Dy. Commissioner of Income Tax , Circle-3(1), Hyderabad V. Saket Engineers Private Limited , Hyderabad

ITA 2101/Hyd/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5506 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 27-08-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 02-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Assessee Lawyers: P JITENDRA KUMAR
• Keywords: Rejection of books of accounts; Business income; Rectification of order; Principle of natural justice; Additional evidence; Assessment record; TDS
• Section: 143(3); 13; 145(3); 144; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH : HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA NO. 2101/HYD/2018 (ASSESSMENT YEAR: 2014-15) THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 3(1), HYDERABAD. ....APPELLANT. VS. M/S. SAKET ENGINEERS PRIVATE LIMITED, #207, 2 ND FLOOR, ASHOKA BHOOPAL CHAMBERS, SP ROAD, BEGUMPET, HYDERABAD. PAN : AAFCS3079K. ..RESPONDENT. APPELLANT BY : SMT. AMISHA S. GUPT - DR RESPONDENT BY : SHRI P. JITENDRA KUMAR, AR. DATE OF HEARING : 27.08.2021 DATE OF PRONOUNCEMENT : 15.09.2021 O R D E R PER S.S. GODARA, J.M. : THIS REVENUES APPEAL FOR A.Y. 2014-15 ARISES FROM THE COMMISSIONER OF INCOME TAX (APPEALS) 3, HYDERABAD S ORDER DT.27.08.2018 PASSED IN CASE NO.0406/DCIT-3(1)/HYD /CIT(A)- 3/2016-17 INVOLVING PROCEEDINGS UNDER SECTION 143( 3) OF INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. 2 ITA NO.2101/HYD/2018 HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. THE REVENUE HAS RAISED THE FOLLOWING SUBSTANTIVE GROUNDS IN THE INSTANT APPEAL : 1. THE LD. CIT(A) ERRED BOTH IN LAW AND ON FACTS O F THE CASE. 2 THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSM ENT WAS BAD IN LAW IGNORING THE FACT THAT THE HEARING WHICH TOOK PLAC E AFTER THE DATE OF ORDER HAS NO BEARING ON THE ORDER PASSED 2.1 THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THE F ACT THAT THE AO HAS NOT UTILIZED THE INFORMATION SUBMITTED BY THE A SSESSE SUBSEQUENT DATE FROM THE DATE OF ORDER AND THE OUTCOME OOF THE HEARING BECOMES INFRUCTUOUS IN THE LIGHT OF THE FACT THAT THE ORDER WAS ALREADY PASSED. 3. THE LD. CIT(A) OUGHT TO HAVE ADJUDICATED THE AP PEAL ON MERITS OF THE CASE RATHER THAN DELETING THE ORDER BASED ON ANOTH ER ISSUE WHICH ITSELF IS INFRUCTUOUS. 4. THE LD.CIT(A) OUGHT TO HAVE APPRECIATED THE FAC T THAT THE ESTIMATION OF INCOME BY REJECTION OF BOOK BY THE AO IS REASONABL E UNDER THE CIRCUMSTANCES ESPECIALLY WHEN THE ASSESSEE FAILED TO PRODUCE BILLS AND VOUCHERS BEFORE THE AO FOR VERIFICATION. 5. ANY OTHER GROUND (S) THAT MAY BE URGED AT THE T IME OF HEARING. 3. BOTH THE LEARNED REPRESENTATIVES NEXT INVITED OU R ATTENTION TO THE CIT(A) DETAILED DISCUSSION QUASHING THE ASSESSM ENT HEREIN DATED 27.12.2016 AS BAD IN LAW AS UNDER : VI) DURING THE COURSE OF APPEAL PROCEEDINGS, THE A PPELLANT PRESSED ADDITIONAL GROUNDS OF APPEAL. THIS WAS REMANDED TO THE ASSESSING OFFICER FOR REPORT. THE ASSESSING OFFICER I.E., DCI T, CIRCLE-3(1), HYDERABAD VIDE LETTER DATED 20-11-2017 WHICH WAS FO RWARDED BY THE ADDL. CIT, RANGE-3, HYDERABAD VIDE LETTER RECEIVED ON 23-11-2017 STATED THAT THE REMAND REPORT WOULD BE SUBMITTED AF TER RECEIPT OF THE ASSESSMENT RECORDS FROM THE VIGILANCE AUTHORITIES A T CHENNAI. SUBSEQUENTLY, VIDE LETTER DATED 08-02-2018, THE ASS ESSING OFFICER I.E., 3 ITA NO.2101/HYD/2018 DCIT, CIRCLE-3(1), HYDERABAD FORWARDED THE REMAND R EPORT WHICH WAS FORWARDED THROUGH THE ADDL.CIT, RANGE-3, HYDERABAD VIDE LETTER RECEIVED ON 09-02-2018. THE REMAND REPORT OF THE AS SESSING OFFICER I.E., DCIT, CIRCLE-3(1), HYDERABAD ARE EXTRACTED BE LOW : 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF CONSTRUCTION, DEVELOPING PROPERT Y AND CIVIL CONTRACTS. ASSESSMENT IN THIS CASE WAS COMPLETED U/ S. 143(3) ON 27.12.2016 ON AN INCOME OF RS.20,62,35,630J- (BY ES TIMATING THE INCOME @15% OF GROSS SALES) AS AGAINST THE RETURNED INCOME OF RS.L,27,46,020/-. A DEMAND OF RS.9,50, 19,600J- WAS RAISED, WHICH WAS SUBSEQUENTLY REDUCED TO RS.8,89,63,270J- VIDE O RDER DATED 03.02.2017 U/S. 154. 3. THE REPORT COULD NOT BE SUBMITTED EARLIER AS THE ASSESSMENT RECORD WAS TAKEN BY ADIT(VIG.)(SOUTH), UNIT-I (2), CHENNAI DURING VIGILANCE INSPECTION OF CIRCLE-3(1), HYDERABAD ON 9 TH AND 10 TH OCTOBER, 2017, WHICH WAS REQUESTED TO BE RETURNED BACK VIDE THIS O FFICE LETTER DATED 20.11.2017. THE ASSESSMENT. RECORD WAS RECEIVED FRO M ADIT (VIG.) (SOUTH), UNIT-I (2), CHENNAI ON 30.01.2018. 4. THE ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCE I N SUPPORT OF THE BOOK RESULTS. AN OPPORTUNITY WAS GIVEN TO THE ASSES SEE AND THE ASSESSEE SUBMITTED THE DETAILS OF ADDITIONAL EVIDEN CE AS PLACED BEFORE THE CIT(A)-3, HYDERABAD. P PERUSAL OF THE AS SESSMENT RECORD SHOWS THAT HEARINGS IN THIS CASE WERE CONDUCTED ON 09.02.2016, 23.12.2016, 26.12.2016 & 30.12.2016. ASSESSMENT WAS COMPLETED II] . 143(3) VIDE ORDER DATED 27.12.2016. THE ASSE SSEE VIDE REPLY DATED 26.12.2016 HAS SUBMITTED DETAILS OF LARGE EXP ENSES, SHARE PREMIUM, LARGE VALUE OF SALE CONSIDERATION, DETAILS OF TDS AND VIDE REPLY DATED 30.12.2016 HAS SUBMITTED DETAILS OF ADV ERTISEMENT EXPENSES & COMMISSION EXPENSES, DETAILS OF REVENUE FROM OPERATIONS, DETAILS OF CLOSING STOCK AND ITS VALUATION, DETAILS OF PURCHASES, DETAILS OF TDS DEDUCTED U/S. 192. IN THE ADDITIONAL EVIDENC E, BESIDES THE ABOVE MENTIONED DETAILS, THE ASSESSEE HAS FURTHER S UBMITTED STATEMENT OF NET REALIZABLE VALUES COMPARISON OF OP ERATIVE RESULTS FOR AY 2013-14 & 201.4-15, COMPUTATION OF REVENUE AS PE R PERCENTAGE COMPLETION METHOD AND THE DETAILS OF ACTUAL SALES I N PROJECT SRIYAM & PRANAAM AND HAS SUBMITTED THAT THE LOSS OF RS.6.0 5 CR IN SRIYAM PROJECT AND RS.14.26 CR IN PRANAAM PROJECT BE ALLOW ED. 5. IN VIEW OF THE ABOVE FACTS AND A PERUSAL OF THE ASSESSMENT FOLDER THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE M AY BE ACCEPTED AND CONSIDERED ACCORDINGLY. 4 ITA NO.2101/HYD/2018 VII) THE COMMENTS OF THE ADDL. COMMISSIONER OF INCO ME TAX, RANGE-3, HYDERABAD ON THE REMAND REPORT SENT BY THE ASSESSIN G OFFICER I.E., DCIT, CIRC1E3(1), HYDERABAD ARE EXTRACTED BELOW: 2. KINDLY FIND ENCLOSED HEREWITH THE REPORT OF THE ASSESSING OFFICER, DCIT, CIRCLE-3(1), HYDERABAD IN THE CASE OF M/S. SA KET ENGINEERING P LTD FOR AY 2014-15 FOR KIND PERUSAL. 3. THE ASSESSEE COMPANY IS ENGAGED INTO THE BUSINES S OF CONSTRUCTION. THE SCRUTINY ASSESSMENT WAS COMPLETED U/S. 143(3) ON 27.12.2016 AT THE ASSESSED INCOME OF RS.20,62,35,63 0 J - AFTER REJECTION OF BOOKS OF ACCOUNTS AND ESTIMATION OF TH E INCOME @15% OF GROSS SALES. THUS, DEMAND OF RS.9,50,19,600/- WAS R AISED, WHICH HAS BEEN REDUCED TO RS.8,89,63,270JAFTER PASSING TH E RECTIFICATION ORDER U/ S.154. 4. DURING THE APPEAL PROCEEDINGS BEFORE THE LD. CIT (A)'3, HYDERABAD, THE ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCE WHIC H INCLUDES DETAILS OF REVENUE FROM OPERATIONS (PROJECT WISE BR EAK UP), DETAILS OF ADVERTISEMENT EXPENSES & COMMISSION EXPENSES, DETAI LS OF CLOSING STOCK AND VALUATION AND OTHER SUCH DETAILS. DURING SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED DETA ILS OF SHARE PREMIUM RECEIPT, DETAILS OF EXPENSES CLAIMED AND OT HER SUCH DETAILS ON 26.12.2016. FURTHER, DURING THE HEARING HELD ON 30.12.2016, FURTHER DETAILS REGARDING THE ADVERTISEMENT AND COM MISSION EXPENSES, BREAK UP OF REVENUE FROM OPERATION, DETAI LS OF PROJECTS, DETAILS OF TDS DEDUCTION ETC. WERE SUBMITTED. 5. IT HAS BEEN REPORTED BY THE ASSESSING OFFICER AN D IT IS ALSO EVIDENT FROM THE ASSESSMENT RECORD THAT THE ASSESSMENT WAS COMPLETED ON 27.12.2016 AND THAT SOME OF THE DETAILS FILED BY TH E ASSESSEE DURING THE SCRUTINY ASSESSMENT WERE NOT CONSIDERED BY THE ASSESSING OFFICER. 6. IN VIEW OF THE ABOVE, THE ADDITIONAL EVIDENCE SU BMITTED BY THE ASSESSEE MAY BE ACCEPTED AND CONSIDERED ACCORDINGLY . VIII) COPY OF THE REMAND REPORT SENT TO THIS OFFICE BY THE AO I.E. THE DCIT, CIRC1E-3(1), HYDERABAD WAS SENT TO THE APPELLANT (A LONG WITH THE FORWARDING LETTER OF THE ADDL. CIT, RANGE-3, HYDERA BAD ADDRESSED TO THIS OFFICE) AS PER THE PRINCIPLES OF NATURAL JUSTI CE AND EQUITY. COPIES OF THESE TWO REPORTS ARE EXTRACTED SUPRA. ALONG WITH T HE REPLY TO THE REMAND REPORT, THE APPELLANT MADE THE FOLLOWING SUB MISSIONS:- PRAYER FOR PERMISSION FOR WITHDRAWAL OF GROUND OF APPEAL UNDER GROUND E. READING AS UNDER 5 ITA NO.2101/HYD/2018 LEARNED ASSESSING OFFICER ERRED TO TREAT THE OTHER INCOME RS 32.51 LAKHS SEPARATELY DESPITE THE FACT THAT OTHER INCOME FORMS PART OF BUSINESS INCOME AND DESERVES TO BE DEALT AS PART OF BUSINESS INCOME BUT SHOULD NOT HAVE TAKEN SEPARATEL Y THE APPELLANT CRAVES TO PRAY FOR PERMISSION TO WITH DRAW THIS GROUND OF APPEAL E. THIS PRAYER IS MADE SINCE THE APPELLANT R EALISED ITS MISTAKE. AS THAT THIS INCOME OF RS 32.51 LAKHS OFFERED BY TH E APPELLANT, UNDER THE HEAD INCOME FROM OTHER SOURCES AND THEREFORE IT IS UNFAIR AND ERRONEOUS TO RAISE A GROUND OF APPEAL TO REDRESS AS A GRIEVANCE. THE APPELLANT REGRETS FOR THE INCONVENIENCE CAUSED AND PRAYS FOR WITHDRAWAL OF GROUND OF APPEAL. PRAYER THE APPELLANT WITHDRAWS GROUND OF APPEAL UNDER 'E', PERMISSION MAY KINDLY BE GRANTED. FURTHER, THE COMMENTS OF THE APPELLANT IN APPEAL, WITH REFERENCE TO THE REMAND REPORT OF THE AO AND THE CO MMENTS OF ADDL. CIT, RANGE-3, HYDERABAD ARE AS FOLLOWS : THE APPELLANT WAS GRANTED AN OPPORTUNITY TO FURNISH COMMENTS ON THE I REMAND REPORT SUBMITTED BY ADDITIONAL COMMISS IONER OF INCOME TAX, CIRCLE 3 VIDE LETTER DATED 09.02.2018 A ND REMAND REPORT LETTER DATED 08.02.2018 OF THE ASSESSING OFF ICER, DY. COMMISSIONER OF INCOME TAX, CIRCLE 3(1). THE APPELLANT RESPECTFULLY SUBMITS THE FOLLOWING CO MMENTS. A. KIND ATTENTION OF LEARNED CIT (APPEALS) IS INVIT ED TO PARA 4 OF THE REMAND REPORT DATED 08.02.18 OF THE ASSESSING OFFIC ER AS WELL AS THE ASSESSMENT ORDER ISSUED. THE ASSESSMENT ORDER NOTE S THE DATE OF THE ASSESSEE OR THE LEARNED AR SHALL NOW APPEAR BEF ORE THE LEARNED CIT (A) ON OR BEFORE 31/07/2021 WITH ALL THE COGENT SUPPORTIVE MATERIAL AT HIS OWN RISK AND RESPONSIBILITY TO BE F OLLOWED BY THREE EFFECTIVE OPPORTUNITIES OF HEARING. HEARING AS 26.1 2.2016 WHILE PARA 4 OF THE REMAND REPORT SPECIFICALLY RECOGNIZES THE DATE OF THE ASSESSEE OR THE LEARNED AR SHALL NOW APPEAR BEFORE THE LEARNED CIT (A) ON OR BEFORE 31/07/2021 WITH ALL THE COGENT SUP PORTIVE MATERIAL AT HIS OWN RISK AND RESPONSIBILITY TO BE FOLLOWED B Y THREE EFFECTIVE OPPORTUNITIES OF HEARING AS 30.12.2016. B. SIMILARLY LEARNED ADDITIONAL COMMISSIONER OF INC OME TAX IN PARA 4 ALSO NOTED THAT THERE WAS A HEARING ON 30.12.2016 . THE APPELLANT'S OBJECTIONS ARE VINDICATED BY THE AVERMENTS OF ASSES SING OFFICER AS WELL AS ADDITIONAL COMMISSIONER OF INCOME TAX, THAT THE LAST DATE OF HEARING WAS 30.12.2016 AND THE ALLEGATIONS THAT ASS ESSEE DID NOT I' FURNISH INFORMATION IS FAR FROM TRUTH, THE APPELLAN T BEGS TO PRAY TO CONSIDER THIS SITUATION OF OVERLOOKING THE INFORMAT ION AND HEARING 6 ITA NO.2101/HYD/2018 DATE OF 30.12.2016 THAT WERE CONVENIENTLY IGNORED W HILE PASSING THE ORDER APPLYING SECTION 145(3) READ WITH SECTION 14~ OF TILE INCOME TAX ACT, 1961 WHICH IS AGAINST ALL CANONS OF LAW. THE A PPELLANT HUMBLY PRAYS TO QUASH THE ORDERS SINCE THE ORDERS WERE PAS SED WITHOUT COMPLETING THE HEARING AND ARE AGAINST PRINCIPLES O F NATURAL JUSTICE AND EQUITY. C. THE APPELLANT IN THE GROUNDS OF APPEAL A AND B A ND IN WRITTEN SUBMISSIONS PLACED BEFORE THE HONORABLE CIT (APPEAL S), PRAYED THAT ORDERS PASSED BY ASSESSING OFFICER DESERVE TO BE AN NULLED AS THE ORDERS WERE DISPOSED WITHOUT CONCLUDING THE HEARING , DENYING THE APPELLANT A RIGHT OF OPPORTUNITY OF HEARING, WILLFU LLY OVERLOOKING THE INFORMATION ON RECORD WHICH IS HIGHLY ILLEGAL, IMPR OPER AND CONTRARY TO ALL CANONS OF LAW. D. THE APPELLANT HAS ALSO SUBMITTED JUDICIAL PRONOU NCEMENTS, THAT ARE UN 'FORM M THEIR VERDICT THAT ORDERS PASSED WIT HOUT AFFORDING A PROPER OPPORTUNITY OF HEARING ARE BAD IN LAW AND DE SERVED TO BE QUASHED. E. THE APPELLANT BEGS TO CONSIDER ITS PRAYERS MADE IN GROUNDS OF APPEAL AND WRITTEN SUBMISSIONS TO QUASH THE ILLEGAL ORDERS. IX) GROUND NOS. A AND B IN APPEAL RELATES TO THE LE GALITY AND FACTUAL MATRIX OF THE ASSESSMENT PROCEEDINGS. IT IS SEEN TH AT THE ASSESSMENT ORDER WAS PASSED BY THE ASSESSING OFFICER ON 27-12- 2016. THE HEARINGS AS PER THE ASSESSMENT ORDER WERE HELD ON 0 9-12-2016,23-12- 2016 AND 26-12-2016. THE ADDITIONAL EVIDENCE AND OT HER DETAILS WERE REMANDED TO THE ASSESSING OFFICER. IT WAS REPORTED BY THE ASSESSING OFFICER VIDE REPORT DATED 08-02-2018 THAT THE HEARI NGS WERE CONDUCTED ON 09-02-2016,23-12-2016,26-12-2016 AND 30-12-2016. THE ASSESSING OFFICER STATED IN PARA-4 OF THE REMAND RE PORT DATED 08-02- 2018 AS FOLLOWS: 4. THE ASSESSEE HAS SUBMITTED ADDITIONAL EVIDENCE I N SUPPORT OF THE BOOK RESULTS. AN OPPORTUNITY WAS GIVEN TO THE ASSES SEE AND THE SUBMITTED. THE DETAILS OF ADDITIONAL EVIDENCE AS PL ACED BEFORE THE CIT(A)-3, HYDERABAD. A PERUSAL OF THE ASSESSMENT R ECORD SHOWS THAT HEARINGS IN THIS CASE WERE CONDUCTED ON 09-02-2016, 23-12-2016, 26.12.2016 & 30-12.2016. ASSESSMENT WAS COMPLETED U / S.143(3) VIDE ORDER DATED 27.12.2016. THE ASSESSEE VIDE REPL Y DATED 26.12.2016 HAS SUBMITTED DETAILS OF LARGE EXPENSES, SHARE PREMIUM, LARGE VALUE OF SALE CONSIDERATION, DETAILS OF TDS A ND VIDE REPLY DATED 30.12.2016 HAS SUBMITTED DETAILS OF ADVERTISEMENT E XPENSES & COMMISSION EXPENSES, DETAILS OF REVENUE FROM OPERAT IONS, DETAILS OF CLOSING STOCK AND ITS VALUATION, DETAILS OF PURCHAS ES, DETAILS OF TDS DEDUCTED U/ S.192. IN THE ADDITIONAL EVIDENCE, BESI DES THE ABOVE MENTIONED DETAILS, THE ASSESSEE HAS FURTHER SUBMITT ED STATEMENT OF NET REALIZABLE VALUES COMPARISON OF OPERATIVE RESUL TS FOR AY 2013-14 7 ITA NO.2101/HYD/2018 & 2014-15, COMPUTATION OF REVENUE AS PER PERCENTAGE COMPLETION METHOD AND THE DETAILS OF ACTUAL SALES IN PROJECT S RIYAM & PRANAAM AND HAS SUBMITTED THAT THE LOSS OF RS. 6. 05 CR IN SRIY AM PROJECT AND RS.14.26 CR IN PRANAAM PROJECT BE ALLOWED.' THE ADDL.CIT, RANGE-3, HYDERABAD (WHIL E FORWARDING THE REMAND REPORT OF THE ASSESSING OFFICER VIDE LETTER DATED 09-02-2018) STATED IN PARA-4 AND 5 OF THE FORWARDING LETTER AS FOLLOWS : 4. DURING THE APPEAL PROCEEDINGS BEFORE THE LD. CI T{A)-3, HYDERABAD, THE ASSESSEE HAS SUBMITTED ADDITIONAL EV IDENCE WHICH INCLUDES DETAILS OF REVENUE FROM OPERATIONS (PROJEC T WISE BREAK UP), DETAILS OF ADVERTISEMENT EXPENSES & COMMISSION EXPE NSES, DETAILS OF CLOSING STOCK AND VALUATION AND OTHER SUCH DETAILS. DURING SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED DETA ILS OF SHARE PREMIUM RECEIPT, DETAILS OF EXPENSES CLAIMED AND OT HER SUCH DETAILS ON 26.12.2016. FURTHER, DURING THE HEARING HELD ON 30.12. 1, FURTHER DETAILS REGARDING THE ADVERTISEMENT AND COMMISSION EXPENSES, BREAK UP OF REVENUE FROM OPERATION, DETAILS OF PROJECTS, DETAILS OF TDS DEDUCTION ETC. WERE SUBMITTED. 5. IT HAS BEEN REPORTED BY THE ASSESSING OFFICER AN D IT IS ALSO EVIDENT FROM THE ASSESSMENT RECORD THAT THE ASSESSMENT WAS COMPLETED ON 27.12.2016 AND THAT SOME OF THE DETAILS FILED BY TH E ASSESSEE DURING THE SCRUTINY ASSESSMENT WERE NOT CONSIDERED BY THE ASSESSING OFFICER. 6. IN VIEW OF THE ABOVE, THE ADDITIONAL EVIDENCE SU BMITTED BY THE APPELLANT ACCEPTED AND CONSIDERED ACCORDINGLY.' THE REMAND REPORT OF THE ASSESSING OFFICER I.E., DC IT, CIRCLE-3(1), HYDERABAD ALONG WITH THE FORWARDING COMMENTS OF THE ADDL. CIT, RANGE-3, HYDERABAD WERE SENT TO THE APPELLANT M/S. SAKET ENGINEERS PRIVATE LIMITED FOR COMMENTS IN ACCORDANCE WITH PRI NCIPLES OF NATURAL JUSTICE AND EQUITY. THE APPELLANT WHILE REPLYING TO THE CONTENTS OF THE REMAND REPORT STATED WITH REFERENCE TO GROUNDS A AN D B AS FOLLOWS : A. KIND ATTENTION OF LEARNED CIT(APPEALS) IS INVIT ED TO PARA 4 OF THE REMAND REPORT DATED 08.02.18 OF THE ASSESSING OFFIC ER AS WELL AS THE ASSESSMENT ORDER ISSUED. THE ASSESSMENT ORDER NOTE S THE DATE OF LAST HEARING AS 26.12.2016 WHILE PARA 4 OF THE REMA ND REPORT SPECIFICALLY RECOGNIZES THE DATE OF LAST HEARING AS 30-12-2016. B. SIMILARLY LEARNED ADDITIONAL COMMISSIONER OF INC OME TAX IN PARA 4 ALSO NOTED THAT THERE WAS A HEARING ON 30.12.2016 . THE APPELLANT'S OBJECTIONS ARE VINDICATED BY THE AVERMENTS OF ASSES SING OFFICER AS WELL AS ADDITIONAL COMMISSIONER OF INCOME TAX, THAT THE LAST DATE OF HEARING WAS 30.12.2016 AND THE ALLEGATIONS THAT ASS ESSEE DID NOT FURNISH INFORMATION IS FAR FROM TRUTH. THE APPELLAN T BEGS TO PRAY TO CONSIDER THIS SITUATION OF OVERLOOKING THE INFORMAT ION AND HEARING 8 ITA NO.2101/HYD/2018 DATE OF 30.12.2016 THAT WERE CONVENIENTLY IGNORED W HILE PASSING THE ORDER APPLYING SECTION 145(3) READ WITH SECTION 144 OF THE INCOME TAX ACT, 1961 WHICH IS AGAINST ALL CANONS OF LAW. THE A PPELLANT HUMBLY PRAYS TO QUASH THE ORDERS SINCE THE ORDERS WERE PAS SED WITHOUT COMPLETING THE HEARING AND ARE AGAINST PRINCIPLES O F NATURAL JUSTICE AND EQUITY. ' IT IS SEEN FROM THE ASSESSING OFFICER' S AND ALSO ON THE ADDL. CITS REMAND REPORTS THAT ASSESSMENT ORDER WAS PAS SED ON 27-12- 2016. A FURTHER HEARING WAS HELD IN ASSESSMENT ON 3 0-12-2016 WHICH WAS NOTED IN BOTH THE ASSESSING OFFICER'S REMAND RE PORT AND ALSO THE ADDL. CIT, RANGE-3, HYDERABAD FORWARDING REPORT. AP PARENTLY, THE ASSESSMENT ORDER OF THE AO WAS PASSED U/S.143(3) AN D SUBSEQUENTLY FOR THE SAME ASSESSMENT YEAR, A HEARING WAS HELD ON 30-12-2016. THE APPELLANT IN THE COMMENTS TO THE REMAND REPORT ALSO BROUGHT TO NOTE THAT THE ASSESSMENT ORDER WAS PASSED ON 27.12.2016 WHILE THE HEARING WAS HELD ON 30-12-2016. CONSIDERING THE FAC TS, ISSUES AND CIRCUMSTANCES OF THE INSTANT CASE, IT IS HELD THAT THE ASSESSMENT IS BAD IN LAW. HENCE. GROUNDS NO. A AND B IN APPEAL ARE AL LOWED AND THE ASSESSMENT IS HELD TO BE VOID ABINTIO. CONSIDERING THAT THE ASSESSMENT HAS BEEN HELD AS VOID ABINTIO, THE REMAINING GROUND S OF APPEAL ARE ACADEMIC IN NATURE. 4. LEARNED CIT-DR REITERATED THE REVENUES AVERMENT S IN THE GROUNDS THAT THE CIT(A) HAS ERRED IN LAW AND ON FAC TS IN QUASHING THE ASSESSING OFFICER REGULAR ASSESSMENT DT.27.12.2 016 AS AN INVALID ONE THEREBY HOLDING THAT THE LATTER AUTHOR ITY HAD IN FACE HEARD THE ASSESSEE POST FACTO FRAMING THE ABOVE A SSESSMENT. 5. THE ASSESSEES CASE ON THE OTHER HAND IS THAT TH E LEARNED CIT(A) HAS GONE BY THE ASSESSING OFFICERS REMAND R EPORT ITSELF FILED ON 09.02.2018 THAT THE ASSESSEE HAD BEEN HEARD ON 3 0.12.2016 REGARDING VARIOUS ISSUES OF ADVERTISEMENT AND COMMI SSION EXPENSES, BREAK UP OF REVENUE FROM OPERATIONS, DET AILS OF PROJECTS 9 ITA NO.2101/HYD/2018 AND TDS DEDUCTIONS ETC. MR. JITENDRA KUMAR VEHEMENT LY CONTENDED THAT THE REVENUE AS WELL AS THE ASSESSING OFFICER ARE ESTOPPED FROM FILING THE INSTANT APPEAL SINCE THEY OUGHT NOT TO BE HOLD AS AGGRIEVED PARTIES IN VIEW OF THE FAVOURABLE REMAND REPORT AND CASE LAW CIT VS. DM. PURNESH (2020) 426 ITR 169 (KAR) AND SMT. JAYALAKSHMI VS. ACIT (2018) 96 TAXMANN.COM 486 (MAD). LEARNED COUNSEL REITERATED THE FACT THAT THE ASSESS ING OFFICER HAD NOT AFFORDED ADEQUATE OPPORTUNITIES OF HEARING TO A SSESS FROM BEFORE FRAMING REGULAR ASSESSMENT ON 27.12.2016 WHI CH MAKES ITS A PERFECT INSTANCE OF VIOLATION OF PRINCIPLES OF NA TURAL JUSTICE NOT LIABLE TO BE SUSTAINED IN LAW. BOTH THE PARTIES HAVE FILED THEIR RESPECTIVE PAPER BOOKS. THE REVENUES LETTER DATED 28.05.2021 HAS PLACED ON REC ORD ALL THE ASSESSMENT NOTINGS AS WELL AS ANNEXURES AND OTHER DOCUMENTS WHEREAS THE ASSESSEE HAD FILED ITS COMPILATION RUNN ING TO 30 PAGES, RESPECTIVELY. 6. THIS ASSESSEE IS ADMITTEDLY A COMPANY ENGAGED IN CONSTRUCTION, PROPERTY DEVELOPMENT AND CIVIL CONTRA CT BUSINESS. IT ELECTRONICALLY FILED ITS RETURN ON 30.11.2014 DECLA RING TOTAL INCOME OF RS.12,746,020/-. THE ASSESSING OFFICER THEREAFT ER ISSUED 10 ITA NO.2101/HYD/2018 SEC.143(2) NOTICE DT.28.08.2015 FOLLOWED BY HIS RE GULAR ASSESSMENT FRAMED ON 27.12.2016 INTERALIA REGULATIN G BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT THEREBY ESTIMATING 1 5% OF THE ASSESSEES GROSS TURNOVER OF RS.1,35,32,28,849/- COMING TO RS.20,29,84,327/- AS BUSINESS INCOME. 7. THE ASSESSEE FILED APPEAL AGAINST THE FOREGOING REJECTION OF BOOKS AS WELL AS ESTIMATION OF INCOME. THE CIT(A) HAS QUASHED THE IMPUGNED ASSESSMENT AS NOT SUSTAINABLE IN LAW FOR WANT OF ADEQUATE OPPORTUNITY DURING THE SCRUTINY AND ON THE BASIS OF THE FAVOURABLE REMAND REPORT COMING FROM THE ASSESSING AUTHORITYS SIDE. 8. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO OR IGINAL PLEADINGS QUA CORRECTNESS OF CIT(A) UNDER CHALLENG E. WE FIND NO REASON TO AGREE WITH THE ASSESSEES STAND. A PERUS AL OF ASSESSMENT NOTINGS SUFFICIENTLY INDICATES THAT THE ASSESSEES AUTHORISED REPRESENTATIVE HAD PUT IN HIS FIRST APPEARANCE ON 15.09.2015 FOLLOWED BY SUBSEQUENT OPPORTUNITIES / NOTINGS DAT ED 17.06.2016, 24.06.2016 (QUESTIONNAIRE ISSUED), 08.07.2016, 01.1 2.2016 (SECTION.142(1) NOTICE ALONG WITH QUESTIONNAIRE), 0 9.12.2016 (QUESTIONNAIRE HANDED OVER TO AR WITH DETAILED ENQU IRY), 11 ITA NO.2101/HYD/2018 23.12.2016 (COMPREHENSIVE DISCUSSION), 26.12.2016 A ND 27.12.2016 [FRAMING OF SECTION.143(3) ASSESSMENT]; RESPECTIVELY. THE ASSESSING OFFICER RECORDED THE ASSESSEES PRESE NCE THROUGH ITS AUTHORIZED REPRESENTATIVE AND REJECTED THE BOOKS FOL LOWED BY ESTIMATION OF INCOME @ 15% OF THE GROSS SALES. 9. THE VEXED QUESTION THAT ARISES FOR OUR APT ADJUDI CATION IN THIS FACTUAL BACKDROP IS AS TO WHETHER THE IMPUGNED ASSE SSMENT DT.27.12.2016 IS AN INVALID ONE BECAUSE OF THE F ACT THAT THE AO HAD ALLEGEDLY HEARD THE ASSESSEE ON 30.12.2016 OR A FTER HIS SECTION.143(3) ASSESSMENT; AS THE CASE MAY BE OR NO TINGS. OUR ANSWER TO THIS QUESTION IS AGAINST THE ASSESSEE AND IN FAVOUR OF THE DEPARTMENT. WE WISH TO MAKE IT CLEAR SEC.136 OF T HE ACT STIPULATES THAT PROCEEDINGS BEFORE THE INCOME TAX AUTHORITIES ARE JUDICIAL PROCEEDINGS WITHIN THE MEANING OF SEC.193 AND 228 A ND FOR THE PURPOSE OF SEC.196 OF THE INDIAN PENAL CODE (45 OF 1860) AND EVERY INCOME TAX AUTHORITY IS DEEMED TO BE CIVIL COURT AN D .. AND THAT SEC 114(E) OF THE INDIAN EVIDENCE ACT, 1872 ALSO PR OVIDES THAT A COURT MAY PRESUME (E) THAT JUDICIAL AND OFFICIAL A CTS HAVE BEEN REGULARLY PERFORMED. WE PRESUME IN THESE FACTS A ND THAT EVEN IF IT IS TAKEN THAT THE ASSESSING OFFICER HAD GRANTED HEARING TO THE 12 ITA NO.2101/HYD/2018 ASSESSEE ON 30.12.2016 AFTER FRAMING HIS SEC.143(3 ) ASSESSMENT ON 27.12.2016, THE SAME IS HIT BY THE LEGAL MAXIM FUNCTUS OFFICIO IN LIGHT OF HONBLE APEX COURTS DECISION IN SBI VS . S.N. GOYAL (2009) SCC 92 THAT IT IS TRUE THAT ONCE AN AUTHORI TY EXERCISING QUASI JUDICIAL POWER TAKES A FINAL DECISION, IT CANN OT REVIEW ITS DECISION UNLESS THE RELEVANT STATUTE OR RULES PERMI T SUCH REVIEW. BUT THE QUESTION IS TO AT WHAT SUCH AN AUTHORITY BE COME FUNCTUS OFFICIO IN REGARD TO AN ORDER MADE BY HIM. P. RAMNA THA AIYARS ADVANCED LAW LEXICON (3 RD EDITION) VOLUME 2 PP 1946-47) GIVES THE FOLLOWING ILLUSTRATIVE DEFINITION OF THE TERM FUNCTION OFFICIO : THUS A JUDGE, WHEN HE HAS DECIDED A QUESTION BROUGHT BEFORE HIM IS FUNCTUS OFFICIO, AND CANNOT REVIEW HIS OWN DECIS ION. BLACKS LAW DICTIONARY (6 TH EDITION PAGE 673) GIVES ITS MEANING AS FOLLOWS : HAVING FULFILLED THE FUNCTION, DISCHARGED THE OFFI CE, OR ACCOMPLISHED THE PURPOSE, AND THEREFORE OF NO FURTH ER FORCE OR AUTHORITY. 10. WE HOLD IN VIEW OF THE FOREGOING LEGAL PROPOSIT ION THAT ONCE THE ASSESSING OFFICER HEREIN HAD VERY WELL FRAMED HIS ASSESSMENT ON 27.12.2016 AND RECORDED HIS ORDER SHEET TO THIS EFFECT AND SAID ASSESSMENT ORDER WAS ISSUED BY POST, ALL THE SUBSE QUENT 13 ITA NO.2101/HYD/2018 DEVELOPMENTS AT HIS END; INCLUDING THE HEARING THE ASSESSEE ON 30.12.2016 AS PER ASSESSEES STAND WITHOUT TAKING R ECOURSE TO THE REMEDY AVAILABLE I.E., SEC.148 OR 154 OF THE ACT PR OVIDING FOR RE- OPENING AND RECTIFICATION, CARRIES NO SIGNIFICANCE IN LAW. THE SAME THEREFORE COULD NOT FORM THE SOLE BASIS FOR GETTING THE IMPUGNED ASSESSMENT ITSELF QUASHED AS BAD IN THE EYES OF L AW. WE THUS DECLINE THE ASSESSEES ARGUMENTS PLACING RELIANCE O N THE FOREGOING ASSESSMENT NOTINGS IN VIEW OF THE FUNCTUS OFFICIO PRINCIPLE. WE ARE FURTHER OF THE OPINION THAT THE FOREGOING TWIN JUDICIAL PRECEDENTS DEALT WITH PURELY FACTUAL ISSUES REQUIRI NG VERIFICATION IN REMAND PROCEEDINGS THAN RAISING PURE LEGAL QUES TION BEFORE US. THE SAME STAND DISTINGUISHED THEREFORE. THE CIT(A) S FINDINGS UNDER CHALLENGE QUASHING THE IMPUGNED ASSESSMENT AR E REVERSED ACCORDINGLY. HOWEVER, SINCE THE LEARNED CIT(A) HAS NOT ADJUDICATED UPON THE MERITS OF THE ISSUE (SUPRA), WE DIRECT HIM TO DECIDE THE ASSESSEES LOWER APPEAL WITHIN THREE EFFECTIVE OPPO RTUNITIES OF HEARING. ORDERED ACCORDINGLY. 14 ITA NO.2101/HYD/2018 11. THIS REVENUE APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED ON 15 TH DAY OF SEPTEMBER, 2021. SD/- SD/- SD/- (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DT 15.09.2021. *TYNM COPY FORWARDED TO: 1. M/S. SAKET ENGINEERS PRIVATE LIMITED, # 207, 2 ND FLOOR, ASHOKA BHOOPAL CHAMBERS, SP ROAD, BEGUMPET, HYDERABAD. 2. THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 3(1), HYDERABAD. 3. CIT(APPEALS) 3, HYDERABAD. 4. PR.CIT-3, HYDERABAD. 5. D.R. ITAT HYDERABAD 6. GUARD FILE. // C O P Y //// / B BY ORDER