C. Ravi Kumar, Hyderabad V. Asst.CIT, Central Circle, Tirupathi

ITA 414/HYD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6378 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 11-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Assessee Lawyers: S RAMA RAO
• Keywords: Search and seizure; Assessment record

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.412, 413, 414 & 415 /HYD/2014 ASSESSMENT YEARS 2004-05. 2005-06, 2006-07 & 2007-08 MR. C. RAVI KUMAR NELLORE. PAN AHHPR7090K VS. ACIT, CENTRAL CIRCLE, TIRUPATI (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : MR. K.J. RAO DATE OF HEARING : 11.08.2016 DATE OF PRONOUNCEMENT : 19.08.2016 ORDER PER D. MANMOHAN, V.P. THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE CIT(A), GUNTUR AND THEY P ERTAIN TO THE A.YS. 2004-05 TO 2007-08. 2. CONSEQUENT TO THE SEARCH AND SEIZURE OPERATIONS THE PAPERS APPEARS TO HAVE BEEN FORWARDED TO THE CONCERNED ASSESSING OFFICER WHO INTURN, ISSUED NOTICES UNDER S ECTION 153C OF THE ACT AND THEREAFTER, COMPLETED THE ASSESSMENTS BY MAKING VARIOUS ADDITIONS. CIT(A) HAVING PARTLY ALLOWED THE APPEALS, THE ASSESSEE PREFERRED SECOND APPEALS BEFORE US CONTESTIN G THE ADDITIONS CONFIRMED BY THE CIT(A). IN ADDITION THERETO, THE ASSESSEE BY WAY OF ADDITIONAL GROUND, CHALLENG ED THE INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE AC T ON THE GROUND THAT PROCEEDINGS ARE NOT VALIDLY INITIATED WITH OUT 2 ITA.NO.412, 413, 414 & 415/HYD/2014 MR. C. RAVI KUMAR, NELLORE. RECORDING PROPER REASONS WHEREAS IN THESE CASES, THE ASSESSING OFFICER HAS NOT RECORDED THE REASONS AND HENCE, ASSES SMENTS ARE VOID ABINITIO . SINCE, THIS IS A PURE LEGAL ISSUE, THE SAME IS TAKEN ON RECORD AND THE LD. D.R. WAS CALLED-UPON TO OBTAIN THE ASSESSMENT RECORD TO VERIFY AS TO WHETHER SATISFACTION NO TE WAS RECORDED AT ANY STAGE OF ASSESSMENT UNDER SECTION 153C OF THE I.T. ACT. VIDE LETTER DATED 09.05.2006 THE LD. D.R. ENC LOSED A COPY OF THE LETTER OF THE ASST. COMMISSIONER OF INCOM E TAX, CIRCLE-1, NELLORE DATED 03.05.2016 TO SUBMIT THAT THERE IS NO SATISFACTION NOTE RECORDED IN THE ORDER SHEETS FOR THE A .YS. 2004- 05 TO 2007-08. THE LD. D.R. PLACED COPY OF THE LETTER S AND FAIRLY ADMITTED THAT AS PER THE CBDT GUIDELINES SUCH APPEALS SH OULD BE EITHER WITHDRAWN OR NOT PRESSED WHEN IT DOES NOT MEET THE GUIDELINES. 3. LEARNED COUNSEL FOR THE ASSESSEE ADVERTED OUR ATTENTION TO THE PROVISIONS OF SECTION 153C OF THE ACT TO SUBMIT THAT WITHOUT RECORDING SATISFACTION THE ASSESSING OFFICER WOULD NOT HAVE JURISDICTION TO INITIATE PROCEEDINGS AND IF ANY SUCH PROCEEDINGS ARE INITIATED THE SAME SHOULD BE TREATED A S VOID ABINITIO. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE RECORD. THERE IS NO DISPUTE WITH REGA RD TO THE FACT THAT PROCEEDINGS UNDER SECTION 153C ARE INITIATED WI THOUT RECORDING SATISFACTION. IDENTICAL ISSUE HAS COME-UP BE FORE THE B (SMC) BENCH OF THIS TRIBUNAL IN THE CASE OF MR. M. SRINIVASA REDDY (HUF), HYDERABAD VS. DCIT, CENTRAL CIRCLE-2, H YDERABAD IN ITA.NOS. 1853, 1854, 1855, 1857 & 1858/H/2012 AN D THE TRIBUNAL VIDE ORDER DATED 09.08.2016 OBSERVED AS UN DER : 3 ITA.NO.412, 413, 414 & 415/HYD/2014 MR. C. RAVI KUMAR, NELLORE. 7. UNDER IDENTICAL CIRCUMSTANCES, THE ITAT HYDERABAD BENCH IN THE CASE OF SHETTYS PHARMACEUTIC ALS & BIOLOGICALS LTD., VS. DCIT, CENTRAL CIRCLE-2, HYDER ABAD (2014) 47 TAXMANN.COM 85 (HYD.) (TRIBU.) QUASHED THE PROCE EDINGS FOR NON-RECORDING OF REASONS BY OBSERVING IN PARA-3 3 AS UNDER : 33. THE ABOVE TWO JUDGMENTS WERE DELIVERED U/S. 1 58BD. WE HAVE CAREFULLY GONE THROUGH THE LANGUAGE USED IN SECTION 153C AND 158BD OF THE ACT. THE MAIN DIFFERE NCE IN THE LANGUAGE IS THAT IN SECTION 158BD THE SCOPE OF JURISDICTION OF AO IS ONLY WITH RESPECT TO THE UNDI SCLOSED INCOME FOUND DURING THE COURSE OF SEARCH. WHEREAS I N SECTION 153C THE SCOPE OF JURISDICTION OF THE AO IS WITH RESPECT TO ANY MONEY, BULLION, JEWELLERY, OTHER VAL UABLE ARTICLES OR THINGS OR BOOKS OF ACCOUNT OR DOCUMENTS WITH RESPECT TO WHICH THE ASSESSING OFFICER IS SATISFIED THAT IT BELONGS TO SUCH OTHER PERSON. BUT SO FAR AS THE REF ERENCE TO WORD 'SATISFACTION' IS MADE IT IS SAME AS AVAILA BLE IN SECTION 158BD OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE RATIO LAID DOWN IN THE ABOVE CASES IN RESP ECT TO THE POINT OF SATISFACTION WILL APPLY FOR INITIATION OF ACTION U/S. 153C OF THE ACT. IN VIEW OF THIS, WE ARE INCLI NED TO HOLD THAT INITIATION OF PROCEEDINGS U/S. 153C OF TH E ACT IN THE CASE OF THE ASSESSEE FOR THESE TWO ASSESSMENT Y EARS IS NOT PROPER AS THERE IS NO SATISFACTION RECORDED BY THE AO HAVING JURISDICTION OVER THE PERSON SEARCHED OR REQUISITIONED U/S. 132A OF THE ACT DURING THE COURS E OF ASSESSMENT PROCEEDINGS OF SEARCHED PARTY OR LATER BEFORE ISSUE OF NOTICE U/S. 153C OF THE ACT. ACCORD INGLY, WE QUASH THE ASSESSMENT FRAMED U/S. 153C OF THE ACT IN BOTH THE ASSESSMENT YEARS IN THIS CASE. 8. ON AN APPEAL FILED BY THE REVENUE, THE ORDER OF THE ITAT WAS AFFIRMED BY THE HONBLE A.P. HIGH COUR T (ITTA.NO.662 OF 2014 DATED 26.11.2014). SINCE NO SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER AND THE SO-CALLED REASONS BEING VAGUE, I AM OF THE FIRM VIE W THAT THE INITIATION OF PROCEEDINGS UNDER SECTION 153C OF THE ACT DESERVES TO BE QUASHED AS IT DO NOT STAND THE TEST OF LAW. SINCE THE INITIATION OF PROCEEDINGS ARE HELD TO BE BAD IN LAW, IT IS NOT NECESSARY FOR ME TO DISCUSS THE OTHER ISS UES URGED BY THE ASSESSEE ON MERITS. 4 ITA.NO.412, 413, 414 & 415/HYD/2014 MR. C. RAVI KUMAR, NELLORE. 5. FACTS BEING IDENTICAL, WE HOLD THAT THE PROCEEDINGS INITIATED UNDER SECTION 153C OF THE ACT ARE INVALID. SIN CE THE PROCEEDINGS INITIATED BY THE ASSESSING OFFICER ARE Q UASHED, IT IS NOT NECESSARY FOR US TO GO INTO THE MERITS OF THE ADDITIO NS. 6. IN THE RESULT, APPEALS FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.08.2 016. SD/- SD/- (B. RAMAKOTAIAH) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED 19 TH AUGUST, 2016 VBP/- COPY TO 1. MR. C. RAVI KUMAR, NELLORE. C/O. MR. S. RAMA RAO , ADVOCATE, FLAT NO.102, SHRIYAS ELEGANCE, ROAD NO.9, HIMAYATNAGAR, HYDERABAD 29. 2. THE ACIT, CENTRAL CIRCLE, TIRUPATI. 3. CIT(A), GUNTUR. 4. CIT (CENTRAL), HYDERABAD. 5. D.R. ITAT B BENCH, HYDERABAD. 6. GUARD FILE