Income Tax Officer, Ward-1, , Narasaraopet V. Sai Bhagya Lakshmi Estates, Narasaraopet

MA 13/VIZ/2023

• Counselvise Citation: [2023] 100 COUNSELVISE.COM (IT) 5548 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 8 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-11-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-10-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 12-03-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order
• Section: 263

Judgement Text

आयकरअपीलीयअधिकरण, धिशाखापटणम पीठ, धिशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री द ु व्वूरु आर एल रेड्डी, न्याधयक सदस्य एिं श्री एस बालाकृ ष्णन, लेखा सदस्य के समक्ष BEFORE SHRI DUVVURU RL REDDY, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER M.A.No.13/Viz/2023 (Arising out of I.T.A.No. 135/Viz/2019) (ननधधारण वर्ा / Assessment Year : 2012-13) Income Tax Officer Ward-1 Narsaraopet Vs. M/s Sai Bhagya Lakshmi Estates Mg.Partner:Smt.Gunda Anantha Kumari D.No.5-9-11, Rajakawada Narsaraopet, Palnadu Dist [PAN : ACAFS9780P] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) M.A.No.14/Viz/2023 (Arising out of I.T.A.No.110/Viz/2019) (ननधधारण वर्ा / Assessment Year : 2014-15) Income Tax Officer Ward-1 Narsaraopet Vs. Sri Challemcherla Hanumantha Rao D.No.5-7-10/A, Rajakawada Narsaraopet Palnadu Dist [PAN : ALNPC4446L] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent) अपीलधथी की ओर से/ Appellant by : Shri I.Kama Sastry, AR प्रत्यधथी की ओर से / Respondent by : Shri Madhukar Aves, DR सुनवधई की तधरीख / Date of Hearing : 13.10.2023 घोर्णध की तधरीख/Date of Pronouncement : 22.11.2023 2 M.A. No.13/Viz/2023 & 14/Viz/2023, A.Y.2012-13 & 2014-15 Sai Bhagya Lakshmi Estates & Challemcharla Hanumantha Rao., Palnadu Dist. आदेश /O R D E R Per Shri Duvvuru RL Reddy, Judicial Member : These Miscellaneous Applications are filed by the revenue against the common order of the Tribunal in I.T.A.No.135/Viz/2019 & 110/Viz/2019 dated 19.10.2022. For the sake of convenience, these applications are clubbed, heard together and a common order is being passed for the sake of convenience as under. 2. In the instant case, the assessee filed appeals against the orders of the Ld.Principal Commissioner of Income Tax (in short “PCIT”), Guntur dated 08.02.2019 for the A.Y.2012-13 and 2014-15. The Tribunal disposed the appeals in favour of the assessee and held that “...the Commissioner may call for and examine the record of any proceeding under this act, and if he considers that any order passed therein by the Assessing Officer is erroneous, in so far as it is prejudicial to the interest of the Revenue. In the instant case, the Commissioner reopened the case u/s 263 of the Act based on the proposal sent by the AO and not on his own volition. We are therefore, of the considered view that reopening is bad in law and hence, we quash the order of the Ld.Pr.CIT and allow the appeal of the assessee.” 3 M.A. No.13/Viz/2023 & 14/Viz/2023, A.Y.2012-13 & 2014-15 Sai Bhagya Lakshmi Estates & Challemcharla Hanumantha Rao., Palnadu Dist. 3. Appearing for the revenue, the Ld.DR contended that the observation of the Hon’ble ITAT is not correct. The order passed u/s 263 by the PCIT is not merely based on the proposal sent by the AO. The proposal submitted by the AO is not final. After examination of the record and satisfaction of the PCIT only, provisions of sec.263 of the Act were invoked. He, therefore, pleaded to consider the grounds of appeal in the assessee’s case and adjudicate the issues on merits. 4. On the other hand, the Ld.AR submitted that the decision which was taken by the ITAT, Visakhapatnam in the case of the assessee was followed by the coordinate bench of the Tribunal in the case of Manepalli Ranadheer Vs. ITO vide I.T.A. No.256/Viz/2020 to 261/Viz/2020 and Late M.Pushpalatha Vs. ITO vide I.T.A.No.19/Viz/2021 to 21/Viz/2021 dated 23.05.2023, relying on the decision of the Hon’ble High Court of Calcutta in the case of Principal Commissioner of Income Tax Vs. Reeta Lakhmani [2022] 145 taxmann.com 590 (Calcutta). He, therefore submitted that there is no mistake apparent from the record and the Hon’ble ITAT has categorically discussed the issue and disposed off the appeal and subsequently Hon’ble High Court of Calcutta also has taken the same view in the case of Principal Commissioner of Income Tax Vs. Reeta Lakhmani (supra). For the sake of clarity and convenience, we 4 M.A. No.13/Viz/2023 & 14/Viz/2023, A.Y.2012-13 & 2014-15 Sai Bhagya Lakshmi Estates & Challemcharla Hanumantha Rao., Palnadu Dist. extract relevant part of the order of the Tribunal in the case of Manepalli Ranadheer Vs. ITO (supra) as under : “Hon’ble High Court of Calcutta in the case of Principal Commissioner of Income Tax Vs. Reeta Lakhmani [2022] 145 taxmann.com 590 (Calcutta) held that PCIT, in order to exercise jurisdiction under section 263 of the Act, exercised jurisdiction at the instance of the assessing officer is against the provisions of the law. For the sake of clarity and convenience, relevant part of the order of the Hon’ble High Court is extracted as under: “8. This aspect was considered by the learned Tribunal and after going through the facts of the case it was found that the initiation of the proceedings under section 263 of the Act was based on a proposal given by the assessing officer and not at the behest of the PCIT. It may be true that the PCIT may have information from the assessment file or through other sources. Nevertheless while exercising powers under section 263 of the Act, the PCIT has to bear in mind the twin conditions are to be conjointly fulfilled. Therefore, before exercising of power under section 263, it is the PCIT who has to apply its mind to the issue and thereafter record reasons as to how the twin conditions are satisfied and then issue a show-cause notice to the assessee. In the cases on hand there is nothing on record to show that such an exercise was done by the PCIT. Therefore, learned Tribunal after noting several decisions on the subject rendered by the Coordinate Benches of the Tribunal had allowed the assessee’s appeal and set aside the order passed by the PCIT under section 263 of the Act. Thereafter, the learned Tribunal has proceeded to examine the merits of the matter and granted relief. It is the submission of Mr. Mitra that so far as the merit of the cases are concerned, similar issue was tested by this Court in the case of Pr.CIT Vs. Swati Bajaj (2022) 139 taxmann.com 352/288 Taxman 403/446 ITR 56. Though such may be the issue, as pointed out earlier, the learned Tribunal had granted relief to the assessee on two grounds, the first of which being that the exercise of power under section 263 of the Act was not in accordance with law. As could be seen from the substantial questions f law suggested by the revenue, the revenue has not raised any question on the said finding of the Tribunal which goes to show that the revenue had reconciled with the reasoning given by the learned Tribunal in that record. Therefore, a piecemeal challenge to the order passed by the learned Tribunal 5 M.A. No.13/Viz/2023 & 14/Viz/2023, A.Y.2012-13 & 2014-15 Sai Bhagya Lakshmi Estates & Challemcharla Hanumantha Rao., Palnadu Dist. on one of the grounds on which relief was granted to the assessee is not maintainable.” Respectfully, following the order of the coordinate bench of the Tribunal in the case of M/s Sai Bhagya Lakshmi Estates, Sri Challamcherla Hanumantha Rao Vs. ITO, Ward-2, Narasaraopet (supra) and the decision of the Hon’ble High Court of Calcutta, we are inclined to quash the order passed by the PCIT u/s 263 and allow the appeal of the assessee.” Therefore, in view of the decision of the Hon’ble High Court of Calcutta and the decision of the coordinate bench of the Tribunal in the case of Manepalli Ranadheer Vs. ITO (supra) we do not find any mistake apparent from the record. Therefore, the Miscellaneous Applications filed by the revenue are liable to be dismissed. 5. In the result, miscellaneous applications filed by the revenue are dismissed. Order pronounced in the open court on 22 nd November, 2023. Sd/- Sd/- (एस बालाकृ ष्णन) (द ु व्वूरु आर.एल रेड्डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सदस्य/ACCOUNTANT MEMBER न्याधयक सदस्य/JUDICIAL MEMBER Dated : 22.11.2023 L.Rama, SPS 6 M.A. No.13/Viz/2023 & 14/Viz/2023, A.Y.2012-13 & 2014-15 Sai Bhagya Lakshmi Estates & Challemcharla Hanumantha Rao., Palnadu Dist. आदेश की प्रतितिति अग्रेतिि/Copy of the order forwarded to:- 1. ननधधाऩरती/ The Assessee– M/s Sai Bhagya Lakshmi Estates, Mg.Partner:Smt.Gunda Anantha Kumari, D.No.5-9-11, Rajakawada, Narsaraopet, Palnadu Dist (ii) Sri Challemcherla Hanumantha Rao, D.No.5-7-10/A, Rajakawada Narsaraopet, Palnadu Dist 2. रधजस्व/The Revenue – The Income Tax Officer, Ward-1, Narsaraopet 3. The Principal Commissioner of Income Tax, Guntur 4. नवभधगीय प्रनतनननध, आयकर अपीलीय अनधकरण, नवशधखधपटणम / DR,ITAT, Visakhapatnam 5..गधर्ा फ़धईल / Guard file आदेशधनुसधर / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam