Suresh Gandhi, Hyderabad V. Dy.CIT., Cir-7(1), Hyderabad

ITA 1716/HYD/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2443 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-06-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 12-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV BENJWALDR
• Assessee Lawyers: TEJ PRAKASH TOSHNIWAL
• Section: 143(3); 263; 144

Judgement Text

ITA NO 1716 OF 2013 MEENA JAIN WIFE OF LATE SURESH GANDHI SECUND ERABAD. PAGE 1 OF 7 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI K. NARSIMHA CHARRY, JUDICIAL MEMBER ITA NO.1716/HYD/2013 (ASSESSMENT YEAR: 2003-04) SHRI SURESH GANDHI, PROP: M/S. SHAH MOTILAL SURESH KUMAR, SECUNDERABAD PAN: AEHPG 1277 Q VS DY. COMMISSIONER OF INCOME TAX, CIRCLE 7(1) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI TEJ PRAKASH TOSHNIWAL FOR REVENUE : SHRI RAJEEV BENJWAL,DR O R D E R PER K. NARSIMHA CHARRY, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2003-04 CHALLENGING THE ORDER DATED 11.09.2013 PASSED BY TH E LEARNED CIT (A)-18 MUMBAI IN APPEAL NO.CIT(A)-18/DCIT CIR 7(1)H YD/IT- 40/2010-11. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM HIS BUSINESS. FOR TH E A.Y 2003- 04, HE FILED HIS RETURN OF INCOME ON 11.10.2003 DIS CLOSING A TOTAL INCOME OF RS.7,54,385 AND THE ASSESSMENT U/S 143(3) OF THE I.T. ACT WAS COMPLETED VIDE ORDER DATED 16.03.2006 DETER MINING AN INCOME OF RS.12,89,118. HOWEVER, THE SAID ORDER WAS REVISED BY THE CIT-VI HYDERABAD, VIDE ORDER DATED 31.03.2008 U /S 263 OF THE DATE OF HEARING : 05.06.2017 DAT E OF PRONOUNCEMENT : 09.06.2017 ITA NO 1716 OF 2013 MEENA JAIN WIFE OF LATE SURESH GANDHI SECUND ERABAD. PAGE 2 OF 7 ACT. PURSUANT TO THE ORDER U/S 263 OF THE ACT, IT S EEMS THE AO ISSUED NOTICE DATED 19.12.2008 BUT ACCORDING TO THE ASSESSEE ON 10.01.2009 THE ASSESSEE WAS CALLED TO THE OFFICE OF THE AO TO RECEIVE A NOTICE WITH ANTE DATED ACKNOWLEDGEMENT FO R WHICH THE ASSESSEE REFUSED. THE ASSESSEE CLAIMS THAT THE AO I SSUED NOTICE WITH ANTE DATE OF 19.12.2008 AND SENT IT THROUGH TH E ORDINARY POST AND IT WAS RECEIVED BY THE ASSESSEE ON 2.2.200 9 WHEREAS THE DATE OF HEARING WAS FIXED UNDER SUCH NOTICE AS 29.1 2.2008 WHICH WAS BARRED BY LIMITATION AND NOT VALID UNDER THE LA W. THE PETITIONER CLAIMS TO HAVE BROUGHT TO THIS FACT TO T HE NOTICE OF THE AO BY LETTER DATED 2.2.2009. HOWEVER, THE ORDER U/S 144 R.W.S 236 OF THE ACT CAME TO BE PASSED ON 31.12.2008. 3. AGGRIEVED BY SUCH AN ORDER PASSED U/S 144 R.W.S. 263 OF THE ACT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT (A) AND THE LEARNED CIT (A) BY WAY OF THE IMPUGNED ORDER DISMISSED THE HOLDING THAT THE APPEAL WAS BARRED BY LIMITATION BY 1 YEARS. CHALLENGING THIS IMPUGNED ORDER THE ASSE SSEE IS IN APPEAL BEFORE US STATING THAT THE ORDER OF THE FIRS T APPELLATE AUTHORITY IS CONTRARY TO THE LAW AND AGAINST THE MA TERIAL AVAILABLE ON RECORD. ACCORDING TO THE ASSESSEE, THE IMPUGNED ORDER WAS PASSED WITHOUT PUTTING THE ASSESSEE ON NOTICE AS TO THE ASPECT OF DELAY, WHICH THE LEARNED CIT (A) WAS BANKING UPON A ND WITHOUT AFFORDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE AND ON SUCH ASPECT IS BAD. 4. PLACING ON RECORD THE CHRONOLOGY OF EVENTS, IT W AS SUBMITTED THAT AN ASSESSMENT ORDER WAS ORIGINALLY P ASSED U/S 143(3) OF THE ACT ON 16.03.2006 AND IT WAS REVISED U/S 263 OF THE ITA NO 1716 OF 2013 MEENA JAIN WIFE OF LATE SURESH GANDHI SECUND ERABAD. PAGE 3 OF 7 ACT ON 31.03.2008. ON 11.6.2008, THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE ITAT. A NOTICE DATED 19.12.2008 W AS STATED TO HAVE BEEN ISSUED BY THE AO BUT AS PLACED EVIDENCE O N RECORD, THE NOTICE WAS SENT THROUGH ORDINARY POST ON 30.01.2009 WHICH WAS RECEIVED BY THE ASSESSEE ON 2.2.2009. THE ASSESSEE REPLIED TO THE AO THAT THE NOTICE WAS ISSUED SUBSEQUENTLY BACKDATE D. SINCE THERE IS NO REPLY FROM THE AO FOR THE COMMUNICATION DATED 03.02.2009, THE ASSESSEE FILED MEMO FOR THE WITHDRA WAL OF THE APPEAL BEFORE THE ITAT VIDE LETTER DATED 1.10.2009. AFTER INQUIRY FROM THE DR, ITAT HAS ALLOWED THE WITHDRAWAL ON THE REASON THAT NO CONSEQUENTIAL ORDER WAS PASSED AND SO THE PROCEE DINGS U/S 263 BECAME INFRUCTUOUS. HOWEVER, THE ASSESSEE HAS R ECEIVED AN ORDER DATED 30.01.2008 ON 17.04.2010 AND IMMEDIATEL Y AN APPEAL WAS PREFERRED BEFORE THE LEARNED CIT (A) ON 4.5.2010. IT IS THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSE E THAT ON SEVERAL OCCASIONS THE ASSESSEE ENTERED APPEARANCE B EFORE THE LEARNED CIT (A) BUT ON NO OCCASION THE LEARNED CIT (A) PUT THE ASSESSEE ON NOTICE AS TO THE ALLEGED DELAY ON WHICH THE LEARNED CIT (A) WAS RELYING UPON, BUT TAKING SHELTER THEREU NDER FOR THE FIRST TIME IN THE IMPUGNED ORDER, THE LEARNED CIT (A) DISMISSED THE APPEAL, THOUGH THE ASSESSEE ADDRESSED HIS ARGUM ENT BEFORE THE LEARNED CIT (A) BOTH ON THE POINT OF LIMITATION AND ON MERITS OF THE CASE. THE LEARNED COUNSEL FOR THE ASSESSEE FURT HER SUBMITTED THAT THE RECORD REVEALS THAT THERE IS NO DELAY OCCU RRED IN PREFERRING AN APPEAL BEFORE THE LEARNED CIT (A) AND AS A MATTER OF FACT, BASING ON THE ANTE DATED MATERIAL, THE AO PAS SED AN ORDER DATED 31.12.2008 U/S 144 R.W.S. 263 OF THE ACT. IT WAS FURTHER SUBMITTED THAT IF ONE PERUSE THE ORDER OF THE ASSES SMENT DATED 31.12.2008, IT CAN BE SEEN THAT NO DATE OF HEARING HAS BEEN GIVEN ITA NO 1716 OF 2013 MEENA JAIN WIFE OF LATE SURESH GANDHI SECUND ERABAD. PAGE 4 OF 7 AND THE DATES MENTIONED THERE ARE ALL THE DATES OF HEARING PERTAINING TO AN ORDER PASSED U/S 143(3) DATED 16.0 3.2006. IT WAS THE CONTENTION THAT EVEN THE SO CALLED NOTICE DATED 19.12.2008 WAS ALSO NOT STATED IN THE ORDER WHEREAS THE ASSESS MENT IS STATED TO HAVE BEEN COMPLETED ON 31.12.2008 CONSEQUENT TO THE PROCEEDINGS U/S 263. IT WAS THE CONTENTION THAT THE IMPUGNED ORDER VIOLATES ALL THE PRINCIPLES OF NATURAL JUSTIC E AND ALSO BACKDATED, THEREFORE, VOID IN LAW. PER CONTRA, IT I S THE ARGUMENT OF THE LEARNED DR THAT THERE WAS AN ATTEMPT TO SERVE T HE NOTICE ON THE ASSESSEE, BUT SINCE THE NOTICE WAS RETURNED WIT H AN ENDORSEMENT OF THE NOTICE SERVER TO THE EFFECT THAT THE ASSESSEE VACATED THE PREMISES AND HIS WHEREABOUTS ARE NOT KN OWN, THE MATTER HAD TO BE PROCEEDED TO EX-PARTE AND CONCLUDE D BY WAY OF THE ORDER DATED 31.12.2008. 5. WE HAVE CAREFULLY GONE THROUGH THE RECORD IN THE LIGHT OF THE ARGUMENTS ADDRESSED BEFORE US. IT COULD BE S EEN FROM THE PAPER BOOK VIDE PAGE NOS. 1 TO 5 THAT THE ORIGINAL ASSESSMENT ORDER WAS PASSED ON 16.03.2006 AND VIDE PAGE NO.6 T O 15 THEREOF, IT IS EVIDENT THAT THE ORDER U/S 263 OF THE ACT CAM E TO BE PASSED BY THE LEARNED CIT (A) ON 31.03.2008 AGAINST WHICH THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL ON 11.6.08 AS IS EVIDENT FROM PAGE NOS. 16 TO 18 OF THE PAPER BOOK. IT ISI A LSO WELL BORNE OUT OF RECORD VIDE PAGE NO.21 TO 23 THAT ON 1.10.20 09 THE ASSESSEE FILED A MEMO BEFORE THE TRIBUNAL SEEKING W ITHDRAWAL OF THE APPEAL PREFERRED BY HIM STATING THAT NO ORDER T O GIVE EFFECT TO THE ORDER PASSED BY THE CIT (A) U/S 263 OF THE ACT WAS PASSED BEFORE 31.12.2008, AND AS SUCH ON EXPIRY OF LIMITAT ION, THE PROCEEDINGS IN APPEAL BEFORE THE TRIBUNAL HAVE BECO ME ITA NO 1716 OF 2013 MEENA JAIN WIFE OF LATE SURESH GANDHI SECUND ERABAD. PAGE 5 OF 7 INFRUCTUOUS. THE TRIBUNAL ON THE SAME DAY CONSIDERE D THE PLEA OF THE ASSESSEE AND RECORDED THE SUBMISSIONS OF THE AS SESSEE AND ALSO THE LEARNED DR WHO HAD REPORTED NO OBJECTION F OR PERMITTING THE WITHDRAWAL OF THE APPEAL ON THE GROUND IT HAD B ECOME INFRUCTUOUS ON THE EXPIRY OF THE LIMITATION TO PASS THE ASSESSMENT ORDER PURSUANT TO THE ORDER U/S 263 OF THE ACT. BAS ING ON THIS MATERIAL, WE ARE AGREEING WITH THE STATEMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT BY 1.10.2009 NO ORDER WAS PASSED PURSUANT TO THE ORDER U/S 263 OF THE ACT. 6. IN THIS BACKGROUND, WHEN WE LOOK AT THE ORDER OF THE AO, ALLEGEDLY PURSUANT TO THE REVISIONARY ORDER OF THE LEARNED CIT (A), STRANGELY IT IS DATED 31.12.2008. WE AGREE WIT H THE LEARNED COUNSEL FOR THE ASSESSEE THAT IF THERE IS AN ORDER ON 31.12.2008, CERTAINLY THE DR WOULD HAVE BROUGHT IT TO THE NOTIC E OF THE TRIBUNAL ON 1.10.09 WHEN THE ASSESSEE SUBMITTED THA T THERE WAS NO SUCH ORDER AND BY EFFLUX OF TIME THE APPEAL HAD BECOME INFRUCTUOUS. WE, THEREFORE, FIND THAT THERE IS NOTH ING ON RECORD TO SUGGEST THAT, AS A MATTER OF FACT, THERE WAS AN ORD ER PASSED BY THE AO ON 31.12.2008 U/S 144 R.W.S. 263 OF THE ACT, AND THAT THERE WAS AN ERROR THAT HAD CREPT IN THE PROCEEDINGS OF T HE TRIBUNAL, WHILE ACCEPTING THE PLEA OF THE COUNSEL ON EITHER S IDE THAT THERE WAS NO ORDER PURSUANT TO THE REVISIONARY ORDER OF T HE CIT (A) IN THIS MATTER. NOT ONLY THAT THE EVIDENCE PLACED ON R ECORD INDICATES THAT THE NOTICE DATED 19.12.2008 WAS NOT ISSUED IMM EDIATELY TO THE ASSESSEE AND IT WAS RECEIVED ONLY ON 2.2.2009, MUCH LATER TO THE SO CALLED DATE OF ORDER. EVEN THE ORDER DOES NO T INDICATE THAT AN OPPORTUNITY HAS BEEN ISSUED ON 19.12.2008 AND TH E ORDER INDICATES ONLY THOSE DATES ON WHICH THE ASSESSEE AP PEARS BEFORE ITA NO 1716 OF 2013 MEENA JAIN WIFE OF LATE SURESH GANDHI SECUND ERABAD. PAGE 6 OF 7 THE AO IN THE FIRST ASSESSMENT PROCEEDINGS. SERVICE OF THE IMPUGNED ORDER AS LATE AS 17.04.2010 ALSO INDICATES THAT THE ORDER COULD NOT HAVE BEEN PASSED BEFORE THE ORDER O F THE ITAT ALLOWING THE WITHDRAWAL OF THE APPEAL. ANOTHER INTE RESTING ASPECT TO BE NOTED IS THAT THE ORDER OF THE ITAT WAS SERVE D ON THE ASSESSEE WITH THE ADDRESS AT BEGUM BAZAR, BUT THE REVISED ASSESSMENT ORDER PLACED ON RECORD AT PAGES 24 TO 28 OF THE PAPER BOOK INDICATES THE ADDRESS AS LIC COLONY, SECUNDER ABAD. IT IS ALSO NOTICED THAT THE ORDER WAS NOT SENT BY POST AS IS THE PRACTICE IN THE DEPARTMENT, BUT THROUGH PROCESS SERVER WHICH IS UNUSUAL. ONLY HIS REPORT WAS RELIED THAT ASSESSEE WAS NOT AV AILABLE IN THE GIVEN ADDRESS. FOR THESE REASONS, WE ARE OF THE CON SIDERED OPINION THAT THE SUBMISSIONS OF THE ASSESSEE THAT T HERE WAS NO ORDER PASSED WITHIN THE DUE DATE, PURSUANT TO THE R EVISIONARY ORDER U/S 263 OF THE ACT, GO UNCHALLENGED AND UNIMP EACHABLE, AND THE OBSERVATIONS OF THE LEARNED CIT (A) IN THE IMPUGNED ORDER ARE UNSUBSTANTIATED. WE THEREFORE, HOLD THAT THE IM PUGNED ORDERS OF THE AUTHORITIES HAVE NO LEGS TO STAND AND ARE LI ABLE TO BE QUASHED. WE DO SO ACCORDINGLY. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JUNE, 2017. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (K.NARSIMHA CHARRY) JUDICIAL MEMBER HYDERABAD, DATED 9 TH JUNE, 2017. VINODAN/SPS ITA NO 1716 OF 2013 MEENA JAIN WIFE OF LATE SURESH GANDHI SECUND ERABAD. PAGE 7 OF 7 COPY TO: 1 SHRI TEJ PRAKASH THSONIWAL, ADVOCATE, 4-1-6/B/4, RAMKOTE, HYDERABAD 500095 2 DY. COMMISSIONER OF INCOME TAX, CIRCLE 7(1) HYDER ABAD 3 CIT (A)-18 ROOM NO.20, 3 RD FLOOR, B-WING, MITTAL COURT, NARIMAN POINT MUMBAI 400021 4 CIT 5/6 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER