Shri K. Narasimha Reddy, Warangal v. CIT -VI, Hyderabad

ITA 4/HYD/2010 | 2001-2002
Pronouncement Date: 09-07-2010 | Result: Allowed

Appeal Details

RSA Number 422514 RSA 2010
Assessee PAN ADFPK0909A
Bench Hyderabad
Appeal Number ITA 4/HYD/2010
Duration Of Justice 6 month(s) 3 day(s)
Appellant Shri K. Narasimha Reddy, Warangal
Respondent CIT -VI, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 09-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 09-07-2010
Date Of Final Hearing 03-06-2010
Next Hearing Date 03-06-2010
Assessment Year 2001-2002
Appeal Filed On 05-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A' HYDERABAD BEFORE SHRI G.C.GUPTA VICE PRESIDENT AND SHRI CHANDRA POOJARI ACCOUNTANT MEMEBR ITA NO.4/HYD/2010 ASSTT. YEAR 2001-02 K. NARASIMHA REDDY HANAMKONDA (PAN NO. ADFPK 0909 A) V/S. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-I WARANGAL (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K.V.CHALAMAIAH RESPONDENT BY : SMT. VASUNDHARA SINHA DR O R D E R PER SHRI G.C. GUPTA VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2001-0 2 IS DIRECTED AGAINST THE ORDER OF THE CIT. 2. THERE IS A DELAY OF 212 DAYS IN FILING THE PRESENT APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE HAS FILED PETITION FOR CONDONATION OF DELAY AND HAS ALSO FILED AFFIDAVIT BY THE WIFE OF THE ASSESSEE EXPLAINING THE RE ASONS FOR THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS OPPOSED THE REASONS OF THE ASSESSEE FOR CONDONATION OF DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL. SHE SUBMITTED THAT NO REASONABLE CAUSE FOR THE INORDINATE D ELAY COULD BE ESTABLISHED BY THE ASSESSEE. ITA NO.4/HYD/2010 K NARASIMHA REDDY HYDERABAD. 2 3. WE HAVE CONSIDERED THE RIVAL SUBMISSION REGARDING THE I SSUE OF CONDONATION OF DELAY IN FILING THE PRESENT APPEAL BE FORE THE TRIBUNAL. WE HAVE PERUSED THE APPLICATION OF THE ASSESSEE FOR CONDO NATION OF DELAY SUPPORTED BY THE AFFIDAVIT OF WIFE OF THE ASSESSEE FILED BEFORE US. IN VIEW OF THE CIRCUMSTANCES NARRATED IN THE AFFIDAVIT F ILED BY THE WIFE OF THE ASSESSEE WE ARE OF THE VIEW THAT IT IS A FIT CASE FOR CONDONATION OF DELAY IN FILING THE PRESENT APPEAL BEFORE THE TRI BUNAL. ACCORDINGLY THE DELAY OF 212 DAYS IN FILING THE PRESENT APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL IS CONDONED. 4. THE GROUNDS OF THE APPEAL OF THE ASSESSEE ARE AS UNDER : '1. THE ORDER PASSED BY THE LEARNED CIT U/S 263 OF THE I T ACT 1961 DATED 23-03-2009 FOR ASSESSMENT YEAR 2001-02 IS ERRONEOUS IN LAW AND ON FACTS OF THE CAS E. 2. THE LEARNED CIT ERRED IN LAW WHILE PASSING THE IMPUGNED ORDER IN DEFIANCE TO THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT V ALAGENDRAN FINANCE LTD. (2007) 293 ITR 1 (SC) AND OTHER CASE LAW CITED BEFORE HIM. 3. WITHOUT PREJUDICE TO THE ABOVE GROUNDS THE LEAR NED CIT ERRED IN LAW AND ON FACTS WHILE SETTING ASIDE T HE ASSESSMENT AND DIRECTING THE ASSESSING OFFICER TO M AKE ADDITION OF RS.13 09 860 BEING COMMISSION PAID ON S UB CONTRACT RECEIPTS BY MISREADING THE RELEVANT SUB- CONTRACT AGREEMENT AND ALSO WITHOUT PROPER UNDERSTANDING OF LAW AND ACCOUNTING PRINCIPLES'. 5. THE LEARNED COUNSEL FOR THE ASSESSEE RAISED A PRELIM INARY OBJECTION AND SUBMITTED THAT THE ORIGINAL ASSESSMENT IN T HIS CASE WAS COMPLETED IN SCRUTINY ASSESSMENT U/S 143(3) ON 23-03-2004. THEREAFTER THE ASSESSMENT WAS REOPENED U/S 147 OF THE ACT AND REASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER ON 29-12-2 006. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ONLY ISSUE ON WHICH THE CIT HAS SET ASIDE THE ASSESSMENT TO THE FILE OF T HE ASSESSING ITA NO.4/HYD/2010 K NARASIMHA REDDY HYDERABAD. 3 OFFICER IN EXERCISE OF HIS POWERS CONFERRED U/S 263 WAS TO MAKE ADDITION OF RS.13 09 860/- BEING COMMISSION PAID ON SUB CONTRACT RECEIPTS. HE SUBMITTED THAT THIS ISSUE OF COMMISSION PAID O N SUB CONTRACTS WAS NOT SUBJECT MATTER OF REASSESSMENT PROCEEDINGS U/ S 147 OF THE ACT. IN THESE FACTS THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ORDER OF THE CIT PASSED U/S 263 IS BA RRED BY LIMITATION AS THE DATE OF ORDER OF THE CIT U/S 263 IS 23-03-2009. HE SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESS EE WITH THE DECISION OF THE HON'BLE APEX COURT IN CIT V ALAGENDRAN FINANCE LTD. (2007) 293 ITR 1 (SC). THE LEARNED DEPARTMENTAL RE PRESENTATIVE HAS OPPOSED THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. SHE RELIED ON THE ORDER OF THE CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND TH AT THE MATERIAL FACTS OF THE CASE ARE NOT IN DISPUTE. THE ORIGI NAL ASSESSMENT IN THIS CASE WAS FRAMED IN SCRUTINY ASSESSMENT U/S 143(3) ON 23-03- 2004. THEREAFTER THE REASSESSMENT PROCEEDINGS WERE STARTED U/S 147 OF THE ACT AND THE REASSESSMENT WAS FRAMED VIDE ORDER DA TED 29-12- 2006 BY THE ASSESSING OFFICER. THE IMPUGNED ORDER U/S 263 WAS PASSED BY THE CIT ON 23-03-2009. THE ONLY REASON FOR I NVOKING THE PROVISIONS OF SEC.263 BY THE CIT WAS THE AMOUNT OF RS.1 3 09 860/- BEING COMMISSION PAID ON SUB CONTRACT RECEIPTS. THIS ISSUE OF COMMISSION PAID ON SUB CONTRACT RECEIPTS WAS NOT A SUBJECT M ATTER OF REASSESSMENT PROCEEDING U/S 147 OF THE ACT AND ACCORDINGLY THE LIMITATION AS PROVIDED U/S 263 (2) OF THE ACT WOULD RU N FROM THE DATE OF ORIGINAL ASSESSMENT I.E. 23-3-2004. WE FIND THAT SINCE THE ISSUE OF ALLOWABILITY OF COMMISSION PAID ON SUB CONTRACT RECEIPTS W AS NOT A SUBJECT MATTER OF REASSESSMENT PROCEEDINGS THE SAME COULD N OT BE SAID TO HAVE EMERGED IN THE REASSESSMENT AND THEREFORE L IMITATION ITA NO.4/HYD/2010 K NARASIMHA REDDY HYDERABAD. 4 PERIOD OF 2 YEARS U/S 263(2) SHALL BE RECKONED FROM TH E DATE OF THE ORIGINAL ASSESSMENT. THIS ISSUE IS SQUARELY COVERED IN FAV OUR OF THE ASSESSEE WITH THE DECISION OF HON'BLE SUPREME COURT IN CIT V ALAGENDRAN FINANCE LTD. (2007) 293 ITR 1 (SC) WHERE IN HELD THAT IN RESPECT OF ISSUE WHICH WAS NOT SUBJECT MATTER OF REASSESSMENT LIMITATION U/S 263(2) WOULD RUN FROM THE DATE OF ORI GINAL ASSESSMENT AND THE REVISIONAL PROCEEDINGS INITIATED IN RESPECT OF SU CH ISSUE BEYOND THE PERIOD OF 2 YEARS FROM THE DATE OF ORIGINAL ASSESSME NT WERE BARRED BY LIMITATION. RESPECTFULLY FOLLOWING THE DECISION OF T HE HON'BLE SUPREME COURT WE HOLD THAT THE ACTION OF THE CIT U/S 263 WAS BARRED BY LIMITATION AND THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 09-07-2010. SD/- SD/- (CHANDRA POOJARI) (G.C. GUPTA) ACCOUNTANT MEMBER VICE-PRESIDENT PVV/SPS DATE:09TH JULY 2010. COPY FORWARDED TO: 1. SHRI K. NARASIMHA REDDY H.NO.2-10-855 TEACHERS C OLONY HANAMKONDA WARNAGAL 2. THE ASSTT. COMMISSIONER OF INCOME TAX CIRCLE-I WARA NGAL 3. THE COMMISSIONER OF INCOME TAX VI HYDERABAD 4 THE DEPARTMENTAL REPRESENTATIVE ITAT HYDERABAD.