P Yadi Reddy, R R District, Hyderabad V. DCIT, Central Circle-7, Hyd, Hyderabad

ITA 529/HYD/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3215 (ITAT-HYDERABAD)
• Duration Of Justice: 9 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 15-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 05-05-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Search and seizure; Question of law
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. ASST YEAR APPELLANT RESPONDENT 525/HYD/2015 526/HYD/2015 527/HYD/2015 528/HYD/2015 529/HYD/2015 2003-04 2004-05 2006-07 2007-08 2008-09 SHRI P.YADI REDDY, ANKUSHAPUR VILLAGE, GHATKESAR MANDAL, RR DISTRICT (PAN AFEPT 3231 P ) DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 7, HYDERABAD 467/HYD/2015 482/HYD/2015 2007-08 2008-09 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(4), HYDERABAD SHRI P.YADI REDDY, ANKUSHAPUR VILLAGE, GHATKESAR MANDAL, RR DISTRICT (PAN AFEPT 3231 P ) ASSESSEE BY : SHRI K.C.DEVDAS DEPARTMENT BY : SHRI M.SITARAM DR DATE OF HEARING 15 . 2 .201 6 DATE OF PRONOUNCEMENT 15.2.2016 O R D E R PER BENCH : THERE ARE SEVEN APPEALS IN THIS BUNCH. THERE ARE CROSS APPEALS FOR 2007-08 AND 2008-09 AND THERE ARE ASSES SEES APPEALS ONLY FOR OTHER YEARS. THESE APPEALS ARISE OUT OF TH E ORDERS PASSED BY THE ASSESSING OFFICER UNDER S.143(3) READ WITH S.15 3C OF THE INCOME TAX ACT, 1961, FOR VARIOUS ASSESSMENT YEARS FROM 20 03-04 TO 2008- 09. ITA NO.525/HYD/2015 & OTHERS SHRI P.YADI REDDY, ANKUSHAPUR VILL. GHATKESAR MANDAL RR DISTRICT 2 ASSESSEES APPEALS : ITA NOS.525 TO 529/HYD/2015 2. FOLLOWING COMMON ADDITIONAL GROUND WAS RAISED B Y THE ASSESSEE, EXCEPT FOR CHANGE OF ASSESSMENT YEAR THE LEARNED CIT(A) FAILED TO NOTE THAT THE SATISFA CTION AS ENJOINED IN SECTION 153C OF THE IT ACT, 1961 THAT T HE APPELLANT HAD UNDISCLOSED INCOME NOT HAVING BEEN RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT FILE OF B.RAMDA S GOUD WHO WAS SUBJECT TO PROCEEDINGS U/S. 132 OF THE IT ACT, 1961 AND THEREFORE THE ORDER PASSED U/S. 143(3) R.W.S. 153C OF THE IT ACT, 1961 IN THE CASE OF THE APPELLANT FOR THE ASSE SSMENT YEAR 2003-04 IS BAD IN LAW, INVALID WITHOUT JURISDICTION AND MU ST BE ANNULLED. 3. LEARNED COUNSEL SUBMITTED THAT FACTS NECESSARY FOR CONSIDERATION OF THE ADDITIONAL GROUND ARE ALREADY ON RECORD, AND BEING A PURE QUESTION OF LAW INVOLVED IN THE ADDITIONAL G ROUND, SUPPORTED BY THE JUDGMENT OF THE APEX COURT AS WELL AS THE CIRCU LAR ISSUED BY THE CBDT, THE SAME DESERVES TO BE ADMITTED. HAVING REG ARD TO THE CIRCUMSTANCES OF THE CASE, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN THESE APPEALS. 4. FACTS CONCERNING THE ISSUE ARE STATED IN BRIEF . SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED IN THE CASES OF S HRI B.RAMDAS GOUD AND SHRI DESAGONI RAGHUPATHI GOUD GROUP ON 15.9.200 8. CERTAIN INCRIMINATING MATERIAL/DOCUMENTS PERTAINING TO THE ASSESSEE HEREIN APPEAR TO HAVE BEEN FOUND DURING THE COURSE OF SEAR CH, AND HENCE, THE ASSESSING OFFICER INITIATED PROCEEDINGS UNDER S.153 C OF THE ACT AND ULTIMATELY COMPLETED THE ASSESSMENTS IN THE CASE O F THIS ASSESSEE FOR THE RELEVANT YEARS UNDER APPEAL, BY MAKING CERTAIN ADDITIONS/DISALLOWANCES. ITA NO.525/HYD/2015 & OTHERS SHRI P.YADI REDDY, ANKUSHAPUR VILL. GHATKESAR MANDAL RR DISTRICT 3 5. AGGRIEVED BY THE ASSESSMENTS MADE AS ABOVE, AS SESSEE PREFERRED APPEALS BEFORE THE CIT(A), AND FURTHER AG GRIEVED BY THE ADDITIONS SUSTAINED BY THE CIT(A), ASSESSEE PREFERR ED THE PRESENT APPEALS BEFORE THE TRIBUNAL. 6. BY WAY OF ADDITIONAL GROUND NOTED ABOVE, THE AS SESSEE CONTENDS THAT IN ORDER TO ASSUME JURISDICTION UNDER S.153C OF THE ACT, IT IS MANDATORY ON THE PART OF THE ASSESSING OFFICE R, IN THE ASSESSMENT FILE OF SHRI B.RAMDAS GOUD, WHICH WAS SUBJECT TO PR OCEEDINGS UNDER S.132 OF THE ACT, TO RECORD SATISFACTION THAT THE A SSESSEES INCOME ESCAPED ASSESSMENT, AND IN THE ABSENCE OF RECORDING SATISFACTION BY THE ASSESSING OFFICER DEALING WITH THE MATTER OF SH RI B.RAMDAS GOUD, THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 7 , HYDERABAD HAS NO JURISDICTION TO INITIATE THE PROCEEDINGS UNDER S .153C OF THE ACT IN THE CASE OF THE ASSESSEE HEREIN. IN THIS REGARD, T HE ASSESSEE PLACED BEFORE US A COPY OF CIRCULAR NO.24/2015 ISSUED BY T HE CBDT, (F.NO.279/MISC./140/2015(ITJ) DATED 31.12.2015), WH EREIN THE CENTRAL BOARD OBSERVED THAT THE HON'BLE SUPREME COU RT IN THE CASE OF CIT V/S. CALCUTTA KNITWEARS (362 ITR 673) HAS LAID DOWN THAT FOR THE PURPOSE OF S.158BD OF THE ACT, RECORDING OF A SATIS FACTION NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREP ARED BY THE ASSESSING OFFICER BEFORE HE TRANSMITS THE RECORD TO THE OTHER ASSESSING OFFICER WHO HAS JURISDICTION OVER SUCH OTHER PERSON U/S. 1538BD OF THE ACT, AND THE BOARD FURTHER OBSERVED THAT THE PROV ISIONS OF S.153C ARE SUBSTANTIALLY SIMILAR TO THE PROVISIONS OF S.158BD OF THE ACT AND THEREFORE, THE ABOVE GUIDELINES OF THE HON'BLE SUPR EME COURT APPLY TO THE PROCEEDINGS UNDER S.153C OF THE ACT. IN PARA 5 OF THE CIRCULAR, IT WAS CLARIFIED THAT EVEN IN THE PENDING LITIGATION, IF SATISFACTION IS NOT AVAILABLE, THE REVENUE HAS TO ABIDE BY THE GUIDELIN ES ISSUED BY CBDT WHICH ARE IN TERMS OF THE GUIDELINES LAID DOWN BY T HE APEX COURT. ITA NO.525/HYD/2015 & OTHERS SHRI P.YADI REDDY, ANKUSHAPUR VILL. GHATKESAR MANDAL RR DISTRICT 4 LEARNED COUNSEL ALSO PLACED BEFORE US A COPY OF THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V/S. S HETTYS PHARMACEUTICALS & BIOLOGICALS LTD.(2015)57.TAXMANN. COM.282(ANDHRA PRADESH) WHEREIN THE HON'BLE COURT OBSERVED THAT R ECORDING OF SATISFACTION IS A PRECONDITION FOR INVOKING JURISDI CTION UNDER S.153C OF ACT AND IN THE ABSENCE OF FOLLOWING OF SUCH PROCEDU RE, THE ASSESSMENTS FRAMED UNDER S.153C DESERVE TO BE QUASHED. 7. LEARNED DEPARTMENTAL REPRESENTATIVE FAIRLY ADMI TTED THAT THE ISSUE STANDS SQUARELY COVERED BY THE CIRCULAR I SSUED BY THE CBDT AS WELL AS THE DECISION OF THE JURISDICTIONAL HIGH COURT. AT THE SAME TIME, THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTE NDED THAT NON- RECORDING OF SATISFACTION IS ONLY A PROCEDURAL IRRE GULARITY AND ONE HAS TO REFER TO THE FACTS OF THE CASE AND THE INCRIMINATIN G DOCUMENTS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS TO APPRECIA TE WHETHER IT IS A DESERVING CASE FOR INITIATING THE PROCEEDINGS UNDE R S.153C OF THE ACT. THUS, HE STRONGLY SUPPORTED THE ORDERS PASSED BY TH E ASSESSING OFFICER. 7.1. ON THE PREVIOUS OCCASION, LEARNED DEPARTMENTA L REPRESENTATIVE SOUGHT ADJOURNMENT ON THE GROUND THA T RECORDS COULD NOT BE OBTAINED. HENCE, BENCH GRANTED ADJOURNMENT AND DIRECTED THE ASSESSING OFFICER TO BE PRESENT BEFORE THE BENCH AL ONGWITH RECORDS TO CLARIFY THE FACTUAL MATRIX OF THE CASE. SHRI M.V.R. VARMA, DCIT WAS PRESENT IN THE COURT AND ADMITTED THAT RECORD DOES NOT CONTAIN ANY FORWARDING LETTER FROM THE ASSESSING OFFICER OF SHR I RAMDAS GOUD, RECORDING HIS SATISFACTION, AS REQUIRED UNDER S.153 C OF THE ACT, BEFORE FORWARDING THE FILES TO THE OFFICER IN CHARGE OF SH RI YADI REDDYS ASSESSMENTS. ITA NO.525/HYD/2015 & OTHERS SHRI P.YADI REDDY, ANKUSHAPUR VILL. GHATKESAR MANDAL RR DISTRICT 5 8. HAVING REGARD TO THE RIVAL SUBMISSIONS AND IN THE LIGHT OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN LI NE WITH THE VIEW TAKEN BY THE APEX COURT AND THE BINDING CIRCULAR ISSUED B Y THE CBDT(BINDING UPON THE REVENUE), WE ARE OF THE VIEW THAT THE PRO CEEDINGS INITIATED UNDER S.153C OF THE ACT IN THE CASES OF THE ASSESSE E HEREIN FOR THE RELEVANT YEARS UNDER APPEAL, DESERVE TO BE QUASHED IN AS MUCH AS THE CONCERNED ASSESSING OFFICER HAS ADMITTEDLY NOT RECO RDED ANY SATISFACTION BEFORE FORWARDING THE FILES TO THE ASS ESSING OFFICER IN WHOSE CHARGE, THE ASSESSEE HEREIN ARE ASSESSED. IN OTHER WORDS, THE ASSESSMENTS MADE UNDER S.153C OF THE ACT ARE HEREBY QUASHED. IN THIS VIEW OF THE MATTER, THE OTHER GROUNDS URGED BY THE ASSESSEE HAVE NO LEGS STAND, SINCE THE VERY ASSESSMENTS GIVING RI SE TO THESE APPEALS ARE QUASHED. CONSEQUENTLY, ASSESSEES APPEALS ARE TREATED AS ALLOWED ON THE LEGAL GROUND. REVENUES APPEALS : ITA NOS.467 & 482/HYD.2015 9. IN VIEW OF OUR DECISION IN THE CONTEXT OF ASSES SEES APPEALS HEREINABOVE, WHEREBY THE ASSESSMENTS GIVING RISE TO THE PRESENT APPEALS OF THE REVENUE HAVE BEEN QUASHED ON THE GR OUND THAT ASSESSING OFFICER HAS ADMITTEDLY NOT RECORDED ANY S ATISFACTION BEFORE FORWARDING THE FILES TO THE ASSESSING OFFICER IN WH OSE CHARGE, THE ASSESSEE HEREIN ARE ASSESSED, THE PRESENT APPEALS O F THE REVENUE HAVE NO LEGS TO STAND. THEY ARE ACCORDINGLY DISMISS ED. ITA NO.525/HYD/2015 & OTHERS SHRI P.YADI REDDY, ANKUSHAPUR VILL. GHATKESAR MANDAL RR DISTRICT 6 10. IN THE RESULT, AS PRONOUNCED IN THE OPEN COUR T, APPEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED AND TH E APPEALS FILED BY THE REVENUE ARE DISMISSED. SD/- SD/- (S.RIFAUR RAHMAN) (D.MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT DT/- 15 TH FEBRUARY, 2016 COPY FORWARDED TO: 1. SHRI P.YADI REDDY (ANKUSHAPUR VILLAGE) C/O. B.N ARSING RAO & CO., CHARTERED ACCOUNTANTS, PLOT NO.554, ROAD NO.92, JUB ILEE HILLS, HYDERABAD 96. 2. 3. 4. 5. DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 7, HY DERABAD DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 2(4), HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS), GUNTUR COMMISSIONER OF INCOME - TAX (CENTRAL), HYDERABAD 6. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S. YA