DCIT, Hyderabad V. M/s Saisree Projects P. Ltd., Hyderabad

ITSSA 26/HYD/2007

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7671 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 10-02-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-03-2011
• Assessment Year: misc
• Appeal Filed On: 09-03-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: M V ANIL KUMAR
• Keywords: Principle of natural justice; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBE R. IT(SS)A NO.26/HYD/2007 & IT(SS)A NO.27/HYD/2007 (BLOCK PERIOD FROM 1991-92 TO 2000-01) DY. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE 1, HYDERABAD V/S M/S. SAI SREE PROJECTS, PVT. LTD., HYDERABAD (PAN - AAAECS 1674 F) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V.SRINIVAS RESPONDENTS BY : SHRI M.V.ANIL KUMAR DATE OF HEARING 7.2.2012 DATE OF PRONOUNCEMENT O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY THE REVENUE ONE ARISING OUT OF ASSESSMENT MADE UNDER S.158BD R.W.S.143(3) OF THE ACT AND THE OTHER IN THE CONTEXT OF PENALTY LEVIED UNDER S.158B FA OF THE ACT- ARE DIRECTED AGAINST THE ORDERS OF THE CIT(A) I, HYDERA BAD, BOTH DATED 13.12.2006. 2. LET US FIRST TAKE UP FOR CONSIDERATION THE QUAN TUM APPEAL, BEING IT(SS)A NO.26/HYD/2006. 3. THE FIRST EFFECTIVE GRIEVANCE OF THE REVENUE IN THIS APPEAL IS ON ACCOUNT OF THE ACTION OF THE CIT(A) IN CONDON ING THE DELAY IN THE FILING OF THE FIRST APPEAL BY THE ASSESSEE, BEFORE HIM. 4. LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED T HAT THE FIRST APPEAL WAS FIELD AS LATE AS 21 MONTHS AND THE ASSESSEE WAS IT(SS)A NO.26 & 27/HYD/2007 M/S. SAI SREE PROJECTS, PVT. LTD., HYD 2 RELUCTANT EVEN TO FILE THE RETURN OF INCOME IN RESP ONSE TO NOTICE ISSUED UNDER S.158BD OF THE ACT, AND THE ASSESSEE ALSO DID NOT RESPOND TO VARIOUS NOTICES ISSUED BY THE LOWER AUTHORITIES DU RING THE INCOME TAX PROCEEDINGS. IT IS ALSO PLEADED THAT THE ASSESSEE WAS HABITUAL IN SHOWING DISRESPECT AND DISREGARD TO INCOME-TAX PROC EEDINGS AND HAS NTO COMPLIED WITH THE NOTICES UNDER S.158BD AND 142 (1), ISSUED BY THE ASSESSING OFFICER FROM TIME TO TIME, AND THERE WAS NO BONA FIDE JUSTIFICATION TO CLAIM THE DELAY IN FILING THE APP EAL BEFORE THE CIT(A) AS GENUINE. IN THE CIRCUMSTANCES, THEREFORE, ACCORDING TO THE LEARNED DEPARTMENTAL REPRESENTATIVE, THERE WAS NO JUSTIFICA TION FOR THE CIT(A) TO CONDONE THE INORDINATE DELAY IN THE FILING OF TH E APPEAL BY THE ASSESSEE BEFORE HIM. 5. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OT HER HAND, STRONGLY SUPPORTED THE ORDER OF THE CIT(A) AND SUBM ITTED THAT THE DELAY IN THE FILING OF THE FIRST APPEAL BEFORE THE CIT(A) WAS FOR THE REASONS BEYOND THE CONTROL OF THE ASSESSEE, AND AS SUCH THE CIT(A) WAS JUSTIFIED IN CONDONING THE SAME. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE ORDER OF THE CIT(A) ON THE ISSUE OF CONDONATION OF DELAY. WE DO NOT FIND ANY MERIT IN THE GRIEVANCE OF THE REVENUE ON A CCOUNT OF THE CIT(A) CONDONING THE DELAY IN THE FILING OF THE FIR ST APPEAL BEFORE HIM. IT IS EVIDENT FROM THE ORDER OF THE CIT(A), MORE PA RTICULARLY PARA 4.1 THEREOF, THAT THE ASSESSEE WAS HELD UP, MOSTLY IN DELHI, DUE TO PROSECUTION CASES LODGED BY CBI, AND DURING THE RE LEVANT POINT OF TIME, ASSESSEE WAS REQUIRED TO ATTEND THE DAY TO D AY TRIAL FOR THE CRIMINAL CASE BEFORE THE BEFORE THE SPECIAL JUDGE, CBI COURT. THE CIT(A) FURTHER NOTED THAT THERE WAS NO PROOF THAT ASSESSMENT AORDER, DEMAND NOTICE, ETC. WERE SERVED ON THE ASSESSEE OR ON ANY OF HIS FAMILY MEMBERS OR ANY AUTHORIZED PERSON ON 1.3.2004 . HE FURTHER IT(SS)A NO.26 & 27/HYD/2007 M/S. SAI SREE PROJECTS, PVT. LTD., HYD 3 NOTED THAT WHEN COPY OF THE AFFIDAVIT AND WRITTEN S UBMSISIOSN WERE SENT TO THE ASSESSING OFFICER FOR HIS COMMENTS, THE ASSESSING OFFICER IN THE REMAND REPORT DATED 9.10.2006 HAS NOT BEEN ABLE TO FIND FAULT WITH THE SUBMISSIONS OF THE ASSESSEE, AND THE ASSESSEE S OON AFTER OBTAINING CERTIFIED COPIES HAS FIELD APPEAL AND REQUESTED TO CONDONE THE DELAY. IT IS CONSIDERING THESE CIRCUMSTANCES, THAT THE CIT (A) HAS CONDONED THE DELAY ON THE PART OF THE ASSESSEE IN PREFERRING THE APPEAL BEFORE HIM. WE FIND NO INFIRMITY IN THE ACTION OF THE CIT( A) IN THIS BEHALF. WE ACCORDINGLY UPHOLD THE SAME, REJECTING THE GROUND O F THE REVENUE ON THIS ASPECT. 7. GROUNDS NO.2 AND 3 OF THE REVENUE IN THIS APPEA L READ AS FOLLOWS- 2) THE CIT(A) IN TOTAL DISREGARD TO RULE 46A OF IT RULES, ADMITTED ADDITIONAL EVIDENCE IN THE SHAPE OF COPY O F VARIOUS DOCUMENTS, LIKE SALE AGREEMENTS ETC. WITHOU T AFFORDING AN OPPORTUNITY TO THE AO TO SUBMIT HIS COMMENTS ON THOSE DOCUMENTS. 3) THE CIT(A) HAS NOT OBSERVED THE DOCTRINE OF NATU RAL JUSTICE BY NOT PROVIDING AN OPPORTUNITY TO THE AO T O EXAMINE THE DOCUMENTS PRODUCED IN THE SHAPE OF ADDITIONAL EVIDENCE, ON WHICH THE ASSESSEE CLAIMS H IS RELIANCE. THESE DOCUMENTS WERE NOT MADE AVAILABLE T O THE AO DURING THE ASSESSMENT PROCEEDINGS. 8. WE HEARD BOTH SIDES AND PERUSED THE IMPUGNED OR DER OF THE CIT(A) IN THE LIGHT OF THE ABOVE GROUNDS OF THE REVENUE ALLEGING VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND RULE 46A OF THE ACT BY THE CIT(A). WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS INDEED RELIED ON CERTAIN AVERMENTS MADE DURING THE COURSE OF HEARING , AND WRITTEN SUBMISSIONS FILED BEFORE HIM, WITH REGARD TO THE CA SE FILED BY N.ANDALAMMA AND OTHERS BEFORE THE CHIEF JUDGED, CIV IL COURT IN SR NO.17560/2000 IN OP NO.518 OF 1997 AND THE COMMISSI ONER OF INCOME-TAX BASED HIS CONCLUSION ON THE AVERMENTS MA DE IN THIS PETITION, WITHOUT APPRECIATING THAT THE SAME HAVE N OT ATTAINED FINALITY, IT(SS)A NO.26 & 27/HYD/2007 M/S. SAI SREE PROJECTS, PVT. LTD., HYD 4 HAVING BEEN NOT ACCEPTED BY THE JUDICIAL AUTHORITY BEFORE WHICH THE SAME HAVE BEEN MADE. THIS ACTION OF THE CIT(A), IN THIS BEHALF, IN OUR OPINION, IS BAD IN LAW. FURTHER, THE ASSESSING OFFI CER HAS NO OCCASION TO GO THROUGH THESE AVERMENTS, AND OFFER HIS COMMENTS THEREON. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT WOULD BE IN THE INTERESTS OF JUSTICE TO SET ASIDE THE ORDER OF THE CIT(A) AND RE STORE THE ENTIRE ISSUE TO THE FILE OF THE ASSESSING OFFICER, TO RE-EXAMINE THE SAME AND REDECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER GIV ING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. GROUND NO.4 OF THE REVENUE READS AS FOLLOWS- THE CIT(A) ERRED IN NOT COFNIRMIGN THE COMPUTATION OF INCOME MADE BY THE ASSESSING OFFICER ON TEHE BASIS FO SEIZ ED MATERIAL. IN VIEW OF OUR DECISION ON GROUNDS NO.3 AND 4, SETT ING ASIDE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR RED ECIDING THE ISSUE AND REFRAMING THE ASSESSMENT IN ACCORDANCE WITH LAW, T HIS GROUND OF THE REVENUE NEEDS NO ADJUDICATION. THE SAME IS ACCORDI NGLY REJECTED. 10. THE LAST EFFECT GROUND OF THE REVENUE IN THIS APPEAL RELATES TO LEVY OF SURCHARGE, AND THE CONTENTION OF THE REV ENUE IS THAT THE CIT(A) ERRED IN NOT UPHOLDING THE LEVY OF SURCHARGE BY THE ASSESSING OFFICER, ON THE GROUND THAT THE AMENDMENT TO THE RE LEVANT PROVISION WOULD APPLY FOR ALL THE ASSESSMENTS COMPLETED AFTER 1.6.2002. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE DE CISION OF THE APEX COURT IN THE CASE OF CIT V/S. SURESH N.GUPTA (297 I TR 322), WHEREIN IT HAS BEEN HELD THAT AMENDMENT TO THE PROVISO TO S.11 3, THOUGH CAME INTO OPERATION WITH EFFECT FROM 1.6.2002, THE SAME BEING CLARIFICATORY IT(SS)A NO.26 & 27/HYD/2007 M/S. SAI SREE PROJECTS, PVT. LTD., HYD 5 IN NATURE, IS APPLICABLE EVEN IN RESPECT OF SEARCH ES CONDUCTED PRIOR TO 1.6.2002, AND AS SUCH THE ASSESSING OFFICER WAS JUS TIFIED IN LEVYING SURCHARGE. WE ACCORDINGLY, SET ASIDE THE ORDER OF T HE CIT(A) ON THIS ASPECT, ALLOWING THIS GROUND OF THE REVENUE. 12. IN THE RESULT, REVENUES APPEAL IT(SS)A NO.26 /HYD/2007 IS PARTLY ALLOWED. 13. NOW, LET US TAKE UP THE OTHER APPEAL OF THE RE VENUE, BEING IT(SS)A NO.27/HYD/2007, WHEREIN THE GRIEVANCE OF TH E REVENUE IS AGAINST CANCELLATION OF THE PENALTY LEVIED BY THE A SSESSING OFFICER UNDER S.158BFA OF THE ACT. 14. IN VIEW OF OUR DECISION ON GROUNDS NO.2 AND 3 OF THE REVENUE IN THE QUANTUM APPEAL HEREINABOVE, WHEREBY WE HAVE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORED THE MATT ER TO THE FILE OF THE ASSESSING OFFICER FOR REDECIDING THE ISSUE AND REFR AMING THE ASSESSMENT, THIS PENALTY APPEAL HAS BECOME INFRUCTU OUS, AND ON THAT GROUND IT IS LIABLE TO BE DISMISSED. WE DO SO, ACC ORDINGLY. WE HOWEVER, HASTEN TO ADD THAT WHILE REFRAMING THE ASS ESSMENT IN ACCORDANCE WITH LAW IN PURSUANCE OF OUR DIRECTIONS HEREINABOVE, THE ASSESSING OFFICER WOULD BE AT LIBERTY TO INITIATE F RESH PROCEEDINGS IN TERMS OF S.158BFA OF THE ACT, IF DEEMED FIT. 15. IN THE RESULT, IT(SS)A NO.27/HYD/2007 OF THE R EVENUE IS DISMISSED. 16. TO SUM UP, OUT OF THE TWO APPEALS OF THE REVEN UE, WHILE IT(SS)A NO.26/HYD/2007 IS PARTLY ALLOWED, IT(SS)A N O.27/HYD/2007 IS DISMISSED. IT(SS)A NO.26 & 27/HYD/2007 M/S. SAI SREE PROJECTS, PVT. LTD., HYD 6 ORDER PRONOUNCED IN THE COURT ON 10.2.2012 SD/- SD/- (ASHA VIJAYARAGHAVAN) (CHANDRA POOJARI) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- 10 TH FEBRUARY, 2012 COPY FORWARDED TO: 1. M/S. SAI SREE PROJECTS, PVT. LTD., FLAT NO.504, SEE THARAMAIAH TOWERS, MOTINAGAR, HYDERABAD 3. DY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1, H YDERABAD 4. COMMISSIONER OF INCOME - TAX(APPEALS) I HYDERABAD 5. COMMISSIONER OF INCOME - TAX, CENTRAL, HYDERABAD 6. DEPARTMENTAL REPRESENTATIVE , ITAT, HYDERABAD B.V.S.