Srinivas Babu, Hyderabad V. ACIT, Central Circle-3, Hyderabad

ITA 953/HYD/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3043 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-02-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 06-06-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Keywords: Search and seizure; Question of law
• Section: 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 952/HYD/2013 953/HYD/2013 2006-07 2007-08 SHRI SRINIVAS BABU, HYDERABAD (PAN ADEPG 7368 N) ASSTT. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 3, HYDERABAD 1149/HYD/2013 1150/HYD/2013 2006-07 2007-08 DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 3, HYDERABAD SHRI SRINIVAS BABU, HYDERABAD (PAN ADEPG 7368 N) ASSESSEE BY : SHRI K.C.DEVDAS DEPARTMENT BY : SHRI M.SITARAM DR DATE OF HEARING 10.2.2016 DATE OF PRONOUNCEMENT 10.2.2016 O R D E R PER BENCH : THESE CROSS APPEALS PERTAIN TO ASSESSMENT YEARS 2 006-07 AND 2007-08 AND THEY ARISE OUT OF THE ORDERS PASSED BY THE ASSESSING OFFICER UNDER S.143(3) READ WITH S.153C OF THE INC OME TAX ACT, 1961. 2. IN THE APPEALS FILED BY THE ASSESSEE, THE FOLLO WING ADDITIONAL GROUNDS, AS TAKEN FROM THE APPEAL FOR AS SESSMENT YEAR 2006-07(ITA NO.952/HYD/2013), WERE RAISED BY THE AS SESSEE 1. THE LEARNED CIT(A) FAILED TO NOTE THAT THE SATISFACTION AS ENJOINED IN SECTION 153C OF THE IT ACT,1961 THAT THE APPELLANT HAD UNDISCLOSED INCOME NOT HAVING BEEN RECORDED BY THE ASSESSING OFFICER IN THE ASSESSMENT FILE OF AMR CONSTRUCTION(P)LTD WHO WAS SUBJECT TO PROCEEDINGS U/S. 132 OF THE ITA ACT, 1961 AND ITA NO.952/HYD/2013 & THREE OTHERS SHRI SRINIVAS BABU, HYDERABAD 2 THEREFORE THE ORDER PASSED U/S. 153(3) R.W.S. 153C OF THE IT ACT, 1961 IN THE CASE OF THE APPELLANT FO R THE ASSESSMENT YEAR 2006-2007** IS BAD IN LAW INVALID WITHOUT JURISDICTION AND MUST BE ANNULLED. 2. THE LEARNED CIT(A) FAILED TO NOTE THAT THE ASSESSING OFFICER HAD NO JURISDICTION TO ASSESS OR/AND RE-ASSESS THE INCOME OF THE APPELLANT U/S. 153C OF THE INCOME TAX ACT,1961 IN RESPECT OF THE ASSESSMENT YEARS 2006-2007 AND 2007-2008. ** 2007-2008 IN APPEAL FOR ASSESSMENT YEAR 2007- 08(ITA NO.953/HYD/2013) LEARNED COUNSEL SUBMITTED THAT FACTS NECESSARY FOR CONSIDERATION OF THE ADDITIONAL GROUNDS ARE ALREADY ON RECORD, AND T HERE BEING A PURE QUESTION OF LAW INVOLVED IN THE ADDITIONAL GROUNDS, SUPPORTED BY THE JUDGMENT OF THE APEX COURT AS WELL AS THE CIRCULAR ISSUED BY THE CBDT, THE SAME DESERVE TO BE ADMITTED. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE, WE ADMIT THE ADDITIONAL GROUNDS. 3. FACTS CONCERNING THE ISSUE ARE STATED IN BRIEF . SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED IN THE CASE OF M/ S.AMR CONSTRUCTION LIMITED GROUP ON 16.12.2008 UNDER S.13 2 OF THE INCOME- TAX ACT. CERTAIN INCRIMINATING MATERIAL/DOCUMENTS PERTAINING TO THE ASSESSEE APPEAR TO HAVE BEEN FOUND DURING THE COURS E OF SUCH SEARCH, AND HENCE, THE ASSESSING OFFICER INITIATED PROCEEDI NGS UNDER S.153C OF THE ACT. IN RESPONSE TO THE NOTICE ISSUED, ASSESSEE FILED A LETTER STATING THAT RETURNS FILED EARLIER FOR THE ASSESSMENT YEARS UNDER CONSIDERATION SHOULD BE TREATED AS RETURNS FILED IN RESPONSE TO N OTICE UNDER S.153C OF THE ACT. ASSESSMENTS WERE THEREAFTER COMPLETED ON A TOTAL INCOME OF RS.63 LAKHS AND RS.13,92,72,438 RESPECTIVELY FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08 BY MAKING CERTAIN ADDITI ONS/DIS- ALLOWANCES. ON APPEAL, THE CIT(A) PARTLY ACCEPTED THE CONTENTIONS OF THE ASSESSEE, AND THUS, THE REVENUE AS WELL AS THE ASSESSEE ARE IN APPEAL BEFORE THE TRIBUNAL. ITA NO.952/HYD/2013 & THREE OTHERS SHRI SRINIVAS BABU, HYDERABAD 3 4. BY WAY OF ADDITIONAL GROUND, THE ASSESSEE CONTE NDS THAT IN ORDER TO ASSUME JURISDICTION UNDER S.153C OF THE AC T, IT IS MANDATORY ON THE PART OF THE ASSESSING OFFICER, IN THE ASSESS MENT FILE OF M/S. AMR CONSTRUCTIONS P. LTD., WHICH WAS SUBJECT TO PRO CEEDINGS 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 M/ S. AMR CONSTRUCTION P. LTD., THE ACIT, CENTRAL CIRCLE III, HYDERABAD HA S NO JURISDICTION TO INITIATE THE PROCEEDINGS UNDER S.153C OF THE ACT IN THE CASE OF THE ASSESSEE HEREIN. IN THIS REGARD, THE ASSESSEE PLAC ED BEFORE US A COPY OF CIRCULAR NO.24/2015 ISSUED BY THE 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. 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 ITA NO.952/HYD/2013 & THREE OTHERS SHRI SRINIVAS BABU, HYDERABAD 4 ACT AND IN THE ABSENCE OF FOLLOWING OF SUCH PROCEDU RE, THE ASSESSMENTS FRAMED UNDER S.153C DESERVE TO BE QUASHED. 5. 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 INCRIMINATI NG 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 ORDER PASSED BY THE ASSESSING OFFICER. 6. 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 BY THE CBDT(BINDING UPON THE REVENUE), WE ARE OF THE VIEW THAT THE PROCEEDINGS INITIATED UNDER S.153C OF THE ACT FOR THESE TWO YEARS DESERVE TO BE QUASHED IN AS MUCH AS THE CONCERNED ASSESSING OFFICER HAS ADMITTEDLY NOT RECORDED ANY SATISFACTION BEFORE FORWARDING THE FILES TO THE ASSESSING OFFICER IN WHOSE CHARGE, THE ASSES SEE HEREIN IS ASSESSED. IN OTHER WORDS, THE ASSESSMENTS MADE UND ER S.153C OF THE ACT ARE HEREBY QUASHED. IN THIS VIEW OF THE MATTER, THE OTHER GROUNDS URGED BY THE REVENUE AS WELL AS THE ASSESSEE HAVE N O LEGS STAND, SINCE THE ASSESSMENTS FOR BOTH THE YEARS ARE QUASHE D. 7. IN THE RESULT, AS PRONOUNCED IN THE OPEN COURT , APPEALS FILED BY THE ASSESSEE ARE TREATED AS ALLOWED AND TH E APPEALS FILED BY THE REVENUE ARE TREATED AS DISMISSED. SD/- SD/- (S.RIFAUR RAHMAN) (D.MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT DT/- 10 TH FEBRUARY, 2016 ITA NO.952/HYD/2013 & THREE OTHERS SHRI SRINIVAS BABU, HYDERABAD 5 COPY FORWARDED TO: 1. SHRI SRINIVAS BABU, 8 - 3 - 903/8, NAGARJUNA NAGAR, AMEERPET, HYDERABAD 2. DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 3, HYDERABAD 3. ASST COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 3, HYDERABAD 4. COMMISSIONER OF INCOME - TAX(APPEALS) V, HYDERABAD 5. COMMISSIONER OF INCOME-TAX CENTRAL, HYDERABAD 6. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.