Sri Surakshita Homes, Hyderabad V. Income-tax officer, Ward-11(2), Hyderabad

ITA 435/HYD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66184 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 16-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: RAVI SESHAGIRI RAO
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 435/HYD/2012 ASSESSMENT YEAR: 2008-09 SRI SURAKSHITA HOMES, HYDERABAD. .... APPELLANT PAN:ABFFS 1769 L VS. ITO, WARD-11(2), HYDERABAD. RESPONDENT APPELLANT BY : SHRI RAVI SESHAGIRI RAO RESPONDENT BY : SHRI V. SRINIVAS DATE OF HEARING : 02-07-2012 DATE OF PRONOUNCEMENT : 31-08-2012 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 28-12-2011 OF CIT (A)-VI, HYDERABAD PAS SED IN APPEAL NO.0539/2010-11/CIT(A)-VI, HYDERABAD AND IT PERTAINS TO THE ASSESSMENT YEAR 2008-09. 2. THE GROUND ON WHICH THE APPEAL HAS BEEN FILED IS CIT (A) DISMISSING THE APPEAL OF THE ASSESSEE IN LIMINE U/S 249(4) OF THE ACT FOR NON PAYMENT OF ADMITTED TAX LIABILITY AT TH E TIME OF FILING THE APPEAL. 2 ITA NO. 435 OF 2012 SRI SURAKSHITA HOMES, HYD. 3. BRIEFLY THE FACTS ARE THE ASSESSEE IS A PARTNERS HIP FIRM CARRYING ON BUSINESS IN REAL ESTATE. FOR THE ASSES SMENT YEAR UNDER DISPUTE AN ASSESSMENT ORDER WAS PASSED U/S 14 3(3) ON 31- 12-2010 RAISING A DEMAND OF RS.2,46,92,893. THE AS SESSEE CHALLENGED THE ASSESSMENT ORDER PASSED BY FILING AN APPEAL BEFORE THE CIT (A) ON 31-1-2011. DURING THE SCRUTI NY OF THE APPEAL, IT WAS FOUND THAT THE ASSESSEE HAS NOT PAID THE ADMITTED TAX LIABILITY OF RS.36,35,495. 4. THE LEARNED AR OF THE ASSESSEE SUBMITTED BEFORE THE CIT (A) THAT THE ASSESSEE HAS DISCHARGED THE ADMITTED TAX L IABILITY INCLUDING INTEREST BY MAKING THE PAYMENT AS BELOW:- A) RS.20,00,000, 18-11-2011 INDIAN BANK, BARKAT PURA BRANCH B) RS.22,50,000, 5-12-2011, AXIS BANK, GARIA BRA NCH, KOLKATA (INTERNET COLLECTION BRANCH) C) RS.1,38,100/-,7-12-2011, SBI, NARAYANAGUDA BR ANCH IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT SIN CE THE ADMITTED TAX LIABILITY HAS BEEN DISCHARGED THE APPE AL MAY BE HEARD ON MERIT. THE CIT (A) ON INTERPRETING THE PR OVISIONS CONTAINED IN SECTION 249(4) CAME TO A CONCLUSION TH AT AFTER THE AMENDMENT OF THE PROVISO TO SECTION 249(4) BY THE D IRECT LAWS AMENDMENT ACT WITH EFFECT FROM 1-4-1989, THE CIT (A ) HAS NO DISCRETION TO EXEMPT THE ASSESSEE FROM THE OPERATIO N OF THE SUB- SECTION. SHE THEREFORE DISMISSED THE APPEAL OF THE ASSESSEE IN LIMINE. 3 ITA NO. 435 OF 2012 SRI SURAKSHITA HOMES, HYD. 5. THE LEARNED AR FOR THE ASSESSEE CONTENDED BEFORE US THAT THE ASSESSEE WAS UNDER SEVERE FINANCIAL HARDSHIP W HICH PREVENTED IT FROM MAKING PAYMENT OF ADMITTED TAX. HOWEVER, DURING THE PENDENCY OF THE APPEAL BEFORE THE CIT (A ), THE ASSESSEE HAD PAID ADMITTED TAX ALONG WITH INTEREST. THEREFORE, ASSESSEES APPEAL SHOULD NOT HAVE BEEN DISMISSED IN LIMINE WITHOUT HEARING ON MERIT. 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTING TH E ORDER PASSED BY THE CIT (A) JUSTIFIED HER ACTION IN DISMI SSING THE APPEAL IN LIMINE. 7. WE HAVE HEARD RIVAL SUBMISSION AND PERUSED THE M ATERIALS ON RECORD. IT IS A FACT ON RECORD THAT THE ASSESSE E HAS DISCHARGED THE ADMITTED TAX LIABILITY DURING PENDENCY OF THE A PPEAL BEFORE THE CIT (A). UNDOUBTEDLY, THE CONDITION PRECEDENT FOR VALIDITY OF THE APPEAL BEFORE THE CIT (A) IS PAYMENT OF ADMITTE D TAX ON THE RETURNED INCOME AS PROVIDED U/S 249(4) OF THE ACT. HOWEVER AS HELD BY THE ITAT, HYDERABAD BENCH IN ITA NO.402/HYD /2011 IN CASE OF D.S. KARUNAKARA REDDY VS. DCIT, NON PAYMENT OF ADMITTED TAX WHILE FILING AN APPEAL IS A CURABLE DE FECT AND TILL SUCH TIME ADMITTED TAX IS NOT PAID THE APPEAL REMAI NS DEFECTIVE AND NOT VALID AND WHEN SUCH DEFECT IS CURED BY PAYM ENT OF TAX ON THE RETURNED INCOME BY THE ASSESSEE, THE APPEAL BEC OMES VALID AND SUCH VALID APPEAL DEEMED TO HAVE BEEN FILED. I N SUCH A CASE, DELAY IN FILING OF THE APPEAL HAS TO BE RECKONED TI LL THE DATE THE APPEAL HAS BEEN MADE VALID BY THE ASSESSEE BY MAKIN G PAYMENT OF ADMITTED TAX ON THE INCOME RETURNED AND IF THERE IS REASONABLE CAUSE IN THE LATE PAYMENT OF ADMITTED TAX, THE DELA Y MAY BE CONDONED AND THE APPEAL MAY BE DISPOSED OFF ON MERI TS. IT IS SEEN FROM THE RECORDS THAT THE ASSESSEE HAD DISCHAR GED THE LIABILITY OF ADMITTED TAX ALMOST NEARLY A YEAR AFTE R FILING OF APPEAL 4 ITA NO. 435 OF 2012 SRI SURAKSHITA HOMES, HYD. BEFORE THE CIT (A). THE ASSESSEE SUBMITTED IN THE LIGHT OF THE AFORESAID DECISION OF ITAT, HYDERABAD BENCH, THE AS SESSEES APPEAL BECOMES VALID ON THE DATE ADMITTED TAX LIABI LITY WAS FULLY DISCHARGED. HOWEVER, THE DATE APPEAL BECAME VALID , THE ASSESSEE IS REQUIRED TO EXPLAIN THE DELAY BY SHOWIN G SUFFICIENT CAUSE. ON THE AFORESAID FACTS AND THE CIRCUMSTANCE S, WE RESTORE THE MATTER BACK TO THE FILE OF THE CIT (A) WHO SHAL L GIVE AN OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THE DELAY AN D IF THE ASSESSEE IS ABLE TO SHOW REASONABLE CAUSE, THEN THE APPEAL IS TO BE ADMITTED FOR HEARING ON MERIT. NEEDLESS TO MENT ION THE CIT (A) SHALL AFFORD A REASONABLE OPPORTUNITY OF HEARIN G TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 31- 8-2012. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER HYDERABAD, DATED THE 31 ST AUGUST, 2012. COPY TO:- 1) C/O SRI S. RAMA RAO, ADVOCATE, FLAT NO.101, SHRI YAS ELEGANCE, STREET NO.9, HIMAYATNAGAR, HYDERABAD. 2) ITO, WARD-11(2), HYDERABAD. 3) THE CIT (A)-VI, HYDERABAD 4) THE CIT CONCERNED, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABA D. JMR* 5 ITA NO. 435 OF 2012 SRI SURAKSHITA HOMES, HYD.