS ISSUE AT ALL. IN OUR OPINION, CIT(A) WAS DUTY BOUND TO DISPOSE OF SUCH ADDITIONAL GROUND RAISED BY THE ASSESSEE SINCE IT R AISED A QUESTION OF LAW, WHICH WENT TO THE ROOT OF THE MATT ER. WE THEREFORE REMIT THIS ISSUE BACK TO THE FILE OF THE CIT(A) FOR CONSIDERATION AND DISPOSAL IN ACCORDANCE WITH LAW. CROSS OBJECTION FILED BY ASSESSEE DR.L.SRINIVASAN, IS THUS ALLOWED FOR STATISTICAL PURPOSES. 26. VIS--VIS THE CLAIM OF THE LD. SENIOR COUNSEL THAT NET WEALTH METHOD SHOULD BE ADOPTED FOR ASCERTAINING TH E INCOME, WE ARE UNABLE TO ACCEPT SINCE BOTH THE ASSESSEES BEFORE US WERE NOT SUBJECT TO SEARCH, AN D THERE WERE VALID REASON FOR CIT(A) TO DIRECT SUCH M ETHOD IN THE CASE OF DR.P.RAVICHANDRAN, WHO ALONE WAS SUBJECTED TO SEARCH, AND IN WHOSE CASE INVESTMENTS MADE WERE ALL AVAILABLE ON RECORD. AS SUCH, AS ON NOW THE ISSUE OF VALIDITY OF ASSESSM ENT ORDER IS PENDING BEFORE THE LD.CIT(A), WHICH IS RELATING TO THE MAIN ORIGINAL ITA NOS.1626 TO 1631/MDS./13 CO NOS.143 TO 148/MDS./14 DR.L.SRINIVASAN 7 ORDER OF THE ASSESSMENT ORDER PASSED U/S.153C R.W.S .143(3) OF THE ACT. HENCE, AT THIS STAGE, IT IS NOT APPROPRIATE T O DECIDE THE ISSUE RELATING TO RECTIFICATION PROCEEDINGS U/S.154 OF TH E ACT FOR ALL THESE ASSESSMENT YEARS. HENCE, IN THE INTEREST OF JUSTIC E, WE ARE INCLINED TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF THE LD .CIT(A) TO DECIDE THE SAME AFTER THE OUTCOME OF THE REMITTED ISSUE BEFORE HIM BY THE TRIBUNAL FOR THESE ASSESSMENT YEARS. 5. IN THE RESULT, ALL THE APPEALS OF THE REVENUE FO R ASSESSMENT YEARS 2003-04 TO 2008-09 ARE PARTLY ALLOWED FOR STA TISTICAL PURPOSES AND CROSS OBJECTIONS BY THE ASSESSEE FOR ASSESSMENT YEARS 2003-04 TO 2008-09 ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 13 TH OF APRIL, 2016 AT CHENNAI. SD/- SD/- ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) ( ( () * + ) ) ! CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 13 TH APRIL,2016 K S SUNDARAM. ITA NOS.1626 TO 1631/MDS./13 CO NOS.143 TO 148/MDS./14 DR.L.SRINIVASAN 8 -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,!' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4&,6 /GF