S.Karunakar Reddy, Sec'bad, Hyderabad V. ITO, Ward-10(2), Hyd, Hyderabad

ITA 176/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2713 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 22-06-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 17-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: A V RAGHURAM
• Section: 148; 144

Judgement Text

ITA NO 176 OF 201 6 S KARUNAKAR REDDY SECUNDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A (SMC) BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.176/HYD/2016 (ASSESSMENT YEAR: 2004-05) SRI S. KARUNAKAR REDDY SECUNDERABAD PAN: AIRPS 8553 R VS INCOME TAX OFFICER WARD 10 (2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI A.V. RAGHURAM FOR REVENUE : SMT. SUMAN MALIK O R D E R THIS IS ASSESSEES APPEAL FOR THE A.Y 2004-05. IN T HIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF T HE CIT (A)-9, HYDERABAD DATED 20.12.2015 IN NOT CONDONING THE DEL AY OF 301 DAYS IN FILING OF THE APPEAL BEFORE THE CIT (A), EV EN THOUGH THE ASSESSEE HAS A STRONG CASE ON MERIT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A N INDIVIDUAL, FILED HIS RETURN OF INCOME FOR THE A.Y 2 004-05 ON 1.11.2004 DECLARING TOTAL INCOME OF RS.2,26,650. TH E AO OBSERVED THAT THE ASSESSEES A/C WAS CREDITED WITH RS.15.00 LAKHS WHICH WAS NOT OFFERED TO TAX WHEREAS THE TDS OF RS.76,875 WAS CLAIMED IN THE RETURN. THEREFORE, A NOTICE U/S 148 OF THE A CT WAS ISSUED TO THE ASSESSEE. SINCE THERE WAS NO RESPONSE FROM THE ASSESSEE TO DATE OF HEARING : 14.08.2017 DATE OF PRONOUNCEMENT : 14.08.2017 ITA NO 176 OF 201 6 S KARUNAKAR REDDY SECUNDERABAD PAGE 2 OF 4 THE STATUTORY NOTICES ISSUED TO HIM TO PRODUCE THE BOOKS OF ACCOUNT AND VOUCHERS, A FINAL SHOW-CAUSE LETTER DAT ED 26.09.2007 WAS ISSUED TO THE ASSESSEE. SINCE THE ASSESSEE FAIL ED TO COMPLY WITH THE NOTICES AND FAILED TO APPEAR BEFORE THE AO , THE AO COMPLETED THE ASSESSMENT U/S 144 OF THE ACT BY TREA TING 50% OF THE RECEIPT OF RS.15.00 LAKHS AS INCOME OF THE ASSE SSEE AND COMPLETED THE ASSESSMENT. THEREAFTER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) WITH A DELAY OF 301 DAYS. THE ASSESSEE FILED AN AFFIDAVIT STATING THAT HE HAD HANDED OVER THE ASSESSMENT ORDER TO ONE OF HIS EMPLOYEES WHO MISPLACED THE SAM E AND LATER ON LEFT THE JOB AND THE ASSESSMENT ORDER WAS RECOVE RED BY HIS SUBORDINATE STAFF SUBSEQUENTLY AND THEREFORE, IMMED IATELY AN APPEAL HAS BEEN FILED. THIS APPLICATION FOR CONDONA TION OF DELAY HAS BEEN CONSIDERED BY THE CIT (A) AND THE APPEAL O F THE ASSESSEE WAS ACCORDINGLY REJECTED. THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE, WHILE REIT ERATING THE REASONS MENTIONED IN THE AFFIDAVIT FOR CONDONAT ION OF DELAY, ALSO DREW OUR ATTENTION TO THE RETURN OF INCOME FIL ED BY THE ASSESSEE WHEREIN THERE WAS A NOTE TO THE COMPUTATIO N OF INCOME STATING THAT THE ASSESSEE IS FOLLOWING THE ACCOUNTING SYSTEM ON RECEIPT BASIS AND PAYMENT IN RESPECT OF TDS ISSUED FOR RS.76,785 HAS NOT BEEN RECEIVED BY THE ASSESSEE DURING THE PREV IOUS YEAR 2003-04. HOWEVER, SINCE THE TDS IS BEING CLAIMED, THE SAME HAS BEEN ACCOUNTED IN THE RECEIPTS . HE HAS ALSO DRAWN OUR ATTENTION TO THE LEDGER A/C OF THE ASSESSEE WHICH IS PLACED A T PAGE 15 OF THE PAPER BOOK TO DEMONSTRATE THAT HE HAS RECEIVED THE CONTRACT AMOUNT OF RS.15.00 LAKHS EXCLUDING THE TDS ON 22.04 .2014 AND ITA NO 176 OF 201 6 S KARUNAKAR REDDY SECUNDERABAD PAGE 3 OF 4 THAT THE SAME HAS BEEN OFFERED TO TAX IN THE NEXT A .Y. HE HAS ALSO PLACED RELIANCE UPON THE TDS FORM TO DRIVE HIS POIN T THAT THE SAID AMOUNT HAS BEEN RECEIVED BY HIM IN THE NEXT A.Y. THU S, ACCORDING TO HIM, THE ASSESSEE HAS A STRONG CASE ON MERIT. HE PLACED RELIANCE UPON THE DECISION OF THE HON'BLE SU PREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST & KATIJI & ORS REPORTED IN (1987) 167 ITR 0471 AND ALSO THE DECISI ON OF THE HON'BLE JURISDICTIONAL HIGH COURT AT HYDERABAD IN T HE CASE OF SURYA GENERAL TRADERS VS. COMMERCIAL TAX OFFICER & ORS IN WRIT PETITION NO.6143 OF 1997 DATED 31.3.1997 WHEREIN IT WAS HELD THAT WHERE AN ASSESSEE HAS A CASE ON MERIT, THE DEL AY SHOULD BE CONDONED. 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE APPEARS TO HAV E A STRONG CASE ON MERIT. THE ASSESSEE HAS FILED THE RELEVANT DOCUM ENTS BEFORE US TO DEMONSTRATE THAT HE HAS NOT RECEIVED THE PAYMENT FOR WHICH THE TDS HAS BEEN MADE DURING THE RELEVANT PREVIOUS YEAR AND THAT THE PAYMENT HAS BEEN RECEIVED IN THE SUBSEQUEN T YEAR AND THE ASSESSEE HAS ACCORDINGLY OFFERED IT TO TAX. HOW EVER, ALL THESE DOCUMENTS NEED VERIFICATION BY THE AO. THE HON'BLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS . MST & KATIJI & ORS (CITED SUPRA) HAS TAKEN NOTE OF THE FACT THAT T HE COURTS ARE TO APPLY THE LAW IN A MEANINGFUL MANNER WHICH SUB SERV ES THE ENDS OF JUSTICE AND SUFFICIENT CAUSE FOR THE PURPOSE OF CONDONATION OF ITA NO 176 OF 201 6 S KARUNAKAR REDDY SECUNDERABAD PAGE 4 OF 4 DELAY SHOULD BE INTERPRETED WITH A VIEW TO DO EVEN- HANDED JUSTICE ON MERITS IN PREFERENCE TO APPROACH WHICH SCUTTLES A DECISION ON MERIT. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HON'B LE JURISDICTIONAL HIGH COURT IN THE CASE OF SURYA GENE RAL TRADERS & ORS. (CITED SUPRA). IN VIEW OF THE SAME, WE DEEM IT FIT AND PROPER TO CONDONE THE DELAY OF 301 DAYS IN FILING OF THE A PPEAL BEFORE THE CIT (A) SUBJECT TO THE ASSESSEE PAYING A COST OF RS .2000/- TO THE DEPARTMENT AND REMAND THE MATTER BACK TO THE FILE O F THE AO FOR VERIFICATION OF THE ASSESSEES CONTENTION AND TO CO MPLETE THE ASSESSMENT IN ACCORDANCE WITH THE LAW AFTER GIVING THE ASSESSEE DUE OPPORTUNITY OF HEARING. 6. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST, 2017. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 14 TH AUGUST, 2017. VINODAN/SPS COPY TO: 1 S/SRI K.VASANT KUMAR, AV RAGHU RAM, P VINOD, M. N EELIMA DEVI, ADVOCATES, FLAT NO.610 6 TH FLOOR, BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500001 2 INCOME TAX OFFICER WARD 10(2) HYDERABAD 3 CIT (A)-9 HYDERABAD 4 PR. CIT 7 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER