Late Etti Sriramulu Reddy L/r by Smt.B.Vani and Smt.M. Vijaya Lakshmi, Tirupati V. Income Tax Officer, Ward-1(2), Tirupati

ITA 761/Hyd/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4624 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 13-09-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 14-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B VANI
• Keywords: Unexplained investment
• Section: 143(3); 143(2); 113; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER & SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO. 76 1 /H YD /20 19 ASSESSMENT YEAR: 200 8 - 09 LATE ETTI SRIRAMULU REDDY L/ R BY SMT.B.VANI AND SMT.M. VIJAYA LAKSHMI TIRUPATHI [PAN: AADPE6367R] VS. INCOME TAX OFFICER WARD 1(2) TIRUPATHI (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI E. PHALGUNA KUMAR REVENUE BY: SHRI D.J. PRABHAKAR ANAND, DR DATE OF HEARING: 13 /0 9 /2021 DATE OF PRONOUNCEMENT: 30 /0 9 /2021 O R D E R PER S.S. GODARA , J .M.: THIS ASESSEES APPEAL IS DIRECTED AGAINST THE CIT(A) , TIRUPATHIS ORDER DATED 2 3 /0 4 /20 19 IN CASE NO. 101 99 /201 7 - 18/CIT(A)/TPT INVOLVING PROCEEDINGS U/S 143(3) R.W.S. 263 OF THE INCOME TAX ACT, 1961 [IN SHORT THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. IT TRANSPIRES DURING THE COURSE OF HEARING THAT THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE RAISED IN THE INSTANT LIS SEEK S TO REVERSE BOTH THE LOWER AUTHORITIES ACTION MAKING UNEXPLAINED INVESTMENT ADDITION OF RS. 2,01,98,400/ - IN THE COURSE OF SEC 143(3) R.W.S. 263 PROCEEDINGS. ITA NO. 761/H/19 AY 2008 - 09 [LATE ETTI SRIRAMULU REDDY] L/R BY : SMT B VANI AND SMT M VIJAYA LAKSHMI 2 A FEW FACTS GOING TO THE ROOT OF THE MATTER ARE NOTICED . 2. C ASE FILE SUGGESTS THAT THE ASSESSING OFFIC ER HAD FRAMED SEC. 143(3) R.W.S. 147 ASSESSMENT ON 31.3.2016 WHICH STOOD REVISED BY THE PR.CIT IN HIS ORDER DATED 9.3.2017 AS AN ERRONEOUS ONE CAUSING PREJUDICE TO THE INTEREST OF R EVENUE. IT IS IN THE INSTANT ROUND OF CONSEQUENTIAL PROCEEDINGS THAT BOTH THE LOWER AUTHORITIES HAVE MADE UNEXPLAINED INVESTMENT ADDITION IN ASSESSEES HANDS. 3 . NOW COMES THE CRUX OF THE LEGAL ISSUE REGARDING VALIDITY OF SEC. 143(3) RWS 147 ASSESSMENT FRAMED IN ASSESSEES CASE. THE REVENUES VEHEMENT STAND BEFORE US IS THAT MERE NON - ISSUANCE OF SEC. 143( 2 ) NOTICE THEREIN AFTER FILING OF RETURN ASSESSEES RETURN OUGHT NOT FORM THE SUBJECT MATTER BEFORE US IN THE INSTANT CONSEQUENTIAL PROCEEDINGS. WE FIND NO MERIT IN R EVENUES INSTANT ARGUMENT IN LIGHT OF KIRAN SINGH AND OT HERS VS. CHAMAN PAWAN AIR 1954 SC 340 WHEREIN THEIR LORDSHIPS HELD THAT A DECREE BY THE COURT HAVING NO JURISDICTION IS A NULLITY WHICH COULD BE CHALLENGED IN EXECUTION PROCEEDINGS . CASE LAW DEEPCHAND KOTHARI VS CIT (1988) 179 ITR 381 (RAJ.) H OLDS THAT THE VERY REASONING APPLIES IN INCOME TAX PROCEEDINGS AS WELL. COUPLED WITH THIS, THIS TRIBUNALS COORDINATE BENCH IN M /S C LASSIC F LOUR AND F OOD P ROCESSING PRIVATE LTD. VS. CIT IN ITA 764 TO 767/K O L /2017 HOLDS THAT AN ASSESSMENT IS PRIMARY AND SEC. 263 REVISION IS IN THE NATURE OF COLLATERAL PROCEEDINGS WHERE IN THE FORMERS VALIDITY COULD ALWAYS BE CHALLENGED IN LATTER ROUND . WE ALSO DEEM IT APPROPRIATE TO QUOTE PV DOSHI VS CIT (1978) 113 ITR 2 21 (GUJ.) THAT NO WAIVER APPLIES IN CASE OF A PURE LEGAL ISSUE GOING TO THE ROOT OF THE MATTER. 4 . WE TAKE INTO ACCOUNT THE FOREGOING LEGAL PROPOSITION AND NOTICE THAT THE ASSESSING OFFICERS RE - ASSESSMENT HEREIN DATED 31 .0 3.201 5 HAD BEEN FRAMED WITHOU T ISSUING ANY NOTICE U/S 143(2) OF THE ACT DESPITE THE FACT THAT THE ASSESSEES CORRESPONDING RETURN FILED IN RESPONSE TO SEC.148 NOTICE HAD BEEN TREATED AS A VALID ONE. WE THUS QUOTE CASE LAW ACIT VS HOTEL BLUE M OON ITA NO. 761/H/19 AY 2008 - 09 [LATE ETTI SRIRAMULU REDDY] L/R BY : SMT B VANI AND SMT M VIJAYA LAKSHMI 3 (2010) 321 ITR 362 (SC) THAT AN ASS ESSMENT FRAMED IN ABSENCE OF S EC.143(2) NOTICE IS A NULLITY AND ADOPT THE SAME REASONING HEREIN AS WELL TO TREAT THE IMPUGNED RE - ASSESSMENT DATED 31.03.2015 AS NOT SUSTAINABLE IN LAW . T HE SAME STANDS QUASHED TO THE LIMITED EXTENT OF CORRECTNESS OF TH E IMPUGNED PROCEEDINGS ARISING UNDER SEC. 263 REVISION DIRECTIONS WHICH ALSO FOLLOW THE SUIT . IT IS MADE CLEAR THAT AS A MATTER OF ADEQUATE CAUTION THAT ANY ADDITION OR DISALLOWANCE MADE IN THE SAID ASSESSMENT DATED 31. 0 3.201 5 SHALL CONTINUE TO HOLD GOOD . ALL OTHER PLEADINGS ON MERIT S ARE RENDERRED INFRUCTUOUS SINCE WE HAVE QUASHED THE IMPUGNED PROCEEDINGS IN ABOVE TERMS. THI S ASSESSEES APPEAL IS ALLOWED IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER, 2021. SD/ - SD / - (L.P. SAHU) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT. 30 .0 9 .2021. * GMV COPY TO : 1. LATE S RI ETTI SRIRAMULU REDDY, REPRESENTED BY L/RS : SMT. B. VANI AND SMT. M. VIJAYA LAKSHMI DOOR NO. 9 - 52, DAMINEEDU (V), TIRUCHANOOR POST, TIRUPATI 2. I T O, WARD 1(2), TIRUPATHI, A.P. 3. J CIT, RANGE - 1 , TIRUPATHI . 4 . CIT(A) , TIRUPATHI . 5 . PR. CIT , TIRUPATHI . 6. CHIEF CITT, VIJAYAWADA 7 . DR, ITAT, HYDERABAD. 8 . GUARD FILE.