Income Tax Appellate Tribunal - Hyderabad
Saisree Projects P. Ltd., Hyderabad vs Department Of Income Tax on 13 December, 2006
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH 'B', HYDERABAD
BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER.
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- V/s M/s. Sai Sree Projects, Pvt. Ltd.,
tax, Central Circle 1, Hyderabad 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
ORDER
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.158BFA of the Act- are directed against the orders of the CIT(A) I, Hyderabad, both dated 13.12.2006.
2. Let us first take up for consideration the quantum 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 condoning the delay in the filing of the first appeal by the assessee, before him.
4. Learned Departmental Representative submitted that the first appeal was field as late as 21 months and the assessee was 2 IT(SS)A No.26 & 27/Hyd/2007 M/s. Sai Sree Projects, Pvt. Ltd., Hyd reluctant even to file the return of income in response to notice issued under S.158BD of the Act, and the assessee also did not respond to various notices issued by the lower authorities during the income tax proceedings. It is also pleaded that the assessee was habitual in showing disrespect and disregard to income-tax proceedings 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 appeal before the CIT(A) as genuine. In the circumstances, therefore, according to the Learned Departmental Representative, there was no justification for the CIT(A) to condone the inordinate delay in the filing of the appeal by the assessee before him.
5. The learned counsel for the assessee, on the other hand, strongly supported the order of the CIT(A) and submitted 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 perused 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 account of the CIT(A) condoning the delay in the filing of the first appeal before him. It is evident from the order of the CIT(A), more particularly para 4.1 thereof, that the assessee was held up, mostly in Delhi, due to prosecution cases lodged by CBI, and during the relevant point of time, assessee was required to attend the day to day 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 3 IT(SS)A No.26 & 27/Hyd/2007 M/s. Sai Sree Projects, Pvt. Ltd., Hyd noted that when copy of the affidavit and written submsisiosn 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 soon 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 of the Revenue on this aspect.
7. Grounds No.2 and 3 of the Revenue in this appeal read as follows-
"2) The CIT(A) in total disregard to Rule 46A of IT Rules, admitted additional evidence in the shape of copy of various documents, like sale agreements etc. without affording an opportunity to the AO to submit his comments on those documents.
3) The CIT(A) has not observed the doctrine of natural justice by not providing an opportunity to the AO to examine the documents produced in the shape of additional evidence, on which the assessee claims his reliance. These documents were not made available to the AO during the assessment proceedings."
8. We heard both sides and perused the impugned order 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 case filed by N.Andalamma and Others before the Chief Judged, Civil Court in SR No.17560/2000 in OP No.518 of 1997 and the Commissioner of Income-tax based his conclusion on the averments made in this petition, without appreciating that the same have not attained finality, 4 IT(SS)A No.26 & 27/Hyd/2007 M/s. Sai Sree Projects, Pvt. Ltd., Hyd 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 officer 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 restore the entire issue to the file of the assessing officer, to re-examine the same and redecide the issue in accordance with law after giving 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 seized material."
In view of our decision on grounds No.3 and 4, setting aside the matter to the file of the assessing officer for redeciding the issue and reframing the assessment in accordance with law, this ground of the Revenue needs no adjudication. The same is accordingly rejected.
10. The last effect ground of the Revenue in this appeal relates to levy of surcharge, and the contention of the Revenue 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 relevant provision would apply for all the assessments completed after 1.6.2002.
11. We have considered the rival submissions. We find that issue is covered in favour of the Revenue by the decision of the Apex Court in the case of CIT V/s. Suresh N.Gupta (297 ITR 322), wherein it has been held that amendment to the proviso to S.113, though came into operation with effect from 1.6.2002, the same being clarificatory 5 IT(SS)A No.26 & 27/Hyd/2007 M/s. Sai Sree Projects, Pvt. Ltd., Hyd in nature, is applicable even in respect of searches conducted prior to 1.6.2002, and as such the assessing officer was justified in levying surcharge. We accordingly, set aside the order of the CIT(A) on this aspect, allowing this ground of the Revenue.
12. In the result, Revenue's appeal IT(SS)A No.26/Hyd/2007 is partly allowed.
13. Now, let us take up the other appeal of the Revenue, being IT(SS)A No.27/Hyd/2007, wherein the grievance of the Revenue is against cancellation of the penalty levied by the assessing 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 matter to the file of the assessing officer for redeciding the issue and reframing the assessment, this penalty appeal has become infructuous, and on that ground it is liable to be dismissed. We do so, accordingly. We however, hasten to add that while reframing the assessment in accordance with law in pursuance of our directions hereinabove, the assessing officer would be at liberty to initiate fresh 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 Revenue is dismissed.
16. To sum up, out of the two appeals of the Revenue, while IT(SS)A No.26/Hyd/2007 is partly allowed, IT(SS)A No.27/Hyd/2007 is dismissed.
6 IT(SS)A No.26 & 27/Hyd/2007
M/s. Sai Sree Projects, Pvt. Ltd., Hyd
Order pronounced in the court on 10.2.2012
Sd/- Sd/-
(Asha Vijayaraghavan) (Chandra Poojari)
Judicial Member. Accountant Member.
Dt/- 10th February, 2012
Copy forwarded to:
1. M/s. Sai Sree Projects, Pvt. Ltd., Flat No.504, Seetharamaiah Towers, Motinagar, Hyderabad
3. Dy Commissioner of Income-tax Central Circle-1, Hyderabad
4. Commissioner of Income-tax(Appeals) I Hyderabad
5. Commissioner of Income-tax, Central, Hyderabad
6. Departmental Representative , ITAT, Hyderabad B.V.S.