Asst. Commissioner of Income Tax, Central Circle-2(4), Hyderabad V. MSR Constructions , Khammam

ITA 2149/Hyd/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4807 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Hyderabad
• Next Hearing Date: 06-04-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 06-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y.V.S.T. SAI
• Assessee Lawyers: M. CHANDRAMOULESWARA RAO
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 133A; 153A; 201; 13; 158BD; 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NOS. 2148, 2149 & 2150/HYD/2018 ASSESSMENT YEARS: 2014-15, 2015-16 & 2016-17 ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(4), HYDERABAD VS M/S.MSR CONSTRUCTIONS, KHAMMAM [PAN: AATFM3957H] (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI Y.V.S.T.SAI, CIT-DR FOR ASSESSEE : SHRI M.CHANDRAMOULESWARA RAO, AR DATE OF HEARING : 06-04-2021 DATE OF PRONOUNCEMENT : 10-05-2021 O R D E R PER S.S.GODARA, J.M. : THESE THREE REVENUES APPEALS FOR AYS.2014-15 TO 201 6- 17 ARISE FROM THE CIT(A)-12 HYDERABADS ORDER(S) ALL DATED 23-08-2018, PASSED IN APPEAL NOS.10453, 10456 & 10460/2017-18; RESPECTIVELY IN PROCEEDINGS U/S.143( 3) R.W.S.153C OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH PARTIES. CASE FILES PERUSED. 2. THE REVENUES IDENTICAL SOLE SUBSTANTIVE GROUND PLE ADED IN ALL THESE APPEALS SEEMS TO REVERSE THE CIT(A)S ACTI ON QUASHING SECTION 153C PROCEEDINGS ON THE GROUND THAT THE ASSESSING OFFICER; COMMON FOR BOTH THE SEARCHED AS W ELL AS THE ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 2 -: INSTANT ASSESSEE, FAILED TO RECORD THE TWIN SATISFACTION (S) AS PER THE CBDT CIRCULAR NO.24/2015, DT.31-12-2015. RELEVANT LOWER APPEAL DISCUSSION TO THIS EFFECT READS AS FOLLOW S: ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 3 -: ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 4 -: ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 5 -: ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 6 -: ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 7 -: ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 8 -: ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 9 -: 3. WE HAVE HEARD RIVAL SUBMISSIONS AGAINST AND IN SU PPORT OF THE CIT(A)S IMPUGNED ACTION QUASHING SECTION 153C ASSESSMENT IN THE INSTANT THREE CASES. THE REVENUES VEHEMENT CONTENTION IS THAT SINCE THE ASSESSING AUTHORI TY HEREIN IS COMMON FOR BOTH THE SEARCHED AS WELL AS THE INSTANT ASSESSEE, THE TWIN SATISFACTION CLAIMED AT THE LATTERS BE HEST FORMS NO GROUND TO QUASH THE SAME. 4. LEARNED AUTHORISED REPRESENTATIVES CASE, ON THE O THER HAND, IS THAT THE CIT(A) HAS RIGHTLY GONE BY THE CBDT C IRCULAR MAKING IT CLEAR THAT THE ASSESSING OFFICER HAS TO RECORD SEPARATE SATISFACTION(S) QUA THE SEARCHED AS WELL AS THE THIRD PARTY IN ISSUE AS IS THE CLINCHING FACT IN THE INSTANT C ASE. 5. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE FOREGOING RIVAL CONTENTIONS QUA THE LEGALITY OF SECTION 153C PROCEEDINGS. WE FIND THAT THE HON'BLE APEX COURTS LATE ST DECISION IN CIVIL APPEALS NOS.2006-2007 OF 2020, M/ S.SUPER MALLS PVT. LTD., VS. PCIT, DT.05-03-2020 HAS SETTLED THE LAW ON THE ISSUE OF THE ASSESSING OFFICER BEING COMMON IN THE SEARCHED AS WELL AS THIRD PARTY THAT THE TWIN ROUND(S) OF SATISFACTION IS NOWHERE MANDATORY AFTER CONSIDERING CB DTS CIRCULAR (SUPRA) AS FOLLOWS: 5. WE HAVE HEARD THE LEARNED COUNSEL FOR THE RESPE CTIVE PARTIES AT LENGTH. 5.1 AS OBSERVED HEREINABOVE, THE SHORT QUESTION WHI CH IS POSED FOR THE CONSIDERATION OF THIS COURT IS, WHETHER THERE I S A COMPLIANCE OF THE PROVISIONS OF SECTION 153C OF THE ACT BY THE ASSESS ING OFFICER AND ALL THE CONDITIONS WHICH ARE REQUIRED TO BE FULFILLED B EFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT HAVE BEEN SATISFIED OR NOT? ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 10 -: 6. THIS COURT HAD AN OCCASION TO CONSIDER THE SCHEM E OF SECTION 153C OF THE ACT AND THE CONDITIONS PRECEDENT TO BE FULFI LLED/COMPLIED WITH BEFORE ISSUING NOTICE UNDER SECTION 153C OF THE ACT IN THE CASE OF CALCUTTA KNITWEARS (SUPRA) AS WELL AS BY THE DELHI HIGH COURT IN THE CASE OF PEPSI FOOD PVT. LTD. (SUPRA). AS HELD, BEFO RE ISSUING NOTICE UNDER SECTION 153C OF THE ACT, THE ASSESSING OFFICE R OF THE SEARCHED PERSON MUST BE SATISFIED THAT, INTER ALIA, ANY DO CUMENT SEIZED OR REQUISITIONED BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON. THAT THEREAFTER, AFTER RECORDING SUCH SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON, HE MAY TRANSMIT THE RECORDS/DOCUMENTS/THINGS/PAPERS ETC. TO THE ASSESSI NG OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. AFTER R ECEIPT OF THE AFORESAID SATISFACTION AND UPON EXAMINATION OF SUCH OTHER DOCUMENTS RELATING TO SUCH OTHER PERSON, THE JURISDICTIONAL A SSESSING OFFICER MAY PROCEED TO ISSUE A NOTICE FOR THE PURPOSE OF COMPLE TION OF THE ASSESSMENT UNDER SECTION 158BD OF THE ACT AND THE O THER PROVISIONS OF CHAPTER XIV-B SHALL APPLY. 6.1 IT CANNOT BE DISPUTED THAT THE AFORESAID REQUIR EMENTS ARE HELD TO BE MANDATORILY COMPLIED WITH. THERE CAN BE TWO EVEN TUALITIES. IT MAY SO HAPPEN THAT THE ASSESSING OFFICER OF THE SEARCHE D PERSON IS DIFFERENT FROM THE ASSESSING OFFICER OF THE OTHER P ERSON AND IN THE SECOND EVENTUALITY, THE ASSESSING OFFICER OF THE SE ARCHED PERSON AND THE OTHER PERSON IS THE SAME. WHERE THE ASSESSING O FFICER OF THE SEARCHED PERSON IS DIFFERENT FROM THE ASSESSING OFF ICER OF THE OTHER PERSON, THERE SHALL BE A SATISFACTION NOTE BY THE A SSESSING OFFICER OF THE SEARCHED PERSON AND AS OBSERVED HEREINABOVE THA T THEREAFTER THE ASSESSING OFFICER OF THE SEARCHED PERSON IS REQUIRE D TO TRANSMIT THE DOCUMENTS SO SEIZED TO THE ASSESSING OFFICER OF THE OTHER PERSON. THE ASSESSING OFFICER OF THE SEARCHED PERSON SIMULTANEO USLY WHILE TRANSMITTING THE DOCUMENTS SHALL FORWARD HIS SATISF ACTION NOTE TO THE ASSESSING OFFICER OF THE OTHER PERSON AND IS ALSO R EQUIRED TO MAKE A NOTE IN THE FILE OF A SEARCHED PERSON THAT HE HAS D ONE SO. HOWEVER, AS RIGHTLY OBSERVED AND HELD BY THE DELHI HIGH COURT I N THE CASE OF GANPATI FINCAP (SUPRA), THE SAME IS FOR THE ADMINIS TRATIVE CONVENIENCE AND THE FAILURE BY THE ASSESSING OFFICE R OF THE SEARCHED PERSON, AFTER PREPARING AND DISPATCHING THE SATISFA CTION NOTE AND THE DOCUMENTS TO THE ASSESSING OFFICER OF THE OTHER PER SON, TO MAKE A NOTE IN THE FILE OF A SEARCHED PERSON, WILL NOT VIT IATE THE ENTIRE PROCEEDINGS UNDER SECTION 153C OF THE ACT AGAINST T HE OTHER PERSON. AT THE SAME TIME, THE SATISFACTION NOTE BY THE ASSE SSING OFFICER OF THE SEARCHED PERSON THAT THE DOCUMENTS ETC. SO SEIZED D URING THE SEARCH AND SEIZURE FROM THE SEARCHED PERSON BELONGED TO TH E OTHER PERSON AND TRANSMITTING SUCH MATERIAL TO THE ASSESSING OFF ICER OF THE OTHER PERSON IS MANDATORY. HOWEVER, IN THE CASE WHERE THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS THE SAME, IT IS ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 11 -: SUFFICIENT BY THE ASSESSING OFFICER TO NOTE IN THE SATISFACTION NOTE THAT THE DOCUMENTS SEIZED FROM THE SEARCHED PERSON BELON GED TO THE OTHER PERSON. ONCE THE NOTE SAYS SO, THEN THE REQUIREMENT OF SECTION 153C OF THE ACT IS FULFILLED. IN CASE, WHERE THE ASSESSI NG OFFICER OF THE SEARCHED PERSON AND THE OTHER PERSON IS THE SAME, T HERE CAN BE ONE SATISFACTION NOTE PREPARED BY THE ASSESSING OFFICER , AS HE HIMSELF IS THE ASSESSING OFFICER OF THE SEARCHED PERSON AND AL SO THE ASSESSING OFFICER OF THE OTHER PERSON. HOWEVER, AS OBSERVED H EREINABOVE, HE MUST BE CONSCIOUS AND SATISFIED THAT THE DOCUMENTS SEIZED/RECOVERED FROM THE SEARCHED PERSON BELONGED TO THE OTHER PERS ON. IN SUCH A SITUATION, THE SATISFACTION NOTE WOULD BE QUA THE O THER PERSON. THE SECOND REQUIREMENT OF TRANSMITTING THE DOCUMENTS SO SEIZED FROM THE SEARCHED PERSON WOULD NOT BE THERE AS HE HIMSELF WI LL BE THE ASSESSING OFFICER OF THE SEARCHED PERSON AND THE OT HER PERSON AND THEREFORE THERE IS NO QUESTION OF TRANSMITTING SUCH SEIZED DOCUMENTS TO HIMSELF. 6.2. NOW LET US CONSIDER FROM THE SATISFACTION NOTE RECORDED BY THE ASSESSING OFFICER, IN THE PRESENT CASE. WHETHER THE RE IS A SUFFICIENT COMPLIANCE OF SECTION 153C OF THE ACT OR NOT. THE S ATISFACTION NOTE READS AS UNDER: NAME AND ADDRESS OF THE ASSESSEE : M/S SUPER MALLS (P) LTD. SECTOR 12, HUDA, KARNAL REGD. OFFICE AT 51, TRANSPORT CENTRE PUNJABI BAGH, NEW DELHI. PAN : AAICS2163F STATUS : COMPANY REASONS/SATISFACTION NOTE FOR TAKING UP THE CASE OF M/S SUPER MALLS (P) LTD. SECTOR-12, HUDA, KARNAL REGD. OFFICE AT 51 , TRANSPORT CENTRE, PUNJABI BAGH, NEW DELHI UNDER SECTION 153C OF THE I NCOME TAX ACT, 1961. THE JURISDICTION OF THIS CASE HAS BEEN ASSIGNED TO THIS OFFICE U/S 127 OF THE INCOME TAX ACT, 1961 BY THE WORTHY COMMISSIO NER OF INCOME TAX-III NEW DELHI VIDE ORDER F. NO.CITIII/DELHI/ CE NTRALIZATION/1012- 1312455 DATED 15.01.2013. BY VIRTUE OF THE AUTHORI ZATION OF THE DIRECTOR OF INCOME TAX (INVESTIGATION), CHANDIGARH, A SEARCH & SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CARRIED OUT ON 08/09.04.2010 AT THE RESIDENTIAL/BUSINESS PREMISES OF SH. TEJWANT SI NGH & SH. VED PARKASH BHARTI GROUP OF CASES, KARNAL, PANIPAT & DE LHI AND A SURVEY U/S 133A OF THE IT. ACT, 1961 WAS ALSO CARRIED OUT AT THE BUSINESS PREMISES OF M/S SUPER MALL (P) LTD. KARNAL & NEW DE LHI. DURING THE COURSE OF SEARCH ON 08/09.04.2010 AT RESIDENCE OF S H. VED PARKASH BHARTI WHO IS A DIRECTOR IN THE ASSESSEE COMPANY M/ S SUPER MALL (P) LTD., PEN DRIVES WERE FOUND AND SEIZED AS PER ANNEX URE-3 FROM VEHICLE NO. HR06N-0063 PARKED IN FRONT OF THE RESID ENCE OF SH. VED ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 12 -: PARKASH BHARTI. SOME DOCUMENTS AS PER ANNEXURE A-1 WERE SEIZED AFTER TAKING PRINT OUT OF THE ABOVE SAID PEN DRIVES . THESE DOCUMENTS CONTAIN THE DETAILS OF CASH RECEIPT ON SALE OF SHOP /OFFICES AT M/S SUPER MALL, KARNAL ALSO BESIDE OTHER CONCERNS. THES E DOCUMENTS ARE REQUIRED FOR ASSESSMENT PROCEEDINGS. DURING THE STA TEMENT OF SH. VED PARKASH BHARTI AT THE TIME OF SEARCH, HE HAS ALSO S TATED THAT THESE DOCUMENTS PERTAIN TO HIM AND M/S SUPER MALL (P) LTD ., KARNAL IN WHICH HE IS DIRECTOR. IN VIEW OF THE ABOVE AND AS P ER THE PROVISIONS OF SUB-SECTION 91 OF SECTION 153C OF THE ACT, I AM SAT ISFIED THAT THE DOCUMENT SEIZED FROM THE RESIDENCE OF SH. VED PARKA SH BHARTI BELONGS TO A PERSON I.E. SUPER MALL (P) LTD., OTHER THAN THE PERSON REFERRED IN SECTION 153A. ACCORDINGLY, IT IS DIRECT ED TO ISSUE SUCH PERSON (M/S SUPER MALL (P) LTD.) NOTICE AND ASSESS AND REASSESS INCOME IN ACCORDANCE WITH THE PROVISION OF SECTION 153A OF THE ACT. DATED: 22.02.2013 SD/- (VED PARKASH KALIA) FROM THE AFORESAID SATISFACTION NOTE, IT EMERGES TH AT THE ASSESSING OFFICER IS SATISFIED THAT THE DOCUMENTS CONTAINING THE DETAILS OF THE CASH RECEIPTS ON SALE OF SHOP/OFFICES AT M/S SUPER MALL, KARNAL BELONGED TO THE OTHER PERSON ASSESSEE M/S SUPER MALL. HE IS ALSO SATISFIED THAT THE DOCUMENTS/PEN DRIVE ARE SEIZED F ROM THE SEARCHED PERSON. HE IS ALSO SATISFIED THAT THE DOCUMENTS SO SEIZED FROM THE RESIDENCE OF THE SEARCHED PERSON/VED PRAKASH BHARTI BELONGED TO THE ASSESSEE THE OTHER PERSON. THEREFORE, THE ASSESSING OFFICER WAS SATISFIED AND IT IS SPECIFICALLY MENTIONED THAT THE DOCUMENTS SO SEIZED BELONGED TO THE ASSESSEE THE OTHER PERSON. THEREFORE, IT CANNOT BE SAID THAT THE MANDATORY REQUIREMENTS OF SECTION 153C OF THE ACT, IN THE FAC TS AND CIRCUMSTANCES OF THE CASE, HAVE NOT BEEN COMPLIED W ITH. THE SATISFACTION NOTE BY THE ASSESSING OFFICER CLEARLY STATES THAT THE DOCUMENTS SO SEIZED BELONGED TO THE OTHER PERSON THE ASSESSEE AND NOT THE SEARCHED PERSON. THUS, THE HIGH COURT IS JU STIFIED IN OBSERVING THAT THE REQUIREMENT OF SECTION 153C HAS BEEN FULFI LLED. ON FACTS, WE ARE IN COMPLETE AGREEMENT WITH THE VIEW TAKEN BY TH E HIGH COURT ON THE REQUIREMENT OF SECTION 153C OF THE ACT BEING FU LFILLED BY THE ASSESSING OFFICER BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 153C OF THE ACT. 7. IN VIEW OF THE ABOVE AND FOR THE REASONS STATED ABOVE, ALL THESE APPEALS FAIL AND THE SAME DESERVE TO BE DISMISSED A ND ARE ACCORDINGLY DISMISSED. NOW, THE LEARNED ITAT SHALL DECIDE AND DISPOSE OF THE APPEALS AFRESH ON MERITS, AT THE EAR LIEST, IN ACCORDANCE WITH LAW, AS OBSERVED BY THE HIGH COURT IN THE IMPU GNED JUDGMENT(S) AND ORDER(S). ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 13 -: 5.1. IT IS THEREFORE CLEAR THAT THE INSTANT ISSUE OF TWIN SATISFACTIONS IN CASE OF THE COMMON ASSESSING OFFICER ASSESSING BOTH THE SEARCHED AS WELL AS THE THIRD PARTY; STANDS SETTLED AGAINST THE ASSESSEE AND IN FAVOUR OF THE DEPARTM ENT. WE THEREFORE ADOPT THE ABOVE DETAILED REASONING MUTATIS MUTANDIS TO ALLOW THE REVENUES IDENTICAL SOLE SUBSTANTIVE GRIEVANCE RAISED IN THESE THREE APPEALS. THE CIT(A) S ORDER QUASHING THE IMPUGNED ASSESSMENT ON IDENTICAL LINES STANDS REVERSED THEREFORE. WE FURTHER KEEP IN MIND THE FACT THA T THE CIT(A) HAS NOT DEALT WITH THE ASSESSEES GRIEVANCE(S) ON MERITS AND DIRECT HIM TO DECIDE THE SAME AFRESH WITHIN THREE EFFECTIVE OPPORTUNITIES OF HEARING. THE ASSESSEE OR ITS AUTHOR ISED REPRESENTATIVE SHALL APPEAR BEFORE THE CIT(A) ON OR BE FORE 30-09-2021 WITH ALL THE RELEVANT DETAILS AND EVIDENCES TO BE FOLLOWED BY THREE EFFECTIVE OPPORTUNITIES OF HEARING; AT ITS OWN RISK AND RESPONSIBILITY. 6. THESE REVENUES APPEALS ARE TREATED AS ALLOWED FO R STATISTICAL PURPOSES IN ABOVE TERMS. A COPY OF THIS CO MMON ORDER BE PLACED IN THE RESPECTIVE CASE FILES. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH MAY, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 10-05-2021 TNMM ITA NOS. 2148, 2149 & 2150/HYD/2018 :- 14 -: COPY TO : 1.ASST.COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2 (4), HYDERABAD. 2.M/S.MSR CONSTRUCTIONS, 6-1-44/1, VDOS COLONY, KHAMMAM. 3.CIT(APPEALS)-12, HYDERABAD. 4.PR.CIT(CENTRAL), HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.