Late B. Rami Reddy (HUF) L/r. M. Ramakrishna Reddy, Hyd, Hyderabad V. DCIT, Central Circle-2, Hyderabad, Hyderabad

ITA 460/HYD/2016

• Counselvise Citation: 46022514 RSA 2016
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 31-08-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 31-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure; Period of limitation; Reason to believe
• Section: 143(3); 142(1); 148; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.460/HYD/2016 ASSESSMENT YEAR 2001-2002 LATE B. RAMI REDDY (HUF), L/R. M. RAMAKRISHNA REDDY, HYDERABAD 38. PAN AABHB1951Q VS. THE DCIT, CENTRAL CIRCLE- 2, HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. P. MURALIMOHAN RAO FOR REVENUE : MR. A. SITARAMA RAO DATE OF HEARING : 31.08.2016 DATE OF PRONOUNCEMENT : 14.09.2016 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 2001-2002. IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE RE-ASSESS MENT PROCEEDINGS UNDER SECTION 147/148 AND ALSO ADDITIONS MADE BY THE ASSESSING OFFICER IN THE 147 PROCEEDINGS. 2. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE WAS A SEARCH AND SEIZURE O PERATION UNDER SECTION 132 OF THE I.T. ACT ON THE BUSINESS AS WE LL AS RESIDENTIAL PREMISES OF THE GROUP OF CASES OF MR. M.V . SUBRAHMANYESWARA REDDY ON 24.08.2005. DURING THE COU RSE OF SEARCH AND SEIZURE, INCRIMINATING EVIDENCE PERTAININ G TO THE ASSESSEE WAS ALSO FOUND AND SEIZED AND ACCORDINGLY, AN ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 153C WAS 2 ITA.NO.460/HYD/2016 LATE MR. B. RAMI REDDY (HUF), HYDERABAD. COMPUTED ON 28.12.2007. HOWEVER, SINCE CERTAIN ISSUES RELATING TO HOUSE PROPERTY INCOME EARNED BY THE ASSESSEE WAS N OT QUANTIFIED/ASSESSED IN THE ASSESSMENT ORDER, THE ASSES SING OFFICER REOPENED THE ASSESSMENT UNDER SECTION 147 BY I SSUING A NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE DID NOT FURNISH ANY RETURN OF INCOME BY STATING THAT THE NOTICE UNDER SEC TION 148 WAS SERVED BEYOND THE PERIOD OF LIMITATION. THE ASSES SING OFFICER OBSERVED THAT THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 142(1) DATED 04.12.20 09. IN RESPONSE THERETO, ON 15.12.2009, THE ASSESSEE FILED HI S CONTENTION STATING THAT NOTICE UNDER SECTION 148 DATED 01.05.2008 WAS SERVED ON THE ASSESSEE ON 02.05.2008 BY WHICH TIME, THE NOTICE WAS ALREADY BARRED AND HENCE, IT IS NO T A VALID NOTICE AND THEREFORE, THERE CANNOT BE ANY FURTHER PROCE EDINGS UNDER SECTION 147 OF THE ACT. IT WAS FURTHER SUBMITTED THAT THE ASSESSMENT UNDER SECTION 153C WAS ALREADY COMPLETED I N HIS CASE AND HENCE, THE SAME CANNOT BE REOPENED UNDER THE PROVISIONS OF SECTION 147 OF THE I.T. ACT, 1961. THE ASSESSING OFFICER HOWEVER, REJECTED THE CONTENTIONS OF THE ASSES SEE HOLDING THAT THE SEIZED MATERIAL REVEALED A FACT THAT THE ASSESS EE HAD CONCEALED HOUSE PROPERTY INCOME AND AS THE ISSUE WAS NOT AT ALL CONSIDERED BY THE ASSESSING OFFICER, THE PRESENT ASSE SSING OFFICER HAD REASON TO BELIEVE THAT THE INCOME HAD ESCAPED AS SESSMENT AS PER SECTION 147 OF THE ACT. SINCE THE ASSESSEE HAS FAILED TO FILE ANY RETURN OF INCOME, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT UNDER SECTION 144 OF THE ACT AND BROUGHT TO TA X THE ESTIMATED RENTAL INCOME. AGGRIEVED, ASSESSEE PREFERRE D AN APPEAL BEFORE THE CIT(A) BOTH AGAINST THE VALIDITY OF RE-ASSE SSMENT PROCEEDINGS AND ALSO ON MERITS. HOWEVER, SINCE THE AS SESSEE DID NOT APPEAR BEFORE THE CIT(A), THE CIT(A) CONFIRMED TH E ORDER OF 3 ITA.NO.460/HYD/2016 LATE MR. B. RAMI REDDY (HUF), HYDERABAD. THE ASSESSING OFFICER AND THE ASSESSEE IS IN SECOND A PPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS CHALLENGING BOTH THE VALIDITY OF THE R E-ASSESSMENT PROCEEDINGS AS WELL AS THE MERITS OF THE ADDITIONS BEF ORE US. HE SUBMITTED THAT THE MERITS OF THE ADDITIONS NEEDS TO BE RE- CONSIDERED BY THE ASSESSING OFFICER IN THE LIGHT OF RE MAND REPORT OF THE ASSESSING OFFICER FOR THE A.Y. 2002-2003 WHERE IN SIMILAR ADDITIONS HAVE BEEN MADE AND THE ASSESSING OFFICER HA S ACCEPTED THE ASSESSEES CONTENTIONS. THE LEARNED COUNSEL FOR TH E ASSESSEE HAS FILED A COPY OF THE REMAND REPORT BEFORE US. 4. THE LD. D.R. ON THE OTHER HAND, BROUGHT TO OUR NOTI CE THE ATTITUDE OF THE ASSESSEE IN NOT APPEARING BEFORE THE A SSESSING OFFICER AS WELL AS BEFORE THE CIT(A). HE SUBMITTED THAT SINCE THE ASSESSEE WAS NON-COOPERATIVE, THE ASSESSING OFFICER WAS CONSTRAINED TO MAKE THE ADDITIONS ON ESTIMATE BASIS. HOW EVER, AS REGARDS THE MERITS OF THE ADDITIONS, THE D.R. ALSO AGR EED THAT THE REMAND REPORT ALSO REFERS TO THE ADDITIONS MADE IN THE A .YS. 2001-2002 AND 2002-2003. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT DURING THE REMAND PR OCEEDINGS THE MERITS OF THE ADDITIONS MADE FOR ASSESSMENTS OF BOTH A.YS. 2001-2002 AND 2002-2003 HAVE BEEN RE-LOOKED INTO BY THE ASSESSING OFFICER FOR THE A.Y. 2002-03 AND THE ASSESS ING OFFICER HAS GIVEN COMMENTS IN FAVOUR OF THE ASSESSEE. IN VIE W OF THE SAME, WITHOUT GOING INTO THE DETAILED GROUNDS RAISED BY THE ASSESSEE, WE DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE REMAND REPORT GIVEN IN 4 ITA.NO.460/HYD/2016 LATE MR. B. RAMI REDDY (HUF), HYDERABAD. ASSESSEES OWN CASE ON THE VERY SAME ISSUES FOR THE A .Y. 2002-03 AND TO RE-CONSIDER THE ASSESSMENT DE NOVO IN ACCORDANCE WITH LAW, AFTER GIVING A FAIR A FAIR OPPORTUNITY OF BEIN G HEARD TO THE ASSESSEE. 6. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.09.2016. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 14 TH SEPTEMBER, 2016 VBP/- COPY TO 1. LATE MR. B. RAMI REDDY (HUF), L/R. M. RAMAKRISHNA REDDY, HYDERABAD 38. C/O. MR. P. MURALI & CO., CHARTERED ACCOUNTANTS, 6-3- 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD 82. 2. THE INCOME TAX OFFICER, WARD 6(3), NOW ITO, WARD - 14(2), HYDERABAD. 3. CIT(A)-VI, HYDERABAD. 4. PR. CIT-6, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD 6. GUARD FILE