Kolli Subramanyam,, Hyderabad v. THE ITO,, Vijayawada

ITA 553/VIZ/2014 | 2008-2009
Pronouncement Date: 30-09-2016 | Result: Allowed

Appeal Details

RSA Number 55325314 RSA 2014
Assessee PAN AJWPK6488R
Bench Visakhapatnam
Appeal Number ITA 553/VIZ/2014
Duration Of Justice 1 year(s) 11 month(s) 9 day(s)
Appellant Kolli Subramanyam,, Hyderabad
Respondent THE ITO,, Vijayawada
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 30-09-2016
Assessment Year 2008-2009
Appeal Filed On 21-10-2014
Judgment Text
ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH VISAKHAPATNAM . . $ BEFORE SHRI V. DURGA RAO JUDICIAL MEMBER & SHRI G. MANJUNATHA ACCOUNTANT MEMBER ./I.T.A.NO.702/VIZAG/2013 ( / ASSESSMENT YEAR: 2007-08) ./I.T.A.NOS.552&553/VIZAG/2014 ( / ASSESSMENT YEAR: 2007-08 & 2008-09) KOLLI SUBRA MANYAM VIJAYAWADA VS. ITO WARD - 2(2) VIJAYAWADA [PAN: AJWPK6488R ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI S. RAMA RAO AR / RESPONDENT BY : SHRI T.S.N. MURTHY DR / DATE OF HEARING : 27. 0 9.2016 / DATE OF PRONOUNCEMENT : / O R D E R PER G. MANJUNATHA ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST ORDER OF THE CIT VIJAYAWADA U/S 263 OF THE INCOME TAX ACT 1961 (HEREINAFTER CALLED AS THE ACT) AND THE CIT(A) VIJAYAWADA U/S 250 OF THE ACT FOR ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 2 THE ASSESSMENT YEARS 2007-08 & 2008-09. SINCE THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON THEY ARE HEARD TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA N O.702/VIZAG/2013 ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF EXECUTION OF CIVIL WORK CONTRACTS FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 8.11.2007 DECLARING TOTA L INCOME OF RS.3 92 960/-. SUBSEQUENTLY THE CASE WAS CONVERTE D INTO SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 2.12.2009 DETERMINING THE TOTAL INCOME AT RS.18 00 210/- BY E STIMATING INCOME AT 5% ON GROSS CONTRACT RECEIPTS. 3. THE CIT VIJAYAWADA ISSUED A SHOW CAUSE NOTICE D ATED 18.5.2010 AND ASKED TO EXPLAIN WHY THE ASSESSMENT ORDER PASSE D BY THE A.O. U/S 143(3) OF THE ACT DATED 2.12.2009 SHALL NOT BE REV ISED UNDER THE PROVISIONS OF SECTION 263 OF THE ACT. THE CIT PRO POSED TO REVISE THE ASSESSMENT ORDER FOR THE REASON THAT ON VERIFICATIO N OF ASSESSMENT RECORDS IT IS FOUND THAT THE ORDER PASSED BY THE A .O. U/S 143(3) OF THE ACT APPEARS TO BE ERRONEOUS IN SO FAR AS IT IS PRE JUDICIAL TO THE INTEREST OF THE REVENUE IN TERMS OF SECTION 263 OF THE ACT. THE CIT IN THE SAID SHOW CAUSE NOTICE OBSERVED THAT THE A.O. HAS NOT V ERIFIED THE INCREASE ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 3 IN CAPITAL ACCOUNT OF THE ASSESSEE ADDITIONS MADE TO FIXED ASSETS APPLICABILITY OF TDS PROVISIONS AND CONSEQUENT DISA LLOWANCE U/S 40(A)(IA) OF THE ACT TOWARDS FINANCIAL CHARGES GEN UINENESS OF TRADE CREDITORS SHOWN IN THE BALANCE SHEET AND ALSO CORRE CTNESS OF NET PROFIT ADMITTED BY THE ASSESSEE. THE CIT FURTHER OBSERV ED THAT THE A.O. HAS COMPLETED ASSESSMENT BY REJECTION OF BOOKS OF ACCOU NTS AND ESTIMATION OF NET PROFIT OF 5% ON GROSS CONTRACT RECEIPTS WITH OUT EXAMINING THE ABOVE ISSUES WHICH RENDERED THE ASSESSMENT ORDER E RRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE . THEREFORE ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE ASSE SSMENT ORDER PASSED U/S 143(3) OF THE ACT SHALL NOT BE REVISED UNDER THE PROVISIONS OF SECTION 263 OF THE ACT. 4. IN RESPONSE TO SHOW CAUSE NOTICE THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED ON BEHALF OF THE ASSESSEE ON 28.6.2010 AND REQUESTED FOR ADJOURNMENT UP TO 12.7.2010. SUBSEQU ENTLY SEVERAL NOTICES HAVE BEEN ISSUED ON VARIOUS DATES I.E. 15.1 0.2010 12.11.2010 4.8.2011 24.8.2011 AND FINALLY ON 10.10.2011. THO UGH ADEQUATE OPPORTUNITIES WERE GIVEN TO THE ASSESSEE TO FURNISH THE EXPLANATIONS ON THE ISSUES MENTIONED IN THE SHOW CAUSE NOTICE NO E XPLANATION HAS BEEN FURNISHED. SINCE THE ASSESSEE FAILED TO COMPLY WI TH THE SHOW CAUSE ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 4 NOTICES THE CIT COMPLETED THE PROCEEDINGS U/S 263 OF THE ACT BASED ON THE MATERIALS AVAILABLE ON RECORD. 5. IN THE PROCEEDINGS BEFORE THE COMMISSIONER THE CIT OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION THE CAPIT AL ACCOUNT BALANCE OF THE ASSESSEE HAS SUDDENLY RAISED TO RS.38 66 917/- FOR WHICH THE ASSESSEE PRODUCED A WILL DATED 24.7.2001 EXECUTED B Y SMT. K. RAMAKOTESWARAMMA W/O LATE K. RAGAVAIAH IN WHICH CE RTAIN IMMOVABLE PROPERTIES HAVE BEEN GIFTED. THE ASSESSEE NEITHER PRODUCED DETAILS OF CAPITAL ACCOUNT NOR EXPLAINED HOW CAPITAL WAS SUDDE NLY RAISED FROM THE PREVIOUS YEAR. THE CIT FURTHER OBSERVED THAT THE A.O. HAS ESTIMATED NET PROFIT OF 5% ON CONTRACT RECEIPTS HOWEVER CON SIDERING THE FACTS OF THE CASE THE A.O. OUGHT TO HAVE ESTIMATED NET PROF IT OF 8% INSTEAD OF 5%. THE CIT FURTHER OBSERVED THAT THE ASSESSEE H AS SHOWN FIXED ASSETS OF RS.76 75 704/- BUT NO DETAILS WERE AVAIL ABLE ON RECORD IN THE ABSENCE OF THE DETAILS OF THE FIXED RECEIPTS THE C ORRECTNESS OF THE CLAIM OF DEPRECIATION COULD NOT BE VERIFIED. SIMILARLY THE CIT OBSERVED THAT THE ASSESSEE HAD CLAIMED FINANCIAL CHARGES OF RS.5 11 133/- BUT NO DETAILS WERE AVAILABLE ON RECORD TO ASCERTAIN WHETH ER THE ASSESSEE IS LIABLE FOR TDS ON THIS PAYMENT AND APPLICABILITY OF PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. IT WAS FURTHER OBSERVED THAT THE A.O. DID NOT ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 5 OBTAIN ANY CONFIRMATIONS FOR SUNDRY CREDITORS SHOWN IN THE BALANCE SHEET WHILE COMPLETING THE ASSESSMENT. IT IS EVIDENT FRO M THE RECORD THAT NO QUERY AT ALL WAS RAISED NOR ANY CLARIFICATION WAS SOUGHT ON THESE ISSUES DURING THE ASSESSMENT PROCEEDINGS. THE RECORD DOES NOT INDICATE THAT THE A.O. HAD APPLIED HIS MIND TO FACTS AND MATERIAL S ON RECORD THROUGH A PROCESS OF ENQUIRY AND INVESTIGATION AND FORMED A V IEW ON THE ISSUES BEFORE REJECTION OF BOOKS OF ACCOUNTS AND ESTIMATIO N OF NET PROFIT OF 5% ON GROSS TURNOVER. THUS THE ASSESSMENT ORDER PASS ED BY THE A.O. WITHOUT MAKING ANY ENQUIRIES IS CONSIDERED TO BE ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. WITH TH ESE OBSERVATIONS REVISED THE ASSESSMENT ORDER PASSED U/S 143(3) OF T HE ACT DATED 2.12.2009 AND DIRECTED THE A.O. TO RE-DO THE ASSESS MENT AFTER CAREFULLY EXAMINING ALL THE DETAILS AND AFTER GIVING THE ASSE SSEE A REASONABLE OPPORTUNITY OF BEING HEARD. AGGRIEVED BY THE CIT O RDER THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT ERRED IN HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE A.O . U/S 143(3) OF THE ACT DATED 2.12.2009 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE A.R. FURTHER SUBMITTE D THAT THE CIT OUGHT TO HAVE OBSERVED THAT THE ASSESSING OFFICER REJECTE D BOOKS OF ACCOUNTS ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 6 AND ESTIMATED NET PROFIT AT 5% ON THE GROSS CONTRAC T RECEIPTS AND THEREFORE NO FURTHER ADDITIONS/DISALLOWANCES CAN B E MADE WHEN THE BOOKS OF ACCOUNTS ARE REJECTED. THE A.R. FURTHER S UBMITTED THAT WHEN THE BOOKS OF ACCOUNTS ARE REJECTED UNDER THE PROVIS IONS OF SECTION 145(3) OF THE ACT NO NEED TO GO INTO THE SAME BOOK S OF ACCOUNTS TO LOOK INTO OTHER ISSUES. THE A.O. LEFT WITH TWO OPT IONS TO COMPUTE THE TRUE AND CORRECT INCOME OF THE ASSESSEE I.E. (1) B ASED ON BOOKS OF ACCOUNTS REGULARLY MAINTAINED BY THE ASSESSEE (2) R EJECTION OF SUCH BOOKS OF ACCOUNTS AND ESTIMATION OF INCOME AT BEST JUDGEMENT. THE A.O. CONSIDERING THE FACTS AND CIRCUMSTANCES OF TH E CASE HAS CHOSEN ONE OF THE METHOD WHICH THE CIT CANNOT FIND FAULT WITH THE A.O. THAT THE A.O. HAS ADOPTED INCORRECT METHOD. THE A.R. FU RTHER SUBMITTED THAT AS REGARDS OTHER ISSUES POINTED OUT BY THE CIT THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS REJECTED BOOKS OF ACCOUNTS AND RESORTED TO ESTIMATION OF NET PROFIT. SINCE BOOKS OF ACCOUNTS ARE REJECTED THE A.O. DID NOT GONE INTO ANY OF THE ISS UES THEREFORE THE CIT WAS TOTALLY INCORRECT IN HOLDING THAT THE ASSESSMEN T ORDER PASSED BY THE A.O. IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 7 7. ON THE OTHER HAND THE LD. D.R. SUBMITTED THAT T HE CIT RECORDED CATEGORICAL FINDING THAT THE A.O. HAS FAILED TO EXA MINE ALL THE ISSUES POINTED OUT BY THE CIT IN HIS SHOW CAUSE NOTICE. T HE A.O. HAS SUMMARILY REJECTED BOOKS OF ACCOUNTS AND ESTIMATED NET PROFIT OF 5% ON GROSS CONTRACT RECEIPTS WITHOUT ANY COMPARABLE CASE S IN SIMILAR LINE OF BUSINESS THEREFORE THE CIT RIGHTLY ASSUMED HIS JU RISDICTION TO REVISE THE ASSESSMENT ORDER AND HIS ORDER SHOULD BE UPHELD. 8. WE HAVE HEARD BOTH THE PARTIES PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CIT ASSUMED JURISDICTION TO REVISE THE ASSESSMENT O RDER FOR THE REASON THAT THE A.O. HAS NOT CONDUCTED PROPER ENQUIRY OF T HE ISSUES BEFORE COMPLETION OF ASSESSMENT THEREBY THE ASSESSMENT OR DER PASSED BY THE A.O. U/S 143(3) OF THE ACT DATED 2.12.2009 IS ERRON EOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE CI T REVISED THE ASSESSMENT ORDER FOR THE REASON THAT THE A.O. HAS C OMPLETED ASSESSMENT BY REJECTING BOOKS OF ACCOUNTS AND ESTIM ATION OF NET PROFIT OF 5% WITHOUT EXAMINING THE CORE ISSUES OF ADDITION S TO CAPITAL ACCOUNT FIXED ASSETS SUNDRY CREDITORS APPLICABILITY OF TH E PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND ANALYSIS OF NET PROFIT DEC LARED BY THE ASSESSEE. THE CIT FURTHER WAS OF THE OPINION THAT THE A.O. WITHOUT EXAMINING ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 8 THE ABOVE ISSUES SIMPLY COMPLETED ASSESSMENT AND E STIMATED NET PROFIT WITHOUT ANY COMPARABLE CASES OF SIMILAR NATURE THE REFORE THE ASSESSMENT ORDER PASSED BY THE A.O. IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 9. IT IS THE CONTENTION OF THE ASSESSEE THAT THE A. O. HAS EXAMINED ALL THE ISSUES POINTED OUT BY THE CIT AND AFTER SATISFI ED WITH THE EXPLANATION OF THE ASSESSEE CHOSEN TO REJECT BOOKS OF ACCOUNTS AND ESTIMATED NET PROFIT THEREFORE THE CIT WAS INCORR ECT IN HOLDING THAT THE A.O. WAS ERRED IN ESTIMATING NET PROFIT OF 5% ON GR OSS CONTRACT RECEIPTS. THE ASSESSEE FURTHER CONTENDED THAT ONCE THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED UNDER PROVISIONS OF SECTION 145(3) OF THE ACT THERE IS NO NEED TO GO INTO THE SAME BOOKS OF ACCOUNTS TO LOOK INTO OTHER ISSUES. WHEN THE BOOKS OF ACCOUNTS ARE REJECTED AND PROFIT I S ESTIMATED THE A.O. CANNOT MAKE ANY ADDITIONS TO OTHER ISSUES AND ACCORDINGLY THE A.O. HAS RIGHTLY COMPLETED ASSESSMENT BY ESTIMATION OF NET PROFIT THIS CANNOT BE CONSIDERED AS ERRONEOUS IN SO FAR AS IT I S PREJUDICIAL TO THE INTEREST OF THE REVENUE. WE FIND NO MERITS IN THE CONTENTION OF THE ASSESSEE FOR THE REASON THAT THE A.O. HAS NOT EXAM INED THE ISSUES POINTED OUT BY THE CIT IN THE REVISION PROCEEDINGS BEFORE REJECTION OF BOOKS OF ACCOUNTS AND ESTIMATION OF NET PROFIT. WE FURTHER NOTICED THAT ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 9 THE A.O. HAS SIMPLY REJECTED BOOKS OF ACCOUNTS AND ESTIMATED NET PROFIT OF 5% WITHOUT ANY COMPARABLE CASES OF SIMILAR NATUR E TO JUSTIFY THE NET PROFIT APPLIED BY THE A.O. THE CIT ON THE OTHER H AND HAS BROUGHT OUT NUMBER OF ISSUES WHEREIN HE HAS RECORDED HIS CATEGO RICAL FINDING TO THE EFFECT THAT THE A.O. HAS NOT VERIFIED ANY OF THE IS SUES WHICH IS THE REASON FOR REVISION OF ASSESSMENT ORDER. THE CIT Q UESTIONED NUMBER OF ISSUES RIGHT FROM ADDITIONS TO CAPITAL ACCOUNT TO E STIMATION OF NET PROFIT. THE ASSESSEE NEITHER APPEARED BEFORE THE CIT NOR FU RNISHED ANY DETAILS TO JUSTIFY HIS CASE. SINCE THE ASSESSEE FAILED TO APPEAR BEFORE THE CIT WE ARE OF THE OPINION THAT THE CIT CANNOT PRESUME T HINGS WHICH ARE IN THE MIND OF THE ASSESSEE AS SUCH OPINED THAT THE C IT HAS RIGHTLY ASSUMED HIS JURISDICTION TO REVISE ASSESSMENT ORDER ON THE INFORMATION AVAILABLE ON RECORD. ACCORDINGLY WE UPHOLD THE CI T ORDER U/S 263 OF THE ACT AND DISMISS THE APPEAL FILED BY THE ASSESSE E. 10. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ITA NOS.552 & 553/VIZAG/2014: 11. THE BRIEF FACTS OF THE CASE EXTRACTED FROM ITA NOS.552&553/VIZAG/2014 ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF EXECUTION OF CIVIL WORK CONTRACT S FILED HIS RETURNS OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 8.11.2007 DECLARING TOTAL ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 10 INCOME OF RS.3 92 960/- AND FOR THE A.Y. 2008-09 ON 29.9.2008 DECLARING TOTAL INCOME OF RS.4 40 880/-. SUBSEQUEN TLY THE CASE WAS CONVERTED INTO SCRUTINY AND THE ASSESSMENT WAS COMP LETED U/S 143(3) OF THE ACT ON 2.12.2009 DETERMINING THE TOTAL INCOME AT RS.18 00 210/- FOR THE A.Y. 2007-08 AND ASSESSMENT COMPLETED ON 20.8.2 010 DETERMINING THE TOTAL INCOME AT RS.10 41 980/- FOR THE A.Y. 200 8-09 BY ESTIMATING INCOME AT 5% ON GROSS CONTRACT RECEIPTS. 12. THEREAFTER THE CIT HAS SET ASIDE THE ORDER PAS SED BY THE A.O. U/S 263 OF THE ACT AND DIRECTED THE A.O. TO RE-DO THE A SSESSMENT AFRESH AFTER DULY EXAMINING THE ISSUES POINTED OUT BY THE CIT AFTER GIVING ASSESSEE REASONABLE OPPORTUNITY OF BEING HEARD. CO NSEQUENT TO CIT ORDER U/S 263 OF THE ACT THE A.O. PASSED ASSESSMEN T ORDER U/S 144 R.W.S. 263 OF THE ACT AND DETERMINED TOTAL INCOME O F RS.87 20 758/- AND ` 39 52 420/- FOR THE A.Y. 2007-08 & 2008-09 RESPECT IVELY. 13. AGGRIEVED BY THE ASSESSMENT ORDER THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER CONSIDE RING THE EXPLANATIONS FURNISHED BY THE ASSESSEE HELD THAT ON VERIFICATIO N OF THE ASSESSMENT ORDER IT WAS FOUND THAT THE ASSESSING OFFICER HAS MADE ADDITIONS BASED ON THE DIRECTION OF THE CIT U/S 263 OF THE ACT. SI NCE THE CIT AND THE CIT(A) ARE HOLDING EQUAL POSITIONS THE APPEAL AGAI NST THE ASSESSMENT ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 11 COMPLETED AS PER THE DIRECTIONS OF THE CIT U/S 263 OF THE ACT COULD NOT BE DECIDED BY THE CIT(A) ACCORDINGLY DISMISSED TH E APPEAL FILED BY THE ASSESSEE. AGGRIEVED BY THE CIT(A) ORDER THE ASSES SEE IS IN APPEAL BEFORE US. 14. THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT TH E CIT(A) IS ERRED IN NOT ADJUDICATING THE APPEAL FILED BY THE ASSESSEE O N MERITS. THE A.R. FURTHER SUBMITTED THAT THE CIT(A) IS NOT CORRECT IN DISMISSING THE APPEAL SUMMARILY DESPITE THE FACT THAT THE ASSESSEE COULD NOT APPEAR BEFORE THE CIT IN THE PROCEEDINGS U/S 263 OF THE ACT TO JU STIFY HIS CASE. THE A.R. FURTHER SUBMITTED THAT THE CIT SET ASIDE THE A SSESSMENT ORDER WITH AN OBSERVATION THAT THE ASSESSING OFFICER IS DIRECT ED TO MAKE HIS ASSESSMENT DE-NOVO AFTER DULY EXAMINING THE DETAILS THOROUGHLY AND TO HIS SATISFACTION AS PER THE PROVISIONS OF THE ACT. THE DIRECTIONS GIVEN BY THE CIT U/S 263 OF THE ACT IS AN OPEN DIRECTION AND THERE IS NO SPECIFIC DIRECTION TO THE A.O. TO COMPLETE THE ASSESSMENT. THEREFORE ANY ASSESSMENT ORDER PASSED CONSEQUENT TO DIRECTION OF THE CIT U/S 263 OF THE ACT THE FIRST APPEAL IS ALWAYS LIES WITH THE C IT(A). THE CIT(A) WITHOUT APPRECIATING THE FACTS SIMPLY DISMISSED TH E APPEAL FILED BY THE ASSESSEE WITHOUT DISCUSSING THE ISSUES ON MERITS AN D HENCE ORDER OF THE ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 12 CIT(A) SHOULD BE SET ASIDE. ON THE OTHER HAND THE LD. D.R. SUPPORTED THE ORDER OF THE CIT(A). 15. WE HAVE HEARD BOTH THE PARTIES PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE A GAINST THE ORDER PASSED BY THE A.O. U/S 144 R.W.S. 263 OF THE ACT F OR THE REASON THAT THE A.O. HAS PASSED CONSEQUENTIAL ORDER AS PER THE DIRE CTIONS OF THE CIT U/S 263 OF THE ACT. SINCE THE CIT AND THE CIT(A) ARE EQUAL RANK AUTHORITIES ANY ORDER PASSED BY THE A.O. AS PER TH E DIRECTIONS OF CIT U/S 263 OF THE ACT THE CIT(A) CANNOT ADJUDICATE APPEAL FILED BY THE ASSESSEE. WE DO NOT SEE ANY MERITS IN THE FINDINGS OF THE CIT(A) FOR THE REASON THAT AS PER THE PROVISIONS OF SECTION 24 6A OF THE ACT ANY ORDER PASSED U/S 143(3) OR 144 OF THE ACT WHETHER OR NOT SAID ORDER WAS PASSED AS PER THE DIRECTIONS OF THE CIT U/S 263 OF THE ACT THE FIRST APPEAL LIES WITH THE CIT(A). IN THE PRESENT CASE O N HAND ON PERUSAL OF THE ASSESSMENT RECORDS WE FIND THAT THE CIT HAS GI VEN AN OPEN DIRECTION TO THE A.O. U/S 263 OF THE ACT TO RE-DO T HE ASSESSMENT DE-NOVO AFTER DULY EXAMINING THE ISSUES POINTED OUT BY THE CIT. THEREFORE IN OUR CONSIDERED VIEW THE DIRECTIONS GIVEN BY THE CI T IS AN OPEN DIRECTION AND IT IS OPEN TO THE ASSESSING OFFICER TO EXAMINE THE ISSUES ON MERITS AS ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 13 PER THE PROVISIONS OF THE ACT. THE A.O. HAS PASSED FRESH ASSESSMENT ORDER U/S 144 R.W.S. 263 OF THE ACT AND ACCORDINGLY ASSESSMENT ORDER PASSED U/S 143(3) OR 144 OF THE ACT IS AN APPEALAB LE ORDER U/S 246A OF THE ACT. THEREFORE WE ARE OF THE VIEW THAT THE CI T(A) WAS ERRED IN NOT ADJUDICATING THE APPEAL FILED BY THE ASSESSEE ON ME RITS. HENCE WE SET ASIDE THE ORDER PASSED BY THE CIT(A) AND RESTORE TH E APPEAL TO THE FILE OF CIT(A) FOR FRESH ADJUDICATION OF THE ISSUES ON M ERITS. 16. IN THE RESULT THE APPEALS FILED BY THE ASSESSE E IN ITA NOS.552 & 553/VIZAG/2014 ARE ALLOWED FOR STATISTICAL PURPOSES . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH SEPT16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 30.09.2016 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT KOLLI SUBRAMANYAM FLAT NO.502 BHASKARA RESIDENCY PATAMATA LANKA VIJAYAWADA-520 010. 2. / THE RESPONDENT THE ITO WARD-2(2) VIJAYAWADA 3. + / THE CIT VIJAYAWADA 4. + ( ) / THE CIT (A) VIJAYAWADA 5. # . . # / ITA NOS.702/VIZAG/201 552&553/VIZAG/2014 KOLLI SUBRAMANYAM VIJAYAWADA 14 DR ITAT VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . # / ITAT VISAKHAPATNAM