The DCIT, Circle-1(1), Guntur V. M/s Lavu Educational Society, Guntur

ITSSA 1/VIZ/2011

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8050 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 03-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 19-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TH L PETER
• Keywords: Block assessment
• Section: 147; 148

Judgement Text

ITA NO1/V/2011 LAVU EDUCATIONAL SOCIETY, GUNTUR. 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER IT (SS) A NO. 1 /VIZAG/ 20 11 BLOCK PERIOD 1990 - 91 TO 1999 - 2000 DCIT, CIRCLE - 1(1) GUNTUR VS. LAVU EDUCATIONAL SOCIETY GUNTUR (APPELLANT) (RESPONDENT) PAN NO.AAAAL 0584H APPELLANT BY: SHRI TH.L. PETER, CIT(DR) RESPONDENT BY: SHRI G.V.N. HARI, CA ORDER PER SHRI S.K. YADAV, JUDICIAL MEMBER:- THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST T HE ORDER OF THE CIT ON VARIOUS GROUNDS WHICH ARE AS UNDER: 1. THE ORDER OF THE CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE CIT(A) HAS ERRED IN DELETING THE ADDITION ON TH E GROUND THAT THE MATTERS HAVE ALREADY BEEN CONCLUDED BEFORE THE APPELLATE AUTHORITIES. THE ITAT HELD THAT THE DONATIONS PERT AIN TO LAVU EDUCATIONAL SOCIETY. 3. THE CIT(A) OUGHT TO HAVE CONFIRMED THE ADDITION AS THE ITAT HAS GIVEN A FINDING THAT THE SEIZED MATERIAL REVEALED T HAT THE DONATIONS PERTAIN TO SOCIETY ONLY. THE UNDISCLOSED INCOME HA S TO BE ASSESSED EITHER IN THE HANDS OF THE FOUNDER SRI RAT TAIAH OR IN THE HANDS OF THE SOCIETY. 4. THE CIT(A) HAS ERRED IN STATING THAT NO REASONS WER E RECORDED, SINCE THE ORDER SHEET NOTING DT. 5.10.2001 REVEALED THE SATISFACTION OF THE AO FOR ISSUANCE OF NOTICE U/S 158BD. 5. THE ITATS FINDING REGARDING NO SATISFACTION RECORD ED BY THE A.O. FOR MAKING ASSESSMENT U/S 158BD IS FACTUALLY INCORR ECT. 6. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF H EARING. 2. DURING THE COURSE OF THE HEARING OUR ATTENTION W AS INVITED TO THE FACT THAT THE SEARCH WAS CONDUCTED UPON DR. L. RATTAIAH, CHAIRMAN OF THE ASSESSEE SOCIETY. BUT THE BLOCK ASSESSMENT WAS FRA MED IN THE HANDS OF THE DR. L. RATTAIAH AS WELL AS THE ASSESSEE. WHEN THE MATTER WAS TRAVELLED TO THE TRIBUNAL, THE TRIBUNAL HAS GIVEN A SPECIFIC FINDING IN ITS ORDER DATED 24.8.2007 THAT THE BLOCK ASSESSMENT FRAMED IN THE HANDS OF TH E ASSESSEE SOCIETY WAS ITA NO1/V/2011 LAVU EDUCATIONAL SOCIETY, GUNTUR. 2 NOT SUSTAINABLE AS THE ASSESSING OFFICER OF DR. L. RATTAIAH HAS NOT RECORDED VALID SATISFACTION AS REQUIRED U/S 158BD OF THE ACT . THE TRIBUNAL ACCORDINGLY DECLARED THE BLOCK ASSESSMENT PROCEEDINGS INITIATED IN THE HANDS OF THE ASSESSEE AS INVALID. THE ASSESSING OFFICER PASSED AN ORDER CONSEQUENT TO THE ORDER OF THE TRIBUNAL U/S 150 OF THE ACT AND FRAMED THE ASSESSMENT IN THE HANDS OF THE ASSESSEE SOCIETY AFTER TAKING A RECOUR SE OF PROVISIONS OF SECTION 147 OF THE ACT. THIS ORDER WAS CHALLENGED BEFORE T HE CIT(A) AND THE CIT(A) CONFIRMED THE REOPENING OF THE ASSESSMENT U/S 147 O F THE ACT BUT DELETED THE ADDITION ON THE GROUND THAT THE ISSUE WAS ALREADY A DJUDICATED BY THE TRIBUNAL IN ITS ORDER DATED 24.8.2007. NOW THE REVENUE IS B EFORE US WITH THE SUBMISSION THAT THE ASSESSMENT WAS REOPENED BY THE ASSESSING OFFICER ON THE BASIS OF THE INFORMATION RECORDED IN THE ORDER OF T HE TRIBUNAL. THEREFORE, THE ADDITIONS MADE BY THE ASSESSING OFFICER IN THE HAND S OF THE ASSESSEE SOCIETY DESERVE TO BE CONFIRMED. 3. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND HAS SUBMITTED THAT THE TRIBUNAL HAS NOT GIVEN ANY DIRECTIONS ON THIS I SSUE AND HAS SIMPLY DECLARED THE ASSESSMENT PROCEEDINGS INITIATED IN TH E HANDS OF THE ASSESSEE SOCIETY AS INVALID IN THE ABSENCE OF SATISFACTION R ECORDED BY THE A.O. OF DR. L. RATTAIAH IN TERMS OF SECTION 158BD OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER CONTENDED THAT ASSESSING OFFIC ER HAS INVOKED THE PROVISIONS OF SECTION 147 TO REOPEN THE BLOCK ASSES SMENT WHILE PASSING A CONSEQUENTIAL ORDER U/S 150 OF THE ACT. WHEREAS, N O CONSEQUENTIAL ORDER WAS REQUIRED TO BE PASSED U/S 150. MOREOVER, THE TRIBU NAL HAS MADE A SPECIFIC FINDING WITH REGARD TO THE BLOCK ASSESSMENT FRAMED BY THE ASSESSING OFFICER. THEREFORE, THE A.O. HAS NO JURISDICTION TO REOPEN T HE BLOCK ASSESSMENT. MOREOVER, THE REOPENING OF THE ASSESSMENT CAN BE MA DE FOR A PARTICULAR YEAR AND NOT FOR A BLOCK ASSESSMENT, AS THE BLOCK ASSESS MENT IS ALWAYS FRAMED ON THE BASIS OF THE CONCLUSIVE EVIDENCE AND NOT ON THE BASIS OF PRESUMPTIONS OR BELIEF. 4. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CA REFUL PERUSAL OF THE ORDERS OF LOWER AUTHORITIES AND THE MATERIAL AVAILA BLE ON RECORD, WE FIND THAT THE SEARCH WAS CONDUCTED IN THE HANDS OF DR. L. RAT TAIAH BUT THE BLOCK ITA NO1/V/2011 LAVU EDUCATIONAL SOCIETY, GUNTUR. 3 ASSESSMENT WAS FRAMED IN THE HANDS OF DR. L. RATTAI AH AND ALSO IN THE HANDS OF THE ASSESSEE SOCIETY BY INVOKING THE PROVISIONS OF SECTION 158BD OF THE ACT. THE ASSESSMENT FRAMED IN THE HANDS OF THE ASS ESSEE SOCIETY WAS KNOCKED DOWN BY THE TRIBUNAL ON THE GROUND THAT SAT ISFACTION REQUIRED U/S 158BD OF THE ACT WAS NOT RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER DR. L. RATTAIAH. THE TRIBUNAL HAS CATEGORICAL LY DECLARED THE BLOCK ASSESSMENT FRAMED IN THE HANDS OF THE ASSESSEE SOCI ETY AS INVALID AND NO FURTHER DIRECTIONS WERE ISSUED TO THE REVENUE. THE ASSESSING OFFICER WRONGLY INVOKED THE PROVISIONS OF SECTION 150 OF THE ACT AN D FRAMED THE ASSESSMENT AFTER ISSUING A NOTICE U/S 148 OF THE ACT FOR REOPE NING OF THE BLOCK ASSESSMENT. WHERE THE SPECIFIC FINDINGS WERE GIVEN BY THE TRIBUNAL IN RESPECT OF THE BLOCK ASSESSMENT WITH REGARD TO THE PARTICULAR ISSUE, THE BLOCK ASSESSMENT CANNOT BE REOPENED. THE PROVISIONS OF S ECTION 150 WERE WRONGLY INVOKED AS NO DIRECTIONS WERE GIVEN BY THE TRIBUNAL . IF THE ASSESSING OFFICER INTENDS TO INVESTIGATE THE IMPUGNED ISSUE A RECOURS E AVAILABLE WITH HIM WAS ONLY TO REOPEN THE ASSESSMENT IF TIME PERMITS FOR T HE RELEVANT ASSESSMENT YEAR IN WHICH THE DONATION WAS RECEIVED. HE HAS NO JURISDICTION TO REOPEN THE BLOCK ASSESSMENT. THEREFORE, THE ACTION OF THE ASSESSING OFFICER IS NOT CORRECT. WE, HOWEVER, CAREFULLY EXAMINED THE ORDER OF THE CIT(A) AND WE FIND THAT CIT(A) HAS RIGHTLY ADJUDICATED THE ISSUE IN HIS ORDER AND WE FIND NO INFIRMITY THEREIN. WE ACCORDINGLY, CONFIRM HIS ORD ER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN CO URT ON 3.8.2011 SD/- SD/- (BR BASKARAN) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER VG/SPS VISAKHAPATNAM, DATED 3 RD AUGUST, 2011 ITA NO1/V/2011 LAVU EDUCATIONAL SOCIETY, GUNTUR. 4 COPY TO 1 THE DCIT, CIRCLE - 1(1), GU NTUR 2 LAVU EDUCATIONAL SOCIETY, 4/7, BRODIPET, GUNTUR 3 THE CI T, GUNTUR 4 THE CIT (A) , GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM