Rajesh Naidu Munirathnam, Hyderabad, Hyderabad V. DCIT, Central Circle-1(3), Hyderabad, Hyderabad

ITA 876/HYD/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2579 (ITAT-HYDERABAD)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 22-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: A V RAGHURAM
• Keywords: Search and seizure; Opportunity of being heard; Condonation of delay
• Section: 153A; 132; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 876/HYD/2017 ASSESSMENT YEAR: 2012-13 RAJESH NAIDU MUNIRATHNAM, HYDERABAD. PAN ADMPM 6749F VS. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE (1)(3), HYD. APPELLANT RESPONDENT ITA NO. 877/HYD/2017 ASSESSMENT YEAR: 2012-13 KALPANA RAJ MUNIRATHNAM, HYDERABAD. PAN AFXPM 1529A VS. DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE (1)(3), HYD. APPELLANT RESPONDENT ASSESSEE BY: SHRI A.V. RAGHURAM REVENUE BY: SMT. SUMAN MALIK DATE OF HEARING: 01/02/2018 DATE OF PRONOUNCEMENT: 02/02/2018 O R D E R PER V. DURGA RAO, J.M: BOTH THESE APPEALS FILED BY THE ASSESSEES, WHO ARE HUSBAND AND WIFE, ARE DIRECTED AGAINST THE ORDERS OF CIT(A) 11, HYDERABAD BOTH, DATED 29/10/2016 FOR AY 2012-13 . AND 2013-14. AS IDENTICAL ISSUE IS INVOLVED IN THESE AP PEALS, THEY WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, A CONSOLIDATED ORDER IS PASSED FOR THE SAKE OF CONVEN IENCE. 2. BRIEFLY THE FACTS AS TAKEN FROM THE ASSESSEE SHR I RAJESH NAIDU MUNIRATHNAM ARE, THE ASSESSEE, AN INDIVIDUAL, IS THE I.T.A. NOS. 876 & 877/HYD/2017 RAJESH NAIDU M. AND KALPANA RAJ M 2 MANAGING DIRECTOR OF M/S GENERAL AGRI CORPORATION L TD., HYDERABAD. HE DID NOT FILE ANY RETURN OF INCOME ORI GINALLY. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME- TAX ACT, 1961 (IN SHORT THE ACT) WAS CONDUCTED ON 16/11/20 12, CONSEQUENT TO WHICH A NOTICE U/S 153A OF THE ACT WA S ISSUED ON 06/12/2013. IN RESPONSE, A RETURN OF INCOME WAS FILED ON 01/10/2014 ADMITTING AN INCOME OF RS. 5,87,51,850/- . THE AO PASSED AN ORDER U/S 144 R.W.S. 153A OF THE ACT ON 3 1/03/2015 DETERMINING THE ASSESSABLE INCOME OF THE ASSESSEE A T RS. 5,90,47,689/- BY BRINGING TO TAX THE CAPITAL GAINS ON SALE OF SHARES OF M/S GENERAL AGRI CORPORATION LTD. 2.1 SIMULTANEOUSLY, PENALTY PROCEEDINGS U/S 271(1)( C) WERE INITIATED. IN THE PENALTY PROCEEDINGS, THE ASSESSE E CONTESTED THAT THE ASSESSMENT OF CAPITAL GAINS WAS IN FACT WH AT WAS DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A AND IT WAS STATED THAT ASSESSMENT WAS NOT BASE D ON INCRIMINATING MATERIAL AND FURTHER URGED THAT THOUG H ASSESSMENT WAS NOT CONTESTED IN APPEAL, A PENALTY C OULD NOT BE LEVIED OF THE ASSESSMENT WAS TECHNICALLY INVALID . 2.2 AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE, THE AO REBUTTED THE OBJECTIONS BY STATING THAT JURISDIC TION WAS VALIDLY ASSUMED U/S 153A AND THE INCOME OFFERED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A WAS IN CONSEQU ENCE OF DETECTION DURING THE SEARCH, AND THAT THE INCOME AS SESSED WAS SOMETHING THAT SHOULD HAVE BEEN DISCLOSED IN A RETURN FILED U/S 139(1) IN THE FIRST PLACE. ACCORDINGLY, H E LEVIED A MINIMUM PENALTY OF RS. 1,35,00,000/-. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WITH A DELAY OF 70 DAYS I.T.A. NOS. 876 & 877/HYD/2017 RAJESH NAIDU M. AND KALPANA RAJ M 3 AND FILED AN AFFIDAVIT SEEKING CONDONATION OF DELAY OF 70 DAYS ALONG WITH A PETITION AND MEDICAL CERTIFICATE. 4. THE CIT(A) AFTER CONSIDERING THE PETITION FOR CO NDONATION AND MEDICAL CERTIFICATE ISSUED BY THE DOCTOR, OBSER VED THAT THERE WAS NO HOSPITALISATION AND THE PATIENT WAS TR EATED AT HOME WITH MEDICATION AND PHYSIOTHERAPY AND THE MEDI CAL CONDITION DISCERNIBLE FROM THE MEDICAL CERTIFICATE DOES NOT SUGGEST THAT ASSESSEES MEDICAL CONDITION COULD PRE VENT HIM FROM EVEN CONSULTING HIS COUNSEL, WHICH ERRAND IS B Y NO MEANS AN ARDOUS ACT. ACCORDINGLY, THE CIT(A) DISMISSED T HE APPEAL OF THE ASSESSEE IN-LIMINE ON THE GROUND THAT THE AS SESSEE HAS NOT BEEN ABLE TO MAKE OUT A CASE FOR SUFFICIENT CAU SE CONTEMPLATED IN SECTION 249(3) AS A RESULT OF WHIC H THE DELAY IN FILING THIS APPEAL CANNOT BE CONDONED. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF A PPEAL: 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOT H ON FACTS AND IN LAW. 2. THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEA L AS IN LIMINE WITHOUT CONDONING THE DELAY MERE ON THE B ASIS OF NON APPEARANCE FOR ONE HEARING, THOUGH THE MATER IAL REQUIRED FOR CONDONATION OF DELAY IS BEFORE HIM. 3. THE LEARNED CIT (A) ERRED IN RELYING A DECISION OF THE TRIBUNAL WHEN THE DECISION OF THE JURISDICTIONAL HI GH COURT IS VERY MUCH IN FAVOUR OF THE ASSESSEE TO THE EFFECT THAT WHERE THERE IS A GOOD CASE ON MERITS, T HE REVENUE SHOULD NOT STAND ON TECHNICALITIES OF DELAY , AND THEREBY ERRED IN DISMISSING THE APPEAL. 4. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE ASSESSMENT ORDER IS INVALID AND NO PENALTY COULD BE LEVIED ON AN INVALID ORDER AND THEREFORE O UGHT TO HAVE CONDONED THE DELAY AND DELETED THE PENALTY LEVIED UJS.271(1)(C). 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. I.T.A. NOS. 876 & 877/HYD/2017 RAJESH NAIDU M. AND KALPANA RAJ M 4 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE HEALTH CONDITION OF THE ASSESSEE WAS VERY BAD A ND AT THE RELEVANT POINT OF TIME HE WAS NOT ABLE TO MOVE AND WAS SUFFERING FROM SEVERE CERVICAL SPONDYLOSIS WITH DIS C PROTRUSION AND HE HAS DIABETES AND THYROID PROBLEM AS WELL AS HE GOT URINARY TRACT INFECTION. HE, THEREFORE, SUBMITTED T HAT UNDER THESE CIRCUMSTANCES, HE WAS NOT ABLE TO APPROACH TH E C.A. DUE TO WHICH THERE WAS A DELAY IN FILING THE APPEAL BEFORE THE CIT(A). HE PLEADED THAT THE DELAY MAY BE CONDONED A ND THE APPEAL MAY BE REMITTED BACK TO THE FILE OF THE CIT( A) WITH A DIRECTION TO ADJUDICATE THE SAME ON MERITS. 7. THE LD. DR, ON THE OTHER HAND, RELIED ON THE ORD ER OF CIT(A). 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDERS OF REVENUE AUTHORITIES. THERE WAS A DELA Y OF 70 DAYS IN FILING THE APPEAL BY THE ASSESSEE BEFORE TH E CIT(A). THE ASSESSEE FILED A DOCTOR CERTIFICATE DATED 26/12 /2015 BEFORE THE CIT(A), WHICH WAS REPRODUCED BY THE CIT( A) IN HIS ORDER AT PAGE 3 OF HIS ORDER. FOR THE SAKE OF CLARI TY, THE SAME IS REPRODUCED AS UNDER: 'THIS IS TO CERTIFY THAT MR.TN. RAJESH NAIDU, 49 YR S/MALE CAME TO OUR HOSPITAL ON 15.10.15 WITH COMPLAINTS OF WEAKNESS OF BOTH UPPER AND LOWER LIMBS (QUADRI PARESIS). HE WAS INVESTIGATED ACCORDINGLY MRI CERVI CAL SPINE SHOWED SEVERE CERVICAL SPONDYLOSIS WITH DISC PROTRUSION. HE WAS ADVISED FOR SURGERY. DUE TO HIS PERSONAL PROBLEMS HE CANNOT GET THE SURG ERY DONE. HE WAS ADVISED BED REST AND RESTRICT HIS PHYS ICAL ACTIVITIES. HE WAS TREATED AT HOME WITH MEDICATIONS , AND PHYSIOTHERAPY. TWO WEEKS LATER HE GOT URINARY TRACT INFECTION FOR WHICH IV ANTIBIOTICS WERE GIVEN BY HO ME NURSING. HIS AILMENTS DIABETES AND THYROID PROBLEM WERE TREATED ACCORDINGLY. HE HAD OPD FOLLOW UPS EVERY TW O WEEKS. HIS SYMPTOMS IMPROVED AFTER 2 MONTHS OF REGU LAR I.T.A. NOS. 876 & 877/HYD/2017 RAJESH NAIDU M. AND KALPANA RAJ M 5 PHYSIOTHERAPY AND MEDICATIONS. HE WAS REVIEWED AGAI N 23.12.15 ASSESSMENT DONE AND WAS PERMITTED TO CARRY OUT MIMAL PHYSICAL ACTIVITIES/ WORK TO HIS POSSIBLE EXTENT. HE WAS ALSO ADVISED FOR REGULAR FOLLOW UP.' 9. FROM THE MEDICAL CERTIFICATE, IT IS VERY CLEAR T HAT THE ASSESSEE IS SUFFERING FROM VARIOUS DISEASES, SUCH AS, SEVERE CERVICAL SPONDYLOSIS WITH DISC PROTRUSION AND HE HA S DIABETES AND THYROID PROBLEM AS WELL AS HE GOT URINARY TRACT INFECTION. UNDER THESE CIRCUMSTANCES, ASSESSEE WAS NOT ABLE TO APPROACH THE CA AND FILE THE APPEAL BEFORE THE CIT( A) WITHIN THE STIPULATED TIME. THOUGH, THE ASSESSEE WAS NOT A DMITTED IN THE HOSPITAL, BUT, FROM THE MEDICAL CERTIFICATE, IT IS CLEAR THAT ASSESSEE IS SUFFERING FROM VARIOUS DISEASES, FOR WH ICH HE NEEDS TO TAKE UP REST AS PER THE ADVICE OF THE DOCT OR. IN OUR OPINION, THE ASSESSEE IS PREVENTED BY SUFFICIENT CA USE IN NOT FILING THE APPEAL BEFORE THE CIT(A) IN TIME. ACCORD INGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE FILE BACK TO THE FILE OF THE CIT(A) WITH A DIRECTION TO CONDONE THE DELAY OF 70 DAYS IN FILING THE APPEAL BEFORE HIM AND ADJUDICATE THE APPEAL DE-NOVO, ON MERITS IN ACCORDANCE WITH LAW AFTER PRO VIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE IN THE MATTER. THE ASSESSEE IS DIRECTED TO APPEAR BEFORE T HE CIT(A) AS AND WHEN THE APPEAL IS FIXED FOR HEARING TO SUBS TANTIATE HIS CASE. 10. AS THE FACTS AND GROUNDS ARE MATERIALLY IDENTIC AL IN THE CASE OF KALPANA RAJ M TO THAT OF RAJESH NAIDU MUNIR ATHNAM (SUPRA), FOLLOWING THE CONCLUSIONS DRAWN THEREIN, W E RESTORE THIS APPEAL ALSO TO THE FILE OF THE CIT(A) WITH IDE NTICAL DIRECTIONS. I.T.A. NOS. 876 & 877/HYD/2017 RAJESH NAIDU M. AND KALPANA RAJ M 6 11. IN THE RESULT, BOTH THE APPEALS UNDER CONSIDERA TION ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 2 ND FEBRUARY, 2018. SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER SD/- (V. DURGA RAO) JUDICIAL MEMBER HYDERABAD, DATED 2 ND FEBRUARY, 2018 KV COPY FORWARDED TO: 1. 2 RAJESH NAIDU MUNIRATHNAM KALPANA RAJ MUNIRATHNAM, C/O S/SHRI K. VASANTKUMAR, AV RAGHURAM, P. VINOD & M. NEELIMA DEVI, ADVOCATES, 610 BABUKHAN ESTATE, BASHEERBAGH, HYDERABAD 500 001. 2. DCIT, CENTRAL CIRCLE 1(3), HYDERABAD. 3. CIT(A) - 11, HYDERABAD 4 PR. CIT (CENTRAL), HYDERABAD 5 THE DR, ITAT, HYDERABAD 6 GUARD FILE