DCIT, Hyderabad v. Sri I Raghava Rao, Hyderabad

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMBER IT(SS)A NO.43/HYD/09 : BLOCK ASST. P ERIOD 1990-91 TO 1999-2000 DCIT CC-I HYDERABAD. VS SRI I. RAGHAVA RAO HYDERABAD. (GIR NO. R-703) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI.A. PATRA RESPONDENT BY : SHRI V. RAGHAVENDRA RAO O R D E R PER AKBER BASHA ACCOUNTANT MEMBER THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGA INST THE ORDER PASSED BY THE LEARNED CIT (A) GUNTUR DATED 31- 12-2008 FOR THE BLOCK PERIOD FROM ASST. YEAR 1990-91 TO 1990-2000 AND FOR THE PERIOD FROM 1-4-199 TO 12-1-2000. 2. THE GROUNDS RAISED BY THE REVENUE READ AS UNDER:- 1. ORDER OF THE CIT (A) IS ERRONEOUS ON BOTH FACTS AND LAW OF THE CASE. 2. THE CIT (A) ERRED IN QUASHING THE BLOCK ASSESSMENT BEI NG ILLEGAL AND VOID SINCE THE NOTICE U/S 143(2) OF THE I T ACT WAS ISSUED BEYOND ONE YEAR. 2 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT ISSUE OF NOTICE U/S 143(2) IS PROCEDURAL REQUIREMENT IN SEARCH ASSESSMENTS. 4. THE LEARNED CIT(A) OUGHT TO HAVE CONSIDERED THE FA CTS BROUGHT ON RECORD BY THE ASSESSING OFFICER PROVIDING THE MALAFIDE INTENTION OF THE ASSESSEE IN EXTENDING CO-OPERA TION TO M/S OCTL FOR ACCOMMODATING BOGUS EXPENDITURE TO ITS BOOKS OF ACCOUNTS. 5. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THE FACT THAT THE HON'BLE SETTLEMENT COMMISSION HAS SETTLED THE ISSUE THAT THE COMPANY HAS NOT RECEIVED BACK THE MONEY.' 3. AT THE OUTSET THE LEARNED COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECI SION OF THIS TRIBUNAL IN THE CASE OF DCIT VS KARVY CONSULTANTS LTD. [IT(SS) NO.70/HYD/2003 AND OTHERS DATED 20-12-2007 FOR WHICH THE LEARNED DR DID NOT CONTROVERT THE SAME. WE FIND THAT IN THE AFORESAID ORDER THE TRIBUNAL FOLLOWING THE DECISIONS OF VARIOUS BENCHES OF T HE TRIBUNAL AND THE JUDGMENT IN THE CASE OF BANDANA GOGOI VS. CIT (2 89 ITR 28- GAUHATI HIGH COURT WHEREIN IT WAS HELD THAT NON ISSUAN CE OF NOTICE UNDER SEC. 143(2) IS NOT A MERE PROCEDURAL IRREGULARITY BUT THE SAME IS A JURISDICTIONAL ERROR WHICH INVALIDATE THE ASSESSMENT COMPLE TED U/S 158BC OF THE ACT. ACCORDINGLY FOLLOWING THE SAID DECISIO N OF THE TRIBUNAL WE UPHOLD THE ORDER OF THE CIT (A) QUASHIN G THE BLOCK ASSESSMENT AS ADMITTEDLY NOTICE U/S 143(2) HAS BEEN ISSUED BEYOND A PERIOD OF 12 MONTHS FROM THE END OF THE MONTH IN WHI CH THE RETURN WAS FILED. SINCE THE ASSESSMENT ORDER STANDS QUASHED WE NEE D NOT GO INTO 3 THE MERITS OF THE CASE. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . ORDER WAS PRONOUNCED IN THE OPEN COURT ON 05.01.2010 SD/- (G.C. GUPTA) SD/- (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DT/- 5TH JANUARY 2010. COPY FORWARDED TO: 1. DCIT CC-1 AAYAKAR BHAVAN LB STADIUM ROAD HYDE RABAD.D. 2. SHRI I. RAGHAVA RAO PROP. IR LIASON & CO. 201 S NEHA ENCLAVE 8-3-960/1 SRINAGAR COLONY HYDERABAD. 3. CIT HYDERABAD. 4. CIT(A) GUNTUR. 5. THE D.R. ITAT HYDERABAD. JMR