Sri Pathi Ravi Kumar, Hyd, Hyderabad V. DCIT, Central Circle -7, Hyderabad

ITA 964/HYD/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5981 (ITAT-HYDERABAD)
• Duration Of Justice: 5 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 19-10-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2011
• Court: TRIBUNAL
• Department Lawyers: A SITARAMA RAO
• Keywords: Search and seizure; Assessment record
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. ASST. YEAR APPELLANT RESPONDENT 952/HYD/11 2006 - 07 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-7, HYDERABAD SRI P ATHI RAVI KUMAR, HYDERABAD [PAN: ABPPP3447E] 964/HYD/11 2006 - 07 SRI PATHI RAVI KUMAR, HYDERABAD [PAN: ABPPP3447E] DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-7, HYDERABAD 392/HYD/11 2007 - 08 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-7, HYDERABAD SRI P ATHI RAVI KUMAR, HYDERABAD [PAN: ABPPP3447E] C.O. NO. ASST. YEAR CROSS-OBJECTOR RESPONDENT 02/HYD/16 (IN ITA NO. 392/HYD/11) 2007 - 08 SRI P ATHI RAVI KUMAR, HYDERABAD [PAN: ABPPP3447E] DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-7, HYDERABAD FOR REVENUE : SHRI A. SITARAMA RAO, DR FOR ASSESSEE : SHRI K.C. DEVDAS, AR DATE OF HEARING : 23-11-2016 DATE OF PRONOUNCEMENT : 07-12-2016 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE ARE CROSS-APPEALS BY REVENUE AND ASSESSEE FOR THE AYS. 2006-07 & 2007-08. THE MAIN APPEALS ARE BY RE VENUE AGAINST THE ORDER(S) OF THE COMMISSIONER OF INCOME TAX (APPEALS)- VII, HYDERABAD, DATED 24-12-2010 ON THE RELIEF GRANT ED BY THE CIT(A). ASSESSEE IS IN APPEAL FOR AY. 2006-07 ON TH E PART OF THE AMOUNT CONFIRMED BY THE LD.CIT(A). HOWEVER, ASSESSEE HAS RAISED ITA NOS. 952/HYD/11, 964/HYD/11, 392/HYD/11 & C.O. NO. 02/HYD/16 :- 2 -: PRELIMINARY GROUND THAT AO HAS NOT RECORDED THE SATISFA CTION FOR INITIATING THE PROCEEDINGS IN THE HANDS OF ASSESSEE U /S. 153C OF THE INCOME TAX ACT [ACT], WHEREAS SEARCH AND SEIZURE OPERATIONS HAVE BEEN CONDUCTED IN THE CASE OF M/S. PRESTIGE AVEN UES LIMITED AND M/S. BHUVI VENTURES (P) LTD. 2. IN THE PRESENT PROCEEDINGS, IT IS ALSO NOTICED THAT THE FORMS FILED BY THE REVENUE ARE DEFECTIVE AND THE LD. D R WAS ASKED TO FILE THE REVISED FORMS. LD.DR PLACED ON RECORD HIS LETTER ADDRESSED DT. 28-04-2016 TO THE DCIT-4(1), AAYAKAR B HAVAN, HYDERABAD INFORMING AS UNDER (RELEVANT PARAGRAPHS): 2. DURING THE COURSE OF APPEAL PROCEEDINGS, THE HO N'BLE ITAT, THE ABOVE TWO DEPARTMENTAL APPEALS HAVE BEEN FILED IN O LD FORMAT OF FORM NO. 36 (CONTAINING 14 COLUMNS) WHEREAS IT SHOULD HAVE B EEN FILED IN NEW FORMAT OF FORM NO. 36 (CONTAINING 12 COLUMNS) WHICH REQUIRES TO BE REVISED. THE HON'BLE BENCH HAS ALSO OBSERVED THAT THE FORMS WERE NOT ACCOMPANIED WITH ALL THE REQUIRED DOCUMENTS AND, HE NCE, ALL THE FORMS ARE DEFECTIVE. YOU ARE REQUESTED TO FILE THE RECTI FIED FORMS (IN TRIPLICATE) DIRECTLY TO THE ASST. REGISTRAR, ITAT, A-BENCH, CGO TOWERS, KAVADIGUDA, HYDERABAD WITH A COPY TO THIS OFFICE. 3. FURTHER, A COPY OF FORM NO. 36A FILED BY THE ASS ESSEE FOR THE ASST. YEAR 2007-08 AND ADDITIONAL GROUNDS FILED IN AY 2006-07 ARE ENCLOSED HEREWITH. IT HAS BEEN CONTENDED BY THE ASS ESSEE THAT THE ASSESSING OFFICER HAVING JURISDICTION UNDER 153A OF I.T. ACT HAS NOT RECORDED SATISFACTION NOTE WHILE INITIATING PROCEED INGS U/S. 153C OF THE I.T. ACT IN THE FILE OF SRI P. RAVI KUMAR. IN ORDE R TO COUNTER THE CONTENTION OF THE ASSESSEE, THE REQUISITE INFORMATION WHETHER SUCH SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER IN TERMS OF CLARIFICATION GIVEN IN CBDTS CIRCULAR NO. 24/2015 MAY KINDLY BE FURNISHED WITHIN ONE MONTH I.E., BY 31.05.2016. 4. . 2.1. THIS LETTER WAS FILED ON 03-08-2016 WHEN THE CA SE WAS TAKEN UP FOR HEARING AND A FINAL AND LAST CHANCE WAS GIVEN TO THE REVENUE ON THAT DAY ADJOURNING THE CASE TO 19-10-2010. AGAIN ON THAT DAY, LD. SR. AR-2, OF ITAT BENCH HAS REPORTED THA T THEY ARE ITA NOS. 952/HYD/11, 964/HYD/11, 392/HYD/11 & C.O. NO. 02/HYD/16 :- 3 -: NOT ABLE TO TRACE THE ASSESSMENT RECORDS. THE LETTER P RAYING FOR ADJOURNMENT IS AS UNDER: PRAYER FOR ADJOURNMENT APPEAL IN THE ABOVE CASE STANDS POSTED FOR HEARING ON 19.10.2016 (WEDNESDAY) BEFORE THE HON'BLE ITAT, A-BENCH, HYDER ABAD. ADJOURNMENT IS PRAYED FOR THE FOLLOWING REASONS. 1. THE ASSESSING OFFICER HAS REPORTED THAT HIS OFFICE IS YET TO TRACE THE ASSESSMENT RECORDS AND FURTHER EFFORTS ARE BEING MA DE TO TRACE THEM. 2. COPY OF THE ORDER SHEET NOTINGS/FILE NOTINGS OF THE THEN CIT (CENTRAL) HYDERABAD EVIDENCING THAT THE GROUNDS OF APPEAL HAV E BEEN APPROVED ARE YET TO BE RECEIVED. IT IS THEREFORE REQUESTED AN ADJOURNMENT MAY KINDLY BE GRANTED IN THE ABOVE CASE. THE APPEAL MAY KINDLY BE POSTED FO R HEARING AT ANY OTHER DATE CONVENIENT TO THE HON'BLE MEMBERS OF THE BENCH. THE INCONVENIENCE CAUSED IS SINCERELY REGRETTED. 2.2. GIVING ONE MORE CHANCE TO THE REVENUE, THE CASE WAS ADJOURNED TO 23-11-2016. LD. DR FAIRLY ADMITTED THAT THE Y ARE NEITHER ABLE TO TRACE THE ASSESSMENT RECORDS NOR ABLE TO TRACE THE SATISFACTION IN THE CASE OF EITHER P. RAVI KUMAR OR M/ S. PRESTIGE AVENUES LIMITED. 3. LD. COUNSEL SUBMITTED THAT ASSESSEE HAS RAISED PRELIMINARY ISSUE OF JURISDICTION U/S. 153C AND RELI ED ON THE BOARD CIRCULAR NO. 24/2015. 4. CONSIDERING THE FACTS OF THE CASE AND ARGUMENTS OF THE RIVAL PARTIES, IT IS TO BE ADMITTED THAT REVENUE NEITHER FILED PROPER APPEAL MEMO NOR ABLE TO FURNISH THE NECESSARY SATISFAC TION NOTE RECORDED FOR INITIATION OF PROCEEDINGS U/S. 153C. I T IS FOR THE REVENUE TO FURNISH THE NECESSARY RECORD TO PROVE THAT I T HAS ACQUIRED JURISDICTION PROPERLY TO INITIATE PROCEEDIN GS IN ASSESSEES ITA NOS. 952/HYD/11, 964/HYD/11, 392/HYD/11 & C.O. NO. 02/HYD/16 :- 4 -: CASE. IT IS SURPRISING TO KNOW THAT IN SPITE OF GIVING SO MANY OPPORTUNITIES IN THE LAST SIX MONTHS, REVENUE IS NEITHE R ABLE TO RECTIFY THE DEFECTS POINTED OUT NOR ABLE TO FURNISH THE RE LEVANT SATISFACTION NOTES RECORDED AT THE TIME OF INITIATION OF PROCEEDINGS. 5. THE BOARD VIDE ITS CIRCULAR NO. 24/2015 DT. 31-12 -2015 HAS DIRECTED THE PENDING LITIGATION WITH REGARD TO RE CORDING OF SATISFACTION NOTE U/S. 158BD/153C SHOULD BE WITHDRAWN /NOT PRESSED IF IT DOES NOT MEET THE GUIDELINES LAID DOWN B Y THE APEX COURT. THE BOARD CIRCULAR IS AS UNDER: THE ISSUE OF RECORDING OF SATISFACTION FOR THE PU RPOSES OF SECTION 158BD/153C HAS BEEN SUBJECT MATTER OF LITIGATION. 2. THE HON'BLE SUPREME COURT IN THE CASE OF M/S. CA LCUTTA KNITWEARS IN ITS DETAILED JUDGMENT IN CIVIL APPEAL NO. 3958 OF 2014 DATED 12.3.2014 (AVAILABLE IN NJRS AT 2014-LD. COUN SEL-0312-51) HAS LAID DOWN THAT FOR THE PURPOSE OF SECTION 158BD OF THE ACT, RECORDING OF A SATISFACTION NOTE IS A PREREQUISITE AND THE SATISFACTION NOTE MUST BE PREPARED BY THE AO BEFORE HE TRANSMITS THE RECORD TO THE OTHER AO WHO HAS JURISDICTION OVER SUCH OTHER P ERSON U/S. 158BD. THE HON'BLE COURT HELD THAT THE SATISFACTI ON NOTE COULD BE PREPARED AT ANY OF THE FOLLOWING STAGES: (A) AT THE TIME OF OR ALONG WITH THE INITIATION OF PROC EEDINGS AGAINST THE SEARCHED PERSONS UNDER SECTION 158BC OF THE ACT ; OR (B) IN THE COURSE OF THE ASSESSMENT PROCEEDINGS UNDER S ECTION 158BC OF THE ACT; OR (C) IMMEDIATELY AFTER THE ASSESSMENT PROCEEDINGS ARE CO MPLETED UNDER SECTION 158BC OF THE ACT OF THE SEARCHED PERS ON. 3. SEVERAL HIGH COURTS HELD THAT THE PROVISIONS OF SECTION 153C OF THE ACT ARE SUBSTANTIALLY SIMILAR/PARI-MATERIA TO T HE PROVISIONS OF SECTION 158BD OF THE ACT AND THEREFORE, THE ABOVE G UIDELINES OF THE HON'BLE SC, APPLY TO PROCEEDINGS U/S. 153C OF THE I T ACT, FOR THE PURPOSES OF ASSESSMENT OF INCOME OF OTHER THAN THE SEARCHED PERSON. THIS VIEW HAS BEEN ACCEPTED BY CBDT. 4. THE GUIDELINES OF THE HON'BLE SUPREME COURT AS R EFERRED TO IN PARA 2 ABOVE, WITH REGARD TO RECORDING OF SATISFACT ION NOTE, MAY BE BROUGHT TO THE NOTICE OF ALL FOR STRICT COMPLIANCE. IT IS FURTHER CLARIFIED THAT EVEN IF THE AO OF THE SEARCHED PERSON AND THE OTHER PERSON IS ITA NOS. 952/HYD/11, 964/HYD/11, 392/HYD/11 & C.O. NO. 02/HYD/16 :- 5 -: ONE AND THE SAME, THEN ALSO HE IS REQUIRED TO RECOR D HIS SATISFACTION AS HAS BEEN HELD BY THE COURT. 6. SINCE REVENUE FAILED TO FURNISH THE NECESSARY SATISFACTION NOTE, IT IS TO BE PRESUMED THAT IT HAS NOT REC ORDED THE SATISFACTION. CONSEQUENTLY, WE FIND THAT THERE IS NO M ERIT IN REVENUE APPEALS WHICH SHOULD HAVE BEEN WITHDRAWN AS PER THE BOARD CIRCULAR. SINCE THE PROCEEDINGS ARE NOT PROPER , THE QUESTION OF SUSTAINING THE ADDITIONS DOES NOT ARISE. IN VIEW O F THAT, ASSESSEES CROSS APPEAL IN ITA NO. 964/HYD/2011 ON THE PARTLY CONFIRMED AMOUNT IS TO BE ALLOWED, AS THE PROCEEDINGS ITSELF ARE BAD IN LAW. IN VIEW OF THAT, REVENUE APPEALS ARE DIS MISSED AND ASSESSEES APPEAL AND THE CROSS-OBJECTION ARE TREATED AS ALLOWED ON THE PRELIMINARY ISSUE U/S. 153C. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH DECEMBER, 2016 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 7 TH DECEMBER, 2016 TNMM ITA NOS. 952/HYD/11, 964/HYD/11, 392/HYD/11 & C.O. NO. 02/HYD/16 :- 6 -: COPY TO : 1.THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CI RCLE-7, HYDERABAD. 2. SRI PATHI RAVI KUMAR, HYDERABAD. C/O. RAO & SAI ADVOCATES & TAX CONSULTANTS, 6-3-5701&2, ROCKVISTA, ROCKDALE COMPOUND, SOMAJIGUDA, HYDERABAD. 3. THE COMMISSIONER OF INCOME TAX (APPEALS)-VII, HY DERABAD. 4. THE COMMISSIONER OF INCOME TAX (CENTRAL), HYDERA BAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.