A Krishna (Individual), Secunderabad V. Dy.CIT, Central Circle-5, Hyderabad

ITA 32/HYD/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9010 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Keywords: Search and seizure; Documents seized
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.31 & 32/HYD/2014 ASSESSMENT YEARS 2008-2009 & 2009-2010 MR. A. KRISHNA (INDIVIDUAL) SECUNDERABAD. PAN A DIPA5877A VS. DCIT, CENTRAL CIRCLE - 5 HYDERABAD. (APP ELL ANT) (RESPONDENT) ITA.NO.33 & 34/HYD/2014 ASSESSMENT YEARS 2008-2009 & 2009-2010 SMT. A. MAMATHA (INDIVIDUAL) HYDERABAD. PAN APIPA7426B VS. DCIT, CENTRAL CIRCLE - 5 HYDERABAD. (APP EL LANT) (RESPONDENT) FOR ASSESSEE : MR. K.C. DEVDAS FOR REVENUE : MR. B. KURMI NAIDU DATE OF HEARING : 09 .0 2 .2016 DATE OF PRONOUNCEMENT : 09 .0 2 .2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THESE ARE THE APPEALS OF THE ASSESSEES FOR THE A.YS. 2008-09 AND 2009-10 RESPECTIVELY. BOTH THE ASSESSEES ARE RELATED TO EACH OTHER AND THE ISSUES RAISED ARE COMMON. THEREFORE, BOTH THE APPEALS ARE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON AND CONSOLIDATED ORDER. 2. ONE OF THE GROUNDS RAISED BY THE ASSESSEES IN THESE APPEALS IS THAT THE ASSESSMENT ORDER PASSED U NDER 2 ITA.NOS.31, 32, 33 & 34/H/2014 MR. A. KRISHNA & SMT. A. MAMATHA, SECUNDERABAD. SECTION 143(3) READ WITH SECTION 153C OF THE I.T. A CT DATED 23.12.2011 IS INVALID, BAD IN LAW AND MUST BE QUASH ED AS SATISFACTION WAS NOT RECORDED BEFORE INITIATING THE PROCEEDINGS UNDER SECTION 158BC OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH AND SEIZURE OPERATION IN THE CASE OF ONE MR. VENGELLA ANAND PRASAD AND ANOTHER AND THEIR GROUP CONCERNS ON 07.10.2009, DURING THE COURSE OF WHICH, CERTAIN DOCUMENTS, BOOKS OF ACCOUNT ETC., WERE FOUN D AND SEIZED. THEREAFTER, A NOTICE UNDER SECTION 153C OF THE I.T. ACT HAS BEEN ISSUED TO BOTH THE ASSESSEES HEREIN FO R BRINGING TO TAX CERTAIN ITEMS RELATING TO THE DOCUM ENTS FOUND DURING THE COURSE OF SEARCH. THE ASSESSMENTS UNDER SECTION 143(3) READ WITH SECTION 153C OF THE ACT WERE COMPLETED THEREAFTER, AGAINST WHICH, ASSESSEES HAVE PREFERRED APPEALS BEFORE THE LD. CIT(A) WHO CONFIRM ED THE ORDER OF THE A.O. AND THE ASSESSEES ARE IN SECOND A PPEAL BEFORE US. LD. CIT(A), VIDE PARA 7.14 REJECTED THE CONTENTIONS STATING THAT IT CANNOT BE SAID THAT THE A.O. WAS NOT SATISFIED FOR INVOKING PROVISIONS OF SECTIO N 153C AND HELD THEM TO BE VALID. 3. THE LD. COUNSEL FOR THE ASSESSEE, MR. K.C. DEVDAS, SUBMITTED THAT THE ASSESSEES HEREIN HAVE CHALLENGED THE VALIDITY OF THE ASSESSMENT PROCEEDIN GS UNDER SECTION 143(3) AND 153C OF THE I.T. ACT ON TH E GROUND THAT BEFORE INITIATING PROCEEDINGS UNDER SEC TION 153C OF THE I.T. ACT, THE A.O. OF THE PERSON SEARCH ED, HAS TO RECORD HIS SATISFACTION THAT THE INCOME RELATING TO SUCH DOCUMENTS BELONGS TO PERSONS OTHER THAN THE PERSON 3 ITA.NOS.31, 32, 33 & 34/H/2014 MR. A. KRISHNA & SMT. A. MAMATHA, SECUNDERABAD. SEARCHED I.E., THE ASSESSEES HEREIN, AND THAT NO SU CH SATISFACTION HAS BEEN RECORDED IN THE CASE OF THE ASSESSEES HEREIN. WHEN THIS ISSUE WAS PUT TO THE LD . D.R., THE D.R. GOT INSTRUCTIONS FROM THE CONCERNED ITO AND HAS FILED A COPY OF THE LETTER DATED 08.02.2016 TO THE EFFECT THAT THERE IS NO SATISFACTORY NOTE AVAILABLE IN THE FILES RECEIVED FROM DCIT, C.C. HYDERABAD BEFORE ISS UANCE OF 153C NOTICE. IT WAS FURTHER SUBMITTED THAT NO SE PARATE FILE CONTAINING THE SATISFACTION NOTE BEFORE ISSUAN CE OF NOTICE UNDER SECTION 153C IS AVAILABLE WITH THEIR O FFICE. COPY OF THE LETTERS OF THE RELEVANT A.OS WERE ALSO ENCLOSED THEREWITH. TAKING NOTE OF THIS LETTER OF THE REVENU E, WE ARE SATISFIED THAT THE A.O. OF THE PERSON SEARCHED HAS NOT RECORDED THE SATISFACTION AS REQUIRED UNDER SECTION 153C OF THE I.T. ACT THAT THE INCOME FROM THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH BELONG TO THE ASSESSEES HEREIN. WHEN THERE IS NO SUCH SATISFACTION RECORDED , IT IS THE SETTLED LAW THAT THE ASSESSMENTS UNDER SECTION 143(3) READ WITH SECTION 153C OF THE I.T. ACT ARE NOT VALI D. THEREFORE, THE APPEALS OF BOTH THE ASSESSEES ARE TR EATED AS ALLOWED AND THE ASSESSMENTS UNDER SECTION 143(3) RE AD WITH SECTION 153C ARE QUASHED. 4. IN THE RESULT, APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09.02.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 09 TH FEBRUARY, 2016 VBP/- 4 ITA.NOS.31, 32, 33 & 34/H/2014 MR. A. KRISHNA & SMT. A. MAMATHA, SECUNDERABAD. COPY TO 1. MR. A . KRISHNA, H.NO.10 - 2 - 278, PLOT NO.253(8), FLAT NO.304, BATHINA SURESH HARIVILLU APARTMENTS, WEST MAREDPALLY, SECUNDERABAD. 2. SMT. A. MAMATHA, H.NO.10 - 2 - 278, PLOT NO.253(8), FLAT NO.304, BATHINA SURESH HARIVILLU APARTMENTS, WEST MAREDPALLY, SECUNDERABAD. 3. DCIT, CENTRAL CIRCLE - 5, 7 TH FLOOR, AAYAKAR BHAVAN, FATEH MAIDAN ROAD, HYDERABAD 500 001. 4 . CIT(A) - V II , HYDERABAD. 5 . CIT - (CENTRAL) , HYDERABAD. 6 . D.R. ITAT B BENCH, HYDERABAD 7 . GUARD FILE