Income Tax Appellate Tribunal - Hyderabad
T. Saritha, Hyd, Hyderabad vs Dcit, Central Circle-3, Hyd, Hyderabad on 29 June, 2021
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "B" : HYDERABAD
(THROUGH VIDEO CONFERENCE)
BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER
AND
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
ITA No. AY. Appellant Respondent
T.Nanda Kishore,
1093/Hyd/15 HYDERABAD
Dy.Commissioner
[PAN: AJLPT1429N]
of Income Tax,
2006-07 Central Circle-3,
Thunuguntla Sarita, HYDERABAD
1094/Hyd/15 HYDERABAD
[PAN: AJPPT9347M]
For Assessee : Shri S.Rama Rao, AR
For Revenue : Shri Narayana Murthy Naik, DR
Date of Hearing : 13-05-2021
Date of Pronouncement : 29-06-2021
ORDER
PER S.S.GODARA, J.M. :
These two assessees' appeals for AY.2006-07 arises against the CIT(A)-12, Hyderabad's order(s) dated 31-03-2015 passed in appeal Nos.0275 & 0096/CIT(A)-12/Hyd/2014-15 involving proceedings u/s.143(3) r.w.s.153C of the Income Tax Act, 1961 [in short, 'the Act'].
Heard both the parties. Case files perused.
2. It transpires at the outset that these assessees' instant appeals suffer from 73 days delay stated to be attributable to the reason(s) beyond their control as per condonation petition(s)/affidavit(s). No rebuttal has come from the departmental side. The impugned delay is condoned therefore.
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ITA Nos. 1093 & 1094/Hyd/2015
3. We come to former assessee's appeal ITA No.1093/Hyd/2015 seeking to reverse both the lower authorities' action initiating Section 153C proceedings followed by un-explained investment addition of Rs.16 lakhs made in the course of assessment dt.22-03-2013 as upheld in the CIT(A)'s order. This assessee has also filed petition seeking to raise an additional ground that the Assessing Officer had not recorded reasons before issuing Section 153C notice. The Revenue strongly objected to the above stated petition at this belated stage on the ground that the same tends to give altogether a new texture to the already raised issues. It fails to dispute that the assessee has challenged validity of the impugned assessment(s) proceedings before the CIT(A) as well in his ground No.1 in the tribunal. This additional ground is therefore found only as a supplementary one to that already pleaded in his Form-36 filed earlier. Hon'ble apex court's landmark decision in National Thermal Power Co. Ltd., Vs., CIT [229 ITR 383] (SC); as considered in tribunal's Special Bench's decision All Cargo Global Logistics Ltd., Vs. DCIT (2012) [137 ITD 217](SB) (Mumbai), holds that - we can very well entertain such a new ground going to root of the matter so as to determine correct tax liability of a taxpayer provided all relevant facts are already on record. We adopt the very reasoning and admit the assessee's foregoing additional ground.
4. We now come to the foregoing legal issue of validity of Section 153C proceedings. It is not in dispute from a perusal of the paper book dt.04-05-2016 that the Assessing Officer had first of all issued his notice dt.13-01-2012 u/s.153A of the :- 3 -:
ITA Nos. 1093 & 1094/Hyd/2015 Act (pg.7). It is further an admitted fact that the department had also conducted the search in assessee's case as well. And also that Assessing Officer had issued Section 153C notice on 13-01-2012 only. Meaning thereby that the crucial date herein i.e., 13-01-2012 witnessed the Assessing Officer's twin folded action initiating both the 153A as well as 153C proceedings culminating in the impugned assessment u/s.153C of the Act. We hold in this clinching factual backdrop that the impugned assessment suffers from a patent legal defect at the threshold itself since the Assessing Officer ought to have initiated the same u/s.153A in case of the searched assessee than a third party. We thus adopt stricter construction going by hon'ble apex court's full bench decision Commissioner of Customs Vs. Dilip Kumar (2018) 9 SCC 1 (SC) and quash the impugned assessment itself as 'invalid'. All other pleadings on merits are rendered infructuous. This former assessee's appeal ITA No.1093/Hyd/2015 succeeds in foregoing terms.
5. Next comes latter assessee Smt.T.Sarita's appeal ITA No.1094/Hyd/2015. Suffice to say, she has also filed her petition seeking admission of additional ground challenging validity of Section 153C notice. We reject Revenue's technical arguments going by our preceding reasoning in former assessee's appeal.
6. We stay back on the same question and come to Pg.9 of the assessee's paper book dt.04-05-2016 containing the Assessing Officer's Section 153C notice dt.14-02-2012 as follows:
:- 4 -:
ITA Nos. 1093 & 1094/Hyd/2015 PAN NO. Date:-14/01/2012.
To Smt. Thunuguntla Saritha, W/o Nanda Kishore, D.No:13-4-18, 3rd Line, Cunturivarithora, GUNTUR.
Asst.Year: 2006-07 Sir, Whereas a search was initiated under section 132 of the Income tax Act, 1961 / or books of accounts, other documents or any assets were requisitioned under section 132A on 16/09/2010 in your case.
And in pursuance of the provisions of section 153A(b) of the Income tax Act, 1961 it is required to assess or reassess your total income of six assessment years immediately preceding the assessment-year relevant to the previous year in which such search is conducted.
You are hereby required to furnish, within 30 days of receipt of this notice, the return of income in respect of assessment year 2006-
07 falling within six assessment years in the prescribed form and verified in the prescribed manner and setting forth. such other particulars as may apply accordingly as if such return were a return required to be furnished under section 139 of the Income tax Act, 1961".
7. Learned CIT-DR fails to dispute that the Assessing Officer herein has nowhere made it clear as to whether the alleged incriminating material found/seized during the course of search belonged to the assessee or not? We thus continue to adopt stricter interpretation (supra) and hold that the impugned Section 153C reasoning failed to record the due satisfaction as prescribed in the Act before proceeding against the assessee. The impugned assessment stand quashed therefore. All other pleadings on merits are rendered :- 5 -:
ITA Nos. 1093 & 1094/Hyd/2015 infructuous. This latter assessee's appeal ITA No.1094/Hyd/2015 is also accepted in foregoing terms.
8. To sum-up, these two assessees' appeals are allowed. A copy of this common order be placed in the respective case files.
Order pronounced in the open court on 29 th June, 2021 Sd/- Sd/-
(LAXMI PRASAD SAHU) (S.S.GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad,
Dated: 29-06-2021
TNMM
:- 6 -:
ITA Nos. 1093 & 1094/Hyd/2015
Copy to :
1.T.Nanda Kishore, C/o. Sri S.Rama Rao, Advocate, Flat No. 102, Shriya's Elegance, 3-6-643, Street No. 9, Himayat Nagar, Hyderabad.
2.Thunuguntla Sarita, C/o. Sri S.Rama Rao, Advocate, Flat No. 102, Shriya's Elegance, 3-6-643, Street No. 9, Himayat Nagar, Hyderabad.
3.Deputy Commissioner of Income Tax, Central Circle-3, Hyderabad.
4.CIT(Appeals)-12, Hyderabad.
5.Pr.CIT(Central)-Hyderabad.
6.D.R. ITAT, Hyderabad.
7.Guard File.