MADHUSUDAN REDDY PASHAM,HYDERABAD V. ACIT., CIRCLE-9(1), HYDERABAD

SA 7/HYD/2025

AI Insights

The case involves Madhusudan Reddy Pasham, the appellant, who filed stay applications against the recovery of an outstanding demand for the assessment years 2006-07 to 2008-09. This demand arose from an order by the Assessing Officer, which was initially remanded by the Tribunal for re-assessment based on directions to consider only incriminating material found during a search and seizure operation. The Assessing Officer, however, repeated the additions and incorrectly calculated the interest liability, significantly increasing the demand. The Tribunal had previously remanded the matter for fresh adjudication, but the Assessing Officer's subsequent actions led to the filing of these stay applications. The Tribunal decided to expedite the hearing of the appeals rather than grant a stay on the recovery of the demand, citing the complexity of the factual issues and the need for a thorough examination of the relevant facts.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 27313 (ITAT-HYDERABAD)
• Appeal Type: Stay Application
• Pronouncement Date: 21-03-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2006-2007
• Other Referred Cases: ITA Nos.1070 to 1075/Hyd/2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Search and seizure; Application of stay
• Section: 143(3); 153A; 234B; 9(1); 9(1); 9(1)

Judgement Text

" SA Nos 7 to 9 of 2025 Madhusudan Reddy Pasham Page 1 of 5 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member S.A. Nos. 7 to 9/Hyd/2025 (आ.अपी.सं /ITA Nos.427 to 429/Hyd/2025) (िनधाŊरण वषŊ/Assessment Years: 2006-07 to 2008-09) Shri Madhusudan Reddy Pasham, HYDERABAD PAN:AEWPP0306E Vs. Asstt. Commissioner of Income Tax, Circle 9(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri P Murali Mohan Rao, CA राज̾ व Ȫारा/Revenue by:: Shri Srinath Sadanala, DR सुनवाई की तारीख/Date of hearing: 21/03/2025 घोषणा की तारीख/Pronouncement: 21/03/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President By way of these stay applications, the assessee is seeking stay against the recovery of outstanding demand arising from the order passed by the Assessing Officer, in pursuant to the earlier order of this Tribunal remanding the matter to the record of the Assessing Officer for the A.Ys 2006-07 to 2008-09 respectively. SA Nos 7 to 9 of 2025 Madhusudan Reddy Pasham Page 2 of 5 2. The learned AR of the assessee has submitted that this Tribunal, in the first round of appeal, vide order dated 21/04/2017 in the cross appeals filed by the parties, vide ITA Nos.1070 to 1075/Hyd/2012 remanded the matter to the record of the Assessing Officer for fresh adjudication. However, the Assessing Officer has repeated the addition which is in contravention of the directions of the Tribunal. The learned AR has further submitted that, the Assessing Officer, even determined the tax liability with wrong calculation of computation of interest liability u/s 234A to B of the I.T. Act, 1961. He has pointed out that at the time of original assessment, the total interest was computed by the Assessing Officer at Rs.1,69,03,837/- whereas while passing the impugned order in pursuant to the directions of this Tribunal, the Assessing Officer has computed the interest at Rs.4.80 crores. Thus, the learned AR has submitted that the Assessing Officer has enhanced the interest payable by Rs.2,40,00,000/- and raised the total demand for all the 3 years at Rs.15.13 crores. The assessee has already filed the petition u/s 154, however, the same has not been decided till date by the Assessing Officer. He has further pointed out that the assessee has already paid a total of Rs.2.65 crores which is more than 20% of the total demand, if properly calculated without any mistake. Thus, the learned AR has pleaded that, the recovery against the demand be stayed. Alternatively, the learned AR has submitted that the appeals of the assessee are fixed for hearing on 11/06/2025 which may be preponed to the SA Nos 7 to 9 of 2025 Madhusudan Reddy Pasham Page 3 of 5 earlier date in the month of April, 2025 itself and appropriate order may be passed for staying the recovery of the demand. 4. On the other hand, the learned DR has submitted that the Assessing Officer has passed the impugned order strictly in accordance with the directions of the Tribunal. These 3 years were abated years post search and seizure action on 9/10/2017 and therefore, the assessments which were pending at the time of search & seizure action got abated and therefore, there was no restriction for the Assessing Officer to confine the addition only on the basis of the seized material. He has further submitted that the interest u/s 234B has to be calculated on the date of determination of total income and therefore, the Assessing Officer has rightly calculated the interest while passing the orders in pursuant to the directions of this Tribunal. He has opposed to the stay of recovery of the demand. 5. We have considered the rival submission as well as relevant material available on record. Earlier, the Assessing Officer passed the orders u/s 143(3) r.w.s. 153A of the I.T. Act, 1961 for the A.Ys 2002-03 to 2008-09. On further appeal, the learned CIT (A) granted relief to the assessee and the Revenue filed the appeals before this Tribunal in ITA Nos. 1070 to 1075/Hyd/2012. The assessee also filed cross appeals for the A.Ys 2006-07 to 2008-09 in ITA Nos. 1373 to 1375/Hyd/2012. The Tribunal vide order dated 21/04/2017 remanded the cross SA Nos 7 to 9 of 2025 Madhusudan Reddy Pasham Page 4 of 5 appeals to the record of the Assessing Officer to compute the income on the basis of incriminating material found and also directed to quantify the income, either on the basis of the seized material or if entire seized material is considered in receipt & payment statement furnished by the assessee, on the basis of such statement. In the assessment order framed for these 3 A.Ys, the Assessing Officer has repeated the additions which has resulted this 2nd round of appeals. Since the issue involved in the appeals of the assessee are complex factual issues requires proper examination of the relevant facts and record, therefore, at this stage of deciding the stay applications, it is not possible to express any view on the merits of the issue involved in these appeals. However, in the facts and circumstances of the case, as this is the 2nd round of litigation and in the interest of justice, we accept the request of the learned AR for early hearing of the appeals and therefore, the appeals of the assessee are directed to be preponed for hearing on 16/04/2025, as out of turn hearing. The Assessing Officer is directed not to take any coercive action for recovery of the outstanding demand till the next date of hearing as the assessee has already paid a sum of Rs.2,65,00,000/-. The next date of hearing of the appeals of the assessee is pronounced in the Open Court and noted by the parties, therefore, no separate notice shall be served. The parties are directed not to take any adjournment of hearing of the appeals. The paper book, if any, has to be filed well in advance with an advance copy to the other party. SA Nos 7 to 9 of 2025 Madhusudan Reddy Pasham Page 5 of 5 5. In the result, Stay Applications is rejected and early hearing is granted. Order pronounced in the Open Court at the time of hearing itself, i.e. on 21st March, 2025. Sd/- Sd/- (MADHUSUDAN SAWDIA) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 21st March, 2025 Vinodan/sps Copy to: S.No Addresses 1 Shri Madhusudan Reddy Pasham c/o P Murali & Co. CAs, 6-3- 655/2/3 Somajiguda, Hyderabad 500082 2 ACIT, Circle 9(1) 2nd Floor, D Block, IT Towers, AC Guards, Hyderabad 3 Pr. CIT – Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "