P Janaki Rama Rao, Hyderabad V. ACIT, Central Circle-3, Hyderabad

ITA 1772/HYD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2472 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 11-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 24-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIVEDITA BISWAS
• Assessee Lawyers: S RAMA RAO
• Keywords: Unexplained investment; Revision of order; Search and seizure; Reasonable cause; Assessment record; Condonation of delay; Documents seized
• Section: 143(3); 263; 132; 144

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 1772/HYD/2014 ASSESSMENT YEAR: 2007-08 & 89/HYD/2015 ASSESSMENT YEAR: 2007-08 SHRI P. JANAKI RAMA RAO HYDERABAD. PAN ACAPG3338H VS. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S. RAMA RAO REVENUE BY : SMT NIVEDITA BISWAS DATE OF HEARING : 04-09-2017 DATE OF PRONOUNCEMENT : 27-10-2017 ORDER PER P. MADHAVI DEVI, J.M.: BOTH OF THESE APPEALS ARE FILED BY ASSESSEE FOR THE A.Y. 2007-08. APPEAL ITA IN NO. 1772/HYD/2015 IS AGAINST THE ORDER OF THE CIT(CENTRAL) U/S 263 OF THE IT ACT DATED 26-03- 2014, WHILE ITA NO. 89/HYD/2015 IS AGAINST THE ORDER OF THE CIT(A)-VII, DATED 30-09-2014 AGAINST THE ASSESSMENT ORDER PASSED U/S 144 R.W.S 153C OF THE IT ACT. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT WAS CARRIED OUT IN THE CASE 2 ITA NO. 1772/HYD2014 & 89/HYD/2015 SHRI P. JANAKI RAM RAO, HYDERABAD. OF M/S MBS JEWELLRY PRIVATE LIMITED AND ITS GROUP ON 11- 03-2010, DURING THE COURSE OF WHICH, CERTAIN DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND AND SEIZED. CONSEQUENTLY, A NOTICE U/S 153C OF THE IT ACT WAS ISSUED TO THE ASSESSEE ON 11-11-2011. IN RESPONSE THERE TO THE ASSESSEE, ALONG WITH ONE SHRI T. GOPICHAND, FCA, AR OF THE ASSESSEE, APPEARED BEFORE AO ON 08-12-2011 AND REQUESTED TIME FOR FILING THE INFORMATION CALLED FOR. HOWEVER, THE ASSESSEE NEITHER FURNISHED THE RETURN OF INCOME NOR THE DETAILS CALLED FOR. THE A.O, THEREFORE, COMPLETED THE ASSESSMENT U/S 144 R.W.S 153C OF THE IT ACT. DURING THE SEARCH PROCEEDINGS, THE A.O OBSERVED THAT DURING THE F.Y 2006-07, THE ASSESSEE ENTERED INTO AN AGREEMENT FOR PURCHASE OF LAND SITUATED AT BODUPPAL, RAJENDRA MANDAL, RR DISTRICT AND THAT FOR THIS PURPOSE, HE HAS MADE PAYMENT OF RS. 47,50,000/-. THEREFORE, A.O MADE ADDITION OF RS. 47,50,000/- AS UNEXPLAINED INVESTMENT AND BROUGHT IT TO TAX. 3. THEREAFTER, THE CIT, PERUSED THE ASSESSMENT RECORD AND INVOKED THE PROVISIONS OF SEC. 263 OF THE IT ACT, BY OBSERVING THAT FROM THE DOCUMENTS SEIZED DURING THE SEARCH AND SEIZURE OPERATION IN THE CASE OF MBS GROUP, THE 3 ITA NO. 1772/HYD2014 & 89/HYD/2015 SHRI P. JANAKI RAM RAO, HYDERABAD. ASSESSEE IS SUPPOSED TO HAVE INVESTED A SUM OF RS. 92,15,000/- IN LANDS AT NADERGUL, BODUPPAL AND KUKATPALLY, WHEREAS THE A.O IN THE ASSESSMENT ORDER HAS CONSIDERED AND BROUGHT TO TAX A SUM OF RS. 47,50,000/- ONLY, LEAVING THE BALANCE OF RS. 44,65,000/- FROM TAXATION. HE ALSO OBSERVED THAT IN THE SWORN STATEMENT OF THE ASSESSEE ON 28-05-2010, THE ASSESSEE HAS MENTIONED THAT, HE ALONG WITH ONE SHRI PROMOD KUMAR GUPTA, HAD PAID RS. 60,00,000/- AGAINST 10 ACRES OF LAND AT KUKATPALLY TO SHRI GIRISH KUMAR AND NO RECONCILIATION WAS DONE WITH REGARD TO THIS PAYMENT WHILE COMPLETING THE ASSESSMENT U/S 144 R.W.S 153C OF THE IT ACT. IN VIEW OF THESE TWO FACTS, THE CIT CAME TO THE CONCLUSION THAT THE ASSESSMENT ORDER IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. HE THEREFORE ISSUED A SHOW CAUSE NOTICE DATED 05-03-2014 U/S 263 OF THE ACT. THERE WAS NO RESPONSE FROM THE ASSESSEE AND THEREFORE, THE CIT SENT A NOTICE SERVER TO SERVE THE NOTICE ON THE ASSESSEE. THE NOTICE SERVER FROM THE O/O ADDL. CIT, WARANGAL, VISITED THE VILLAGE AND RETURNED THE UNSERVED NOTICE WITH AN ENDORSEMENT THAT THE ASSESSEE IS NOT RESIDING IN THE VILLAGE AND THAT HIS WIFE VISITS THE VILLAGE AT INTERVALS OF 3 TO 6 MONTHS TO 4 ITA NO. 1772/HYD2014 & 89/HYD/2015 SHRI P. JANAKI RAM RAO, HYDERABAD. LOOKAFTER THE MANGO GARDENS OF THE ASSESSEE AND THAT THE COMPLETE ADDRESS OF THE ASSESSEE IS NOT KNOWN. IN VIEW OF THE SAME, THE CIT PASSED REVISION ORDER EX-PARTE THE ASSESSEE AND DIRECTED THE A.O TO RE-DO THE ASSESSMENT AFTER MAKING DETAILED ENQUIRIES AND INVESTIGATIONS AND EXAMINING THE INVESTMENTS MADE BY THE ASSESSEE IN THE LAND TRANSACTIONS AT NADERGUL, BODUPPAL AND KUKATPALLY, AND AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF HEARING. 4. MEANWHILE, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) AGAINST THE ASSESSMENT COMPLETED U/S 144 R.W.S 153C OF THE IT ACT. THE CIT(A), VIDE ORDER DATED 30-09-2014, OBSERVED THAT THE ASSESSMENT ORDER HAS BEEN REVISED BY CIT U/S 263 OF THE ACT AND THAT THE CONSEQUENTIAL ASSESSMENT ORDER WAS TO BE PASSED. HE, THEREFORE, HELD THAT THE APPEAL HAS BECOME INFRUCTUOUS AS THERE IS NO ASSESSMENT ORDER PASSED BY THE A.O IN EXISTENCE TO BE APPEALED AGAINST AND THUS DISMISSED THE ASSESSEES APPEAL. HE ALSO OBSERVED THAT ASSESSEE IS FREE TO FILE A FRESH APPEAL AGAINST THE RE-ASSESSMENT ORDER IF HE HAS ANY GRIEVANCE AGAINST SUCH RE-ASSESSMENT ORDER. AGAINST BOTH, THE ORDER 5 ITA NO. 1772/HYD2014 & 89/HYD/2015 SHRI P. JANAKI RAM RAO, HYDERABAD. U/S 263 OF THE IT ACT, AS WELL AS, THE ORDER OF THE CIT(A) DATED 30-09-2014, THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE OUTSET, IT IS NOTICED THAT THE ASSESSEES APPEAL AGAINST THE ASSESSMENT U/S 144 R.W.S 153C OF THE IT ACT IS BARRED BY LIMITATION BY A PERIOD OF 33 DAYS. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY SETTING OUT THE REASONS FOR SUCH DELAY. ON GOING THROUGH THE REASONS, WE ARE CONVINCED THAT THE ASSESSEE WAS PREVENTED BY A REASONABLE CAUSE IN NOT FILING OF THE APPEAL BEFORE THE TRIBUNAL WITHIN THE PRESCRIBED TIME LIMIT. THEREFORE, THE DELAY IS CONDONED. 6. COMING TO THE MERITS OF APPEAL, AFTER HEARING BOTH THE PARTIES, WE FIND THAT THE ASSESSMENT ORDER AS WELL AS REVISION ORDER HAVE BEEN PASSED EX-PARTE THE ASSESSEE, BECAUSE THE ASSESSEE COULD NOT BE SERVED WITH THE NOTICES. THE ASSESSEE HAS NOW FILED BEFORE US THE CORRECT ADDRESS OF THE ASSESSEE AT HYDERABAD. SINCE, THE ASSESSMENT HAS BEEN INITIATED U/S 143(3) R.W.S 153C OF THE IT ACT ON THE BASIS OF CERTAIN DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION IN THE CASE OF M/S MBS GROUP, AND IT HAS BEEN REVISED U/S 263 OF THE ACT, AS RIGHTLY HELD BY THE CIT(A), THERE WAS NO ASSESSMENT ORDER 6 ITA NO. 1772/HYD2014 & 89/HYD/2015 SHRI P. JANAKI RAM RAO, HYDERABAD. AFTER THE REVISION ORDER TO BE APPEALED AGAINST WHEN THE APPEAL WAS FILED. THEREFORE, THE ASSESSEES APPEAL AGAINST ASSESSMENT COMPLETED UNDER 143(3) R.W.S 153C OF THE IT ACT IS DISMISSED. FURTHER, EVEN BEFORE THE CIT, THE ASSESSEE DID NOT FILE ANY DETAILS TO EXPLAIN THE SOURCES OF INVESTMENTS IN LAND. THEREFORE, WE ARE OF THE OPINION THAT THE ASSESSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE ORDER OF THE CIT U/S 263 OF THE IT ACT NEEDS NO INTERFERENCE. THEREFORE, THE A.O IS DIRECTED TO PASS A FRESH ASSESSMENT ORDER DENOVO CONSEQUENT TO THE REVISION ORDER U/S 263 OF THE IT ACT AFTER GIVING THE ASSESSEE A FAIR OPPORTUNITY OF HEARING. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES FOR THE A.Y 2006-07 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 27 TH OCTOBER , 2017. SD/- SD/- (S. RIFAUR RAHMAN) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 27 TH OCTOBER, 2017. 7 ITA NO. 1772/HYD2014 & 89/HYD/2015 SHRI P. JANAKI RAM RAO, HYDERABAD. KRK 1) SHRI P. JANAKI RAMA RAO C/O SHRI S. RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3-6-643, STREET NO. 9, HIMAYATNAGAR, HYDERABAD-500029. 2) THE ACIT, CENTRAL CIRCLE-3, HYDERABAD 3) CIT(CENTRAL), HYDERABAD. 4) THE ADDL. CIT, CENTRAL RANGE-3, HYDERABAD 5) CIT(A)-VII, HYDERABAD. 6) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 7) GUARD FILE