Mrs.Suman C Sanu , Mangalore V. Assistant Commissioner of Income Tax Circle-1(1), Mangalore

ITA 2588/BANG/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3420 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-01-2019
• Assessment Year: misc
• Appeal Filed On: 14-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: EDMOND DSOUZA
• Keywords: Opportunity of being heard; Period of limitation; Capital receipt; Revised return
• Section: 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT ITA NO S . 2588, 2591 & 2592 /BANG/201 8 ASSESSMENT YEAR : 1985 - 86 MRS. SUMANA C. SANU, MARUTHI KRIPA, KURDOLI, ALAKE MANGALURU. PAN: ALQPS 7596G SHRI UMESH SHET, FLOWER MARKET ROAD, CAR STREET, MANGALURU. PAN: BCVPS 9461D SHRI K. MOHAN SHET, GANESH BUILDING, ALAKE, MANGALURU. PAN: DZBPS 0730Q VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), MANGALURU. APP ELLAN T RESPONDENT APP ELLANT BY : SHRI EDMOND DSOUZA, CA RESPONDENT BY : SHRI RAJENDRA CHANDEKAR, JT.CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 30 .01.2019 DATE OF PRONOUNCEMENT : 20 .0 2 . 201 9 ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 2 OF 10 O R D E R ITA NO.2588/BANG/2018 IS AN APPEAL BY THE ASSES SEE, SMT.SUMANA C. SANU, ITA NO.2591/BANG/2018 IS AN APP EAL BY THE ASSSESSEE, SRI UMESH SHET. BOTH THESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 6.5.2018 & 4.5.2018 OF CIT(APPEALS), MA NGALURU, RELATING TO AY 1985-86. ITA NO.2592/BANG/2018 IS AN APPEAL BY THE ASSESSEE, SHRI. K. MOHAN SHET AGAINST AN ORDER DATED 4.5.2018 OF CI T(APPEALS), MANGALURU RELATING TO AY 1985-86. 2. THE ISSUES INVOLVED IN ALL THESE APPEALS ARE IDE NTICAL AND ARISE UNDER IDENTICAL FACTS AND CIRCUMSTANCES. THESE APP EALS WERE HEARD TOGETHER. WE DEEM IT CONVENIENT TO PASS A COMMON O RDER. 3. THERE IS A DELAY OF 38 DAYS, IN FILING ITA NO.25 88/BANG/2018, DELAY OF 37 DAYS IN FILING ITA NO.2591/BANG/2018 AND A DE LAY OF 37 DAYS IN FILING ITA NO.2592/BANG/2018. THE DELAY IN FILING THESE A PPEALS HAVE BEEN EXPLAINED IN AN AFFIDAVIT FILED BY THE RESPECTIVE A SSESSEES AS OWING TO NON- AVAILABILITY OF THEIR COUNSEL MR. EDMOND D SOUZA, C HARTERED ACCOUNTANT, WHO WAS AWAY TO UNITED STATES OF AMERICA (USA) BETW EEN 17.6.2018 AND 20TH AUGUST, 2018. A COPY OF HIS PASSPORT EVIDENCI NG THIS FACT WAS FILED ON BEHALF OF THE ASSESSEES. ALL THESE APPEALS WERE FI LED ON 17.9.2018 WHEREAS THEY OUGHT TO HAVE BEEN FILED WITHIN 60 DAY S FROM THE DATE OF COMMUNICATION OF THE ORDER OF THE CIT(A) TO THE ASS ESSEE, WHICH DATE, IN THE CASE OF ALL THE ASSESSEES WAS 7.6.2018. THE AP PEALS OUGHT TO HAVE BEEN FILED ON OR BEFORE 6.8.2018, BUT WERE FILED ON 17.9.2018 RESULTING IN THE DELAY IN FILING THESE APPEALS BEFORE THE TRIBUN AL. THE REASONS FOR THE DELAY ARE STATED TO BE THAT THE COUNSEL WHO WAS HAN DLING THE TAX MATTERS OF ALL THE THREE ASSESSEES RETURNED FROM USA ON 20.8. 2018. HE STARTED ATTENDING HIS OFFICE ONLY FROM 23.8.2018. HE WAS B USY IN FILING INCOME-TAX ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 3 OF 10 RETURNS OF HIS CLIENTS FOR THE DUE DATE OF 31.8.201 8 AND COULD PREPARE AND FILE THE APPEALS ONLY THEREAFTER BY 17.9.2018. 4. I HAVE CONSIDERED THE REASONS GIVEN FOR THE DELA Y IN FILING THE TWO APPEALS AND AM OF THE VIEW THAT THE CIRCUMSTANCES E XPLAINED IN THE AFFIDAVIT FOR THE BELATED FILING OF TWO APPEALS ARE DUE TO REASONABLE AND DUE TO SUFFICIENT CAUSE. THE DELAY IN FILING THE APPEA LS IS NOT INORDINATE AND THERE IS NO LACK OF BONFIDES ON THE PART OF THE ASS ESSEES AND THEY ARE ALSO NOT GUILTY OF NEGLIGENCE IN HANDLING THEIR AFFAIRS IN THE MATTER OF THESE INCOME TAX PROCEEDINGS. I THEREFORE CONDONE THE DE LAY IN FILING THESE APPEALS. 5. AS FAR AS THE MERITS OF THESE APPEALS ARE CONCER NED, THE FACTUAL DETAILS ARE THAT ALL THE THREE ASSESSEES ARE INDIV IDUALS. THEY FILED THEIR RETURNS OF INCOME FOR AY 1985-86 ON OR BEFORE THE D UE DATE AND THEIR RETURNS WERE ACCEPTED U/S.143(1) OF THE ACT BY THE AO, AS PER THE FOLLOWING DETAILS: (I) MRS.SUMANA C.SANU FILED RETURN OF INCOME ON 1 8.6.1986 DECLARING TOTAL INCOME OF RS. 27,590. AN INTIMATIO N U/S.143(1) OF THE INCOME TAX ACT, 1961(ACT) WAS ISSUED BY THE AO DATED 24.7.1986 ACCEPTING THE TOTAL INCOME DECLARED BY TH E ASSESSEE. (II) MR.UMESH SHET FILED RETURN OF INCOME DECLARI NG TOTAL INCOME OF RS. 26,500. AN INTIMATION U/S.143(1) OF THE INCOME TAX ACT, 1961(ACT) WAS ISSUED BY THE AO DATED 22.7. 1986 ACCEPTING THE TOTAL INCOME DECLARED BY THE ASSESSEE . (III) MR.K.MOHAN SHET, FILED RETURN OF INCOME DECL ARING TOTAL INCOME OF RS. 25,100. AN INTIMATION U/S.143( 1) OF THE INCOME TAX ACT, 1961(ACT) WAS ISSUED BY THE AO DATE D 24.7.1986 ACCEPTING THE TOTAL INCOME DECLARED BY TH E ASSESSEE. 6. ONE CHANDRAKANT P.SANU, AN INDIVIDUAL, WAS ASSES SED TO TAX FOR AY 1985-86 U/S.143(3) OF THE ACT BY AN ORDER DATED 30- 10-1986. THERE WAS A SEARCH IN HIS RESIDENTIAL AND BUSINESS PREMISES U/S .132 OF THE ACT ON ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 4 OF 10 7.4.1988. IN THE COURSE OF SEARCH, AN AGREEMENT DAT ED 26.6.1981 FOR SALE OF THE PROPERTY OWNED BY N. SUBBAN SHIVA RAO AS VEN DOR TO MR.CHANDRAKANTHA P. SANU AND 8 OTHERS VIZ., SMT.SUM ANA C.SANU, M.S.REVANKAR, SRIPAD KRISHNA, P.UMESHSHET, K.MOHAN SHET, K.GOPALAKRISHNA SHET, ARCHANDA A.KUDVA AND SMT.GIRI JA NAYAK, AS PURCHASERS WAS FOUND. AN ADVANCE OF RS.20,000 HAD BEEN PAID UNDER THIS AGREEMENT. ANOTHER AGREEMENT DATED 7.6.1984 WAS AL SO FOUND IN THE COURSE OF SEARCH. UNDER THIS AGREEMENT WHICH IS DE SCRIBED AS DEED OF CANCELLATION, THE EARLIER AGREEMENT DATED 26.6.2018 WAS CANCELLED AND APART FROM RETURN OF ADVANCE PAID, A SUM OF RS.7 LA CS WAS AGREED TO BE PAID ON OR BEFORE 31.3.1985 AS COMPENSATION TO THE PURCHASERS FOR GIVING UP THEIR RIGHTS UNDER THE AGREEMENT. 7. BASED ON THE DOCUMENTS FOUND IN THE COURSE OF SE ARCH, PROCEEDINGS U/S.147 OF THE ACT WERE INITIATED IN THE CASE OF MR .CHANDRAKANTHA P.SANU FOR AY 1985-86. SINCE THE SUM OF RS.7 LACS COMPENS ATION AND RS.20,000 ADVANCE WAS PAID TO ALL THE 9 AGREEMENT HOLDERS, TH EY WERE EXAMINED BY THE AO IN THE ASSESSMENT PROCEEDINGS U/S.147 OF THE ACT INITIATED AGAINST MR.CHANDRKANTHA P.SANU. SOME OF THE AGREEMENT HOLD ERS (PURCHASERS) DENIED THE AGREEMENT. THE AO THEREAFTER INITIATED PROCEEDINGS AGAINST ASSOCIATION OF PERSONS (AOP) COMPRISING OF MR.CHAND RAKANTHA P.SANU AND 8 OTHERS (PURCHASERS). THE AO ASSESSED MR.CHAN DRAKANTH P.SANU THE SUM OF RS.7 LACS SUBSTANTANTIVELY IN HIS HANDS BY AN ORDER OF ASSESSMENT DATED 14.3.1990 AND PROTECTIVELY IN THE HANDS OF AOP COMPRISING OF MR.CHANDRAKANTHA P. SANU AND 8 OTHERS . 8. MR.CHANDRAKANTHA P. SANU FILED APPEAL AGAINST TH E ORDER OF ASSESSMENT DATED 14.3.1990 AND THE FIRST APPELLATE AUTHORITY BY ORDER DATED 13.9.2000 HELD THAT THE SUM OF RS.7 LACS RECE IVED WAS CAPITAL RECEIPT NOT CHARGEABLE TO TAX. ON FURTHER APPEAL BY THE RE VENUE AGAINST THE ORDER ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 5 OF 10 OF THE FIRST APPELLATE AUTHORITY BEFORE THE INCOME TAX APPELLATE TRIBUNAL (ITAT), THE ITAT IN ITA NO.14/BANG/2001 BY ORDER DA TED 23.4.2004 CONFIRMED THE ORDER OF THE FIRST APPELLATE AUTHORIT Y. AGAINST THE SAID ORDER OF THE TRIBUNAL, THE REVENUE FILED APPEAL BEFORE TH E HONBLE KARNATAKA HIGH COURT IN ITA NO.536/2004 ORDER DATED 30.5.2011, WHE REIN IT WAS HELD THAT THE SUM OF RS.7 LACS IS ASSESSABLE TO TAX AS INCOME AND HAS TO BE ASSESSED EQUALLY IN THE HANDS OF MR.CHANDRAKANTHA P .SANU AND 8 OTHER PURCHASERS. THE FOLLOWING WERE THE RELEVANT OBSERV ATIONS OF THE HONBLE HIGH COURT:- ACCORDINGLY, BOTH THE QUESTIONS OF LAW ARE ANSWER ED AND HOLD THAT THE INCOME OF RS.7 LAKHS AS RECEIVED BY T HE ASSESSEE AND EIGHT OTHERS TO BE CAPITAL GAIN IN THEIR INDIVIDUAL CAPACITY AND THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL D ATED 23-4- 2004 CONFIRMING THE ORDER PASSED BY THE APPELLATE A UTHORITY TO THAT EXTENT IS SET ASIDE. THE APPEAL IS ALLOWED AN D THE ASSESSEE SHALL COMPUTE THE TAX PAYABLE ON THE INCOME OF RS.7 LAKHS INDIVIDUALLY BY EACH OF THE AGREEMENT HOLDERS AFTER GIVING PROPER DEDUCTIONS UNDER SECTION 48 OF THE ACT AND OTHER PR OVISIONS OF THE ACT REGARD TAX ON CAPITAL GAIN. 9. THE ASSESSEES IN THESE APPEALS BEFORE THE TRIBUN AL ARE PURCHASERS IN THE DEED OF CANCELLATION UNDER WHICH THE SUM OF RS.7 LACS WAS RECEIVED AS COMPENSATION BY THE PURCHASERS FOR GIVING UP THE IR RIGHTS UNDER THE AGREEMENT FOR SALE. THE AO INITIATED PROCEEDINGS U /S.147 OF THE ACT AGAINST ALL THE THREE ASSESSEES IN THESE APPEALS B Y ISSUE OF NOTICE U/S.148 OF THE ACT ON 28.3.2012. BY ORDER DATED 28.12.2012 , A SUM OF A SUM OF RS.77,780/- WHICH IS 1/9TH OF THE SUM OF RS.7 LACS, WAS BROUGHT TO TAX IN THE HANDS OF EACH OF THE ASSESSEES IN THESE APPEALS. T HE SAID ORDER OF ASSESSMENT WAS CONFIRMED BY THE CIT(APPEALS) IN THE IMPUGNED ORDERS. AGGRIEVED BY THE ORDERS OF THE REVENUE AUTHORITIES, THE ASSESSEES ARE IN APPEAL BEFORE THE TRIBUNAL. ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 6 OF 10 10. THE CONTENTION OF THE ASSESSEE IS THAT THE PROC EEDINGS FOR REASSESSMENT OF INCOME ESCAPING ASSESSMENT INITIATE D U/S.147 OF THE ACT AND THE NOTICE ISSUED U/S.148 OF THE ACT IN THE CAS E OF THE THREE ASSESSEES FOR AY 1985-86 ARE BARRED BY LIMITATION. THIS ASPE CT IS NOT DISPUTED BY THE REVENUE. THE REVENUE, HOWEVER, SEEKS TO RELY ON TH E PROVISIONS OF SEC.150(1) OF THE ACT READ WITH EXPLANATION-3 TO SE C.153 OF THE ACT READ WITH CLAUSE(II) TO SUB-SECTION 3 OF SEC.153 OF THE ACT TO CONTEND THAT THE ORDERS IN QUESTION ARE PASSED TO GIVE EFFECT TO A D IRECTION CONTAINED IN THE ORDER OF THE APPELLATE AUTHORITIES UNDER THE ACT FO R DOING SO, THERE IS NO TIME LIMIT. 11. THE RELEVANT STATUTORY PROVISIONS READ THUS:- PROVISION FOR CASES WHERE ASSESSMENT IS IN PURSUAN CE OF AN ORDER ON APPEAL, ETC. 150. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECT ION 149, THE NOTICE UNDER SECTION 148 MAY BE ISSUED AT ANY TIME FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT OR RECOMPUTATION IN CONSEQUENCE OF OR TO GIVE EFFECT T O ANY FINDING OR DIRECTION CONTAINED IN AN ORDER PASSED BY ANY AU THORITY IN ANY PROCEEDING UNDER THIS ACT BY WAY OF APPEAL, REFEREN CE OR REVISION OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LAW . (2) THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APP LY IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RECOMPUT ATION AS IS REFERRED TO IN THAT SUB-SECTION RELATES TO AN ASSES SMENT YEAR IN RESPECT OF WHICH AN ASSESSMENT, REASSESSMENT OR REC OMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER WHIC H WAS THE SUBJECT-MATTER OF THE APPEAL, REFERENCE OR REVISION , AS THE CASE MAY BE, WAS MADE BY REASON OF ANY OTHER PROVISION L IMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSMENT, REASSE SSMENT OR RECOMPUTATION MAY BE TAKEN. 153. (1) NO ORDER OF ASSESSMENT SHALL BE MADE UNDER SECTION 143 OR SECTION 144 AT ANY TIME AFTER THE EXPIRY OF ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 7 OF 10 (A) TWO YEARS FROM THE END OF THE ASSESSMENT YEAR I N WHICH THE INCOME WAS FIRST ASSESSABLE ; OR (B) ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH A RETURN OR A REVISED RETURN RELATING TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSES SMENT YEAR, IS FILED UNDER SUB-SECTION (4) OR SUB-SECTION (5) OF S ECTION 139, WHICHEVER IS LATER : PROVIDED (2) NO ORDER OF ASSESSMENT, REASSESSMENT OR RECOMPU TATION SHALL BE MADE UNDER SECTION 147 AFTER THE EXPIRY OF ONE Y EAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE NOTICE UNDER SECTION 148 WAS SERVED : PROVIDED . (3) THE PROVISIONS OF SUB-SECTIONS (1), (1A), (1B) AND (2) SHALL NOT APPLY TO THE FOLLOWING CLASSES OF ASSESSMENTS, REASSESSMENTS AND RECOMPUTATIONS WHICH MAY, SUBJECT TO THE PROVIS IONS OF SUB- SECTION (2A), BE COMPLETED AT ANY TIME (I) [***] (II) WHERE THE ASSESSMENT, REASSESSMENT OR RECOMPUT ATION IS MADE ON THE ASSESSEE OR ANY PERSON IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER U NDER SECTION 250, 254, 260, 262, 263, OR 264 OR IN AN ORDER OF A NY COURT IN A PROCEEDING OTHERWISE THAN BY WAY OF APPEAL OR REFER ENCE UNDER THIS ACT ; (III) EXPLANATION 3.WHERE, BY AN ORDER REFERRED TO IN CL AUSE (II) OF SUB-SECTION (3), ANY INCOME IS EXCLUDED FROM THE TO TAL INCOME OF ONE PERSON AND HELD TO BE THE INCOME OF ANOTHER PER SON, THEN, AN ASSESSMENT OF SUCH INCOME ON SUCH OTHER PERSON SHAL L, FOR THE PURPOSES OF SECTION 150 AND THIS SECTION, BE DEEMED TO BE ONE MADE IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FIN DING OR DIRECTION CONTAINED IN THE SAID ORDER, PROVIDED SUC H OTHER PERSON ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 8 OF 10 WAS GIVEN AN OPPORTUNITY OF BEING HEARD BEFORE THE SAID ORDER WAS PASSED. 12. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CONCLUSIONS OF THE CIT(A) ARE NOT CORRECT AND LEGAL LY SUSTAINABLE. HE SUBMITTED THAT THE PROVISIONS OF CLAUSE(II) TO SUB- SECTION-3 OF SEC.153 OF THE ACT OR SEC.150(1) OF THE ACT WOULD BE ATTRACTED ONLY WHEN THE PERSON CONCERNED, THE ASSESSEES IN THE PRESENT CASE WERE GIVEN OPPORTUNITY OF BEING HEARD BEFORE THE ORDER IS PASSED. HE SUBMITT ED THAT THE ASSESSEES IN THESE APPEALS WERE NOT PARTIES TO THE PROCEEDING S BEFORE THE HONBLE HIGH COURT AND THEREFORE AFORESAID PROVISIONS ARE N OT ATTRACTED AT ALL. HIS NEXT SUBMISSION WAS THAT THERE IS NO FINDING OR DIR ECTION GIVEN BY THE HONBLE HIGH COURT VIS--VIS THESE ASSESSEES. HE P LACED RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF RURAL ELECTRIFICATION CORPORATION LTD. VS. CIT (2013) 34 TAXMANN.COM 197 (DEL.) WHEREIN ON IDENTICAL ISSUE, THE HONBLE DELHI HIGH COURT HELD THAT EXPLN.3 TO SEC.153(3) WOULD COME INTO PLAY ONLY WHEN PERSON AG AINST WHOM PROCEEDINGS ARE INITIATED WITHOUT THE BAR OF LIMITA TION U/S.149 OF THE ACT WAS GIVEN AN OPPORTUNITY OF BEING HEARD. THE FOLLOWING OBSERVATIONS OF THE HONBLE COURT WERE BROUGHT TO MY NOTICE. 14. IT IS APPARENT FROM THE SAID DECISION THAT BEF ORE A NOTICE UNDER SECTION 148 CAN BE ISSUED BEYOND THE TIME LIM ITS PRESCRIBED UNDER SECTION 149, THE INGREDIENTS OF EX PLANATION 3 TO SECTION 153 HAVE TO BE SATISFIED. THOSE INGREDIENTS REQUIRE THAT THERE MUST BE A FINDING THAT INCOME WHICH IS EXCLUD ED FROM THE TOTAL INCOME OF ONE PERSON MUST BE HELD TO BE INCOM E OF ANOTHER PERSON. THE SECOND INGREDIENT BEING THAT BEFORE SUC H A FINDING IS RECORDED, SUCH OTHER PERSON SHOULD BE GIVEN AN OPPO RTUNITY OF BEING HEARD. IN THE CONTEXT OF THE PRESENT CASE, WH EN THE TRIBUNAL HELD IN FAVOUR OF THE SAID SOCIETY BY CONCLUDING TH AT THE INTEREST INCOME WAS NOT TAXABLE IN ITS HANDS AND HELD AGAINS T THE PETITIONER BY CONCLUDING THAT THE SAID INTEREST INC OME OUGHT TO ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 9 OF 10 HAVE BEEN TAXED IN THE HANDS OF THE PETITIONER, AN OPPORTUNITY OF HEARING OUGHT TO HAVE BEEN GIVEN TO THE PETITIONER. THE FACT THAT SUCH AN OPPORTUNITY WAS NOT GIVEN, HAS BEEN RECOGNI ZED BY THE REVENUE IN THE ORDER DISPOSING OF THE OBJECTIONS DA TED 20.10.2011, WHERE IT HAS BEEN OBSERVED THAT THERE W AS NO NEED TO HAVE AFFORDED AN OPPORTUNITY TO THE PETITIONER. EVE N IN THE COUNTER AFFIDAVIT, THE REVENUE HAS TAKEN THE STAND THAT IT WAS NOT AT ALL NECESSARY FOR THE INCOME TAX APPELLATE TRIBU NAL TO HAVE ALLOWED AN OPPORTUNITY OF HEARING TO THE PETITIONER BECAUSE THAT WAS IN RESPECT OF THE ASSESSMENT PROCEEDINGS PERTAI NING TO THE SAID SOCIETY. FROM THE ABOVE, IT IS CLEAR THAT NO OPPORTUNITY OF HEARING WAS GIVEN TO THE PETITIONER PRIOR TO THE PASSING OF THE ORDER DATED 13.01.2010 BY THE INCOME TAX APPELLATE TRIBUNAL, HY DERABAD IN THE CASES OF THE SAID SOCIETY. AS SUCH, ONE ESSENTI AL INGREDIENT OF EXPLANATION 3 WAS MISSING AND, THEREFORE, THE DEEMI NG CLAUSE WOULD NOT GET TRIGGERED. THAT BEING THE POSITION, S ECTION 150 WOULD NOT APPLY AND, THEREFORE, THE BAR OF LIMITATI ON PRESCRIBED BY SECTION 149 IS NOT LIFTED. 13. THE LEARNED DR RELIED ON THE ORDER OF THE CIT(A PPEALS). 14. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. I AM OF THE VIEW THAT THE PROVISIONS OF SEC.153(3)(II) OF THE ACT CA NNOT SAVE LIMITATION IN THE PRESENT CASE. THE ORDER OF THE HONBLE HIGH COURT HAS BEEN EXTRACTED IN THE EARLIER PART OF THIS ORDER. IT IS UNDISPUTED T HAT THE ASSESSEES WERE NOT PARTIES BEFORE THE HONBLE HIGH COURT NOR WERE THEY HEARD BEFORE THE DECISION OF THE HONBLE COURT WAS RENDERED. IN THE CIRCUMSTANCES, EXPLANATION 3 TO SEC.153(3) READ WITH SEC.153(3)(II ) OF THE ACT CANNOT COME TO THE RESCUE OF THE REVENUE BECAUSE THE CONDI TION LAID DOWN IN EXPLANATION 3 THAT THE ASSESSEES SHOULD HAVE BEEN H EARD BEFORE THE ORDER, BASED ON WHICH THE PERIOD OF LIMITATION IS S OUGHT TO BE OVERLOOKED, WAS PASSED IS NOT SATISFIED. I THEREFORE HOLD TH AT THE INITIATION OF ASSESSMENT PROCEEDINGS U/S.147 OF THE ACT, ISSUE OF NOTICE U/S.148 OF THE ITA NOS. 2588, 2591 & 2592/BANG/2018 PAGE 10 OF 10 ACT AND THE ORDERS OF ASSESSMENTS IN THE CASE OF TH ESE ASSESSEES ARE BARRED BY TIME AND THEREFORE THOSE ORDERS ARE ANNUL LED. 15. IN THE RESULT, THE APPEALS BY THE ASSESSEES AR E ALLOWED PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF FEBRUARY, 2019. SD/- ( N.V. VASUDEVAN ) VICE PRESIDENT BANGALORE, DATED, THE 20 TH FEBRUARY, 2019. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.