Appeal details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 0224 (ITAT-VISAKHAPATNAM)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-11-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
DB
Next Hearing Date
14-09-2015
Assessment Year
2006-2007
Appeal Filed On
05-05-2014
Judgement Text
ITA NO.188/VIZAG/2014 S. SRINIVASA RAO, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NO.188/VIZAG/2014 ( / ASSESSMENT YEAR : 2006-07 ) S. SRINIVASA RAO VISAKHAPATNAM VS. ITO WARD-2(3), RANGE-2 VISAKHAPATNAM [ PAN: AFSPS 4837C ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI I. KAMASASTRY, AR -., / / RESPONDENT BY : SMT. D. KOMALI KRISHNA, DR / 3 / DATE OF HEARING : 22.09.2015 / 3 / DATE OF PRONOUNCEMENT : 18.11.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE CIT(A), VISAKHAPATNAM DATED 3.3.2014 FOR THE ASSESS MENT YEAR 2006-07. ITA NO.188/VIZAG/2014 S. SRINIVASA RAO, VISAKHAPATNAM 2 2. IN THIS APPEAL, THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS: 1. THE ORDER OF THE CIT(A) VISAKHAPATNAM IS ERRONEOUS IN LAW AND CONTRARY TO THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A), VISAKHAPATNAM HAS ERRED IN CONFIRMING THE ADDITION OF RS.50,00,000/- TO THE TOTAL INCOME OF THE APPELLANT. 3. IN THE ABSENCE OF ANY MATERIAL TO ESTABLISH THAT THE RE AROSE ESCAPEMENT OF INCOME OR FURNISHING OF INACCURATE PA RTICULARS OF INCOME, THE LEARNED ASSESSING OFFICER OUGHT TO HAVE NOTICED THAT THE ACTION INITIATED U/S 147 R/W SEC.148 OF THE ACT IS BAD IN LAW AND HENCE THE ASSESSMENT PROCEEDINGS CONCLUDED IN THE INSTANT CASE IS VOID AB INITIO. 4. GOING BY THE FACT THAT THE ORIGINAL PROCEEDINGS U/S 147 U/W SEC.148 WERE INITIATED BY THE ITO WARD-2(1), GUNTUR AND THE ASSESSEE RESPONDED THERE IS BY FILING THE RETURN OF INCOME A T HIS END, TRANSFER OF THE FILE TO THE ITO WARD-2(3) VISAKHAPATNAM WITHOUT CALLING FOR THE OBJECTIONS OF THE ASSESSEE IS AGAINST THE PROVISION S OF LAW AND HENCE THE ASSESSMENT PROCEEDINGS CONCLUDED AT THE END OF ITO WARD-2(3) VISAKHAPATNAM MAY BE VOID AB INITIO. 5. IN THE ABSENCE OF ANY OPPORTUNITY AFFORDED TO THE AS SESSEE CALLING FOR HIS OBJECTIONS AGAINST THE PROPOSED ADDITION OF RS. 65,00,000/- U/S 68 OF THE ACT THERE LIES NON ADHERENCE TO THE PRINCIPL ES OF NATURAL JUSTICE AND BY THIS TECHNICAL FLAW ITSELF THE PROCEEDINGS W OULD BECOME VOID AB INITIO. 6. IN THE ABSENCE OF ANY COGENT MATERIAL TO PROVE THAT THERE WAS PASSAGE OF MONEY TO THE EXTENT OF RS.65 LAKHS FROM THE DECE ASED TO SRI T. SATYANARAYANA THE LEARNED ASSESSING OFFICER OUGHT N OT HAVE FORMULATED ADDITION TO THE ABOVE EXTENT AND HENCE S UCH ADDITION WHICH WAS FORMULATED ONLY ON SURMISES AND PRESUMPTION MAY NOT STAND TO THE TEST OF ANY REASONING AND MAY BE VOID IN LAW. 7. GOING BY THE FACT THAT THE LEARNED CIT(A), GUNTUR O RDERED DELETION OF ADDITION OF RS.65 LAKHS FORMULATED IN THE CASE OF S RI THOTA SATYANARAYANA HOLDING THE VIEW THAT THERE WAS NO EV IDENCE TO ESTABLISH THAT THE LOAN TO THE ABOVE EXTENT WAS PAS SED ON FROM THE DECEASED FATHER OF THE ASSESSEE, THE IMPUGNED ADDIT ION OF RS.65 LAKHS MAY BE DEVOID OF ANY MERIT. 8. FOR THESE AND ANY OTHER GROUND OR GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED THAT THE APPEAL MAY B E ALLOWED AND THE ADDITION CONFIRMED TO THE ABOVE EXTENT BY THE LEARN ED CIT(A) MAY BE ORDERED TO BE DELETED IN THE INTEREST OF ENQUIRY AN D JUSTICE AND ALSO TO BE IN CONFORMITY WITH THE PROVISIONS OF LAW. ITA NO.188/VIZAG/2014 S. SRINIVASA RAO, VISAKHAPATNAM 3 3. WHEN THIS APPEAL WAS CALLED FOR HEARING, THE LD. COUNSEL FOR THE ASSESSEE HAS NOT PRESSED ALL THE GROUNDS WHICH ARE RAISED ABOVE. 4. NOW THE ASSESSEE HAS RAISED THE FOLLOWING ADDITI ONAL GROUNDS, WHICH ARE EXTRACTED HEREUNDER: 1. THE NOTICE U/S 148 DATED 6.12.2010 WAS ISSUED BY TH E ITO, WARD-2(1), GUNTUR IN THE NAME OF AN ASSESSEE WHO EXPIRED IN 20 08 AND IS NO MORE ON THE DATE OF THE ISSUANCE OF THE NOTICE. HENCE THE NOTICE UNDER SECTION 148 IS INVALID AND CONSEQUENTLY ALL THE PROCEEDINGS UNDER SUCH AN INVALID NOTICE ARE VOID AB INITIO INCLUDING THE ORDER U/S 147 R.W.S. 1 43(3) DATED 22.11.2011 PASSED BY THE ITO WARD-2(3), VISAKHAPATNAM-2. 2. THAT THE LD. ASSESSING OFFICER IS NOT CORRECT IN MA KING AN ADDITION OF RS.65,00,000/- U/S 69A MAINLY ON THE GROUND THAT TH E LR OF THE DECEASED ASSESSEE COULD NOT EXPLAIN THE SOURCES FOR THE INVE STMENT MADE BY THE DECEASED DURING HIS LIFE TIME. WHEREAS AS PER THE DEEMING FICTION OF SECTION 69A IT IS THE ASSESSEE AND ASSESSEE ALONE WHO HAS G IVEN THE EXPLANATION FOR THE SOURCES OF INVESTMENT. THE LD. CIT(A) IS ALSO NOT CORRECT IN UPHOLDING THE ADDITION TO THE EXTENT OF RS.50,00,000/- ON THE SAM E GROUND OF LACK OF PROPER EXPLANATION BY THE LR OF THE DECEASED ASSESSEE. 3. DETAILED SUBMISSIONS WILL BE MADE AT THE TIME OF HE ARING. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE, ON WHOM NOTICE WAS ISSUED, WAS EXPIRED ON 2008 AND THEREFORE, THAT NOTICE IS NOT VALID AND THE ASSESSMENT HAS TO BE QU ASHED. 6. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT BEFORE THE LD. CIT(A), THE ASSESSEE ONLY SUBMITTED THAT REOPENING IS NOT VALID FOR THE REASON THAT NO MATERIAL IS AVAILABLE AND THE ISSUE OF DEATH OF THE ASSESSEE WAS NOT RAISED BEFORE THE CIT(A) AND SUBMI TTED THAT IF AT ALL ITA NO.188/VIZAG/2014 S. SRINIVASA RAO, VISAKHAPATNAM 4 ADDITIONAL GROUNDS ARE TO BE ADMITTED, IT HAS TO GO BACK TO THE LD. CIT(A) FOR ADJUDICATION. 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE O NLY ISSUE FOR CONSIDERATION IS THAT ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE WAS EXPIRED IN 2008 AND THEREAFTER NOTICE U/S 148 OF THE INCOME-TAX ACT, 1961 WAS ISSUED. THE LD. COUNSEL F OR THE ASSESSEE BEFORE THE LD. CIT(A) AGITATED THAT THE RE-OPENING WAS NOT VALID ON THE GROUND THAT THERE IS NO MATERIAL TO ESTABLISH THAT THERE IS AN ESCAPEMENT OF INCOME. THAT THE EXPIRY OF THE ASSESSEE WAS NOT AT ALL RAISED AND THERE IS NO OCCASION FOR THE LD. CIT(A) TO DECIDE T HE ASPECT OF ISSUE OF NOTICE ON DEAD PERSON. THE LD. COUNSEL FOR THE ASS ESSEE HAS RAISED THIS ISSUE FIRST TIME BEFORE US. 8. IN THIS CONTEXT, THE HONBLE SUPREME COURT IN TH E CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383 (SC) HAS OBSERVED THAT THE TRIBUNAL HAD JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH AROSE FROM THE FACTS AS FOUND BY THE INCOME-TAX AUTHORITIES AN D HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. FURTHER, THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. TOLLARAM HASSOMAL 298 ITR 22 (MP) HAS OBSERVED THAT THE TRIBUNAL HAVING PERMI TTED THE ASSESSEE ITA NO.188/VIZAG/2014 S. SRINIVASA RAO, VISAKHAPATNAM 5 TO RAISE FOUR ADDITIONAL GROUNDS TREATING THEM TO B E LEGAL GROUNDS IN APPEAL FOR THE FIRST TIME SHOULD HAVE SET ASIDE THE ORDER OF THE CIT(A) AND REMANDED THE CASE TO THE CIT(A) FOR DECIDING TH E APPEAL AFRESH IN ALL THE ISSUES INCLUDING ON THOSE FOUR GROUNDS RAIS ED BY THE ASSESSEE IN THE APPEAL BEFORE THE TRIBUNAL RATHER THAN TO DECID E THE ADDITIONAL GROUNDS ON THE MERITS FOR THE FIRST TIME BY ITSELF. 9. WE THEREFORE, ADMITTING THE ADDITIONAL GROUNDS RA ISED BY THE ASSESSEE, KEEPING IN VIEW OF THE HONBLE SUPREME CO URT AS WELL AS THE HONBLE MADHYA PRADESH HIGH COURTS DECISIONS (SUPR A), SET ASIDE THE ORDER PASSED BY THE CIT(A) AND REMIT THE MATTER BAC K TO CIT(A) TO ADJUDICATE ADDITIONAL GROUNDS RAISED BY THE ASSESSE E AND THEREAFTER CIT(A) IS DIRECTED TO DECIDE THE ISSUE ON MERITS. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 18 TH NOV15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 18.11.2015 VG/SPS ITA NO.188/VIZAG/2014 S. SRINIVASA RAO, VISAKHAPATNAM 6 / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT SRI SUDA SRINIVASA RAO, LR OF LATE SUDA VENKATESWARLU, 31-8-10/18, FLAT NO.302, SAI KUTIR S ATAVAHANA NAGAR, KOORMANNAPALEM, VISAKHAPATNAM-530 046. 2. -., / THE RESPONDENT ITO WARD-2(3), VISAKHAPATNAM. 3. : / THE CIT, VISAKHAPATNAM 4. : () / THE CIT(A), VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // @A ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM SL. NO. DESCRIPTION DATE INITIALS 1. DATE OF DICTATION BY THE AUTHOR SR.PS 2. DRAFT PLACED BEFORE THE DICTATING MEMBER SR.PS 3. DRAFT PLACED BEFORE THE SECOND MEMBER SR. PS 4. DRAFT APPROVED BY THE SECOND MEMBER SR. PS 5. DATE OF APPROVED ORDER COMES TO THE SR. PS SR. PS 6. DATE OF PRONOUNCEMENT OF ORDER SR. PS 7. DATE OF FILE SENT TO THE BENCH CLERK SR. PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK HD. C LK 9. DATE OF DISPATCH OF ORDER SR. PS
