Itta/20/2020 Of Mr. Thunuguntla Jagan Mohan Rao v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABAD THURSDAY, THE THIRTEENTH DAY OF AUGUSTTWO THOUSAND AND TWENTY PRESENTTHE HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAOANDTHE HONOURABLE SRIJUSTICE T.AMARNATH GOUD INCOME TAX TRIBU NAL APPEAL NO: 20 OF 2020 lncome Tax Tribunal Appeal under Section 260-4 of the lncome Tax Act, 1961 ,against the order dated 2511012019 in ITA No.9B/Hydl2016 on the file of lncome TaxAppellate Tribunal, Hyderabad Bench, Hyderabad, for the AssessmentYear 2011-2012 Between: Thunuguntla Jagan [.4ohan Rao, ...APPELLANT AND The Deputy Commissioner of lncome Tax, Central Circle - 2(1), Aayakar Bhavan,Opposite LB Stadium, Basheerbagh, Hyderabad - 500 004. ...RESPONDENT For the Appellant : SRI A.V.A.SIVA KARTIKEYA, Advocate For the Respondent : SRI B.NARASIMHA SARMA, SENIOR SC FOR CENTRALTAXES The Court delivered the following: JUDGMENT rro\ot tt.\tlLt. sRr.JL S1-l('[ \r.s.r{ \}t \cH \\DR,\ R.\o.\\l) tIo\ot. R,\ut.E sRt ,tt,s't'tcI: ['t'..\\tARN.\'I'H ][(;ouD] 1.1'.1'.A. \o.20 of 2020 .t t ' tX i \l [_ \'t-: tl)cr IIon'blc Sri .lLrslice \,1.S. Iirnrrchrrnclnr Rlo) Ihis appcal is lllecl Lrndcr Scction l(r0..\ ol'the Incorle l-ar .,\ct.196 I [( ]Ibr short ['thc ]..\ct') challcnlrinq thc olclcr dt li- 10-1019 inl.l. \.\o.9E llrcl l0l(r pusscd lrr tlrc Inconre Iax ..\1-rptllrt.''l ribLrnll.l lr ticrrrblrl Ilrlrnch'.,\'. I lr tlcrablcl l iirr short the'l-r'ibLrnal' ) :. I hc lppcllant is en inciir iilLnl usscsscc Lrnrlcl thc .\e t -1. scarch and scizLre [rl'as ]conductccl in thc casc oltlre allpellanton l(r-09-l0l 0. and a noticL' r.urdcr Section l'11(l ) ol' thc' Act u asissued to the appellant tbr the Assessrnent Year 201 l- 12. as the dateol'search lell u'ithin the said Assessment Year. 'l .+. hc asscssec- lllcd its rcturn ot' Income on 0 i-0i-2010,clcclaring the total incorre ol' Its.67.86.3,10i [-.] 5. I)Lrring the coutsc .l' scrtltirt) llrocceclirrgs. thcr\scsscc ltsscsscc s xulh()r'i,/r'(i r'oItc\crttitti\ c [:t1t1-rs31'g( ][ll'otll titlle ][ttr]tinrc and a clctailcd rcpll [rirs ]also [lllctl ]orr [05-0 ][1-l0ll.] 6. Ih,,' Dr'puty [( ]otttttrissiottct ol' lttcorltc ['l ]ar. [(lcntral ][(-ircle-1.]I Ilclcnrbad. thc thcn i\sscssing Olliccr. r icl.' his [orclcr ][clt.i0-03-l0l ][.1.]conrpleLecl thc assessrttcnt. [-l ]hc irtcotttc tetttrttcd *'as tlle [ilrcollrc]lusscssr-d. \o scparatc aclclitions rr crc tttadc. L l-rtcr'. thc [)r'incipal [( ]ortttttis:tiorrct' ol' lttirottrc trr [(('crrlrll).]f ly dcrabacl issr-rcd a slrotr causc Irolicc [pr{)ltosirtg ]to [rcvisc ][thc]asscssurcnt in tcnrs ol'Scction l(ri ol'thc.\ct 8. The Revisional Authority, vide his show cause notice, proposedto rlake an addition o1' Its.l .0.1.66.13.1,'-. being thc total r.aluc ol'goldancl silver .jcuellcry'. lbirnd during thc coursc ol' search ancl seizureproceedings, as unexplairred investrrent in the hands olthe Assessee.-l he Revisional Authority opined that the assessee could not producearrr clocLrnrcr.rtlrrr cr iclcrrce durin_r: thc tirlc ol'tlrc olir.inal ilsscssnrcr'rtancl that hc rras not Iiling rr'tLrrns unclcr thc \\ calth Iar ..\ct. 195 7. 9. In lcsponsc to thc said noticc. tlrc ilsscssc!'lilcd a cietlilcd rcplron ll-0 l-l0l-). In its rcplr. the asscsscc sLrlrnrittccl that lctr.rlns unclcrthc \\icalth ['l ]ar r\cl. It)57 ricre llir.cl in his irrclir idual capacitr. anclalso in thc nanrc ol' I ..lagan Mohan Rao (llt.l:). .1 .Annapr-rrna.'1 .\ancla kishore & l.Saritha (i.c. his lll.,lr & l'anrilr rncrlbcrs) tbr thcAssessrnent Year 20 I l- I 2. FurtheL. personal aflldavits o1- his lamil.vrnembers r.rcre also enclosed to thc repl1,. .Apart liom that, detaileclsLatenrents ol'thc pr"rrchascs nradc bl his lirnrill, nrcnrbers. both rrithinand oLrtsiclc- India. uerc lirlnishccl. 9. In lcsponsc to thc said noticc. tlrc ilsscssc!'lilcd a cietlilcd rcplron ll-0 l-l0l-). In its rcplr. the asscsscc sLrlrnrittccl that lctr.rlns unclcrthc \\icalth ['l ]ar r\cl. It)57 ricre llir.cl in his irrclir idual capacitr. anclalso in thc nanrc ol' I ..lagan Mohan Rao (llt.l:). .1 .Annapr-rrna.'1 .\ancla kishore & l.Saritha (i.c. his lll.,lr & l'anrilr rncrlbcrs) tbr thcAssessrnent Year 20 I l- I 2. FurtheL. personal aflldavits o1- his lamil.vrnembers r.rcre also enclosed to thc repl1,. .Apart liom that, detaileclsLatenrents ol'thc pr"rrchascs nradc bl his lirnrill, nrcnrbers. both rrithinand oLrtsiclc- India. uerc lirlnishccl. 10. It is contcnclcd br the apltcllant Lhat blLrshing asiclc thcsubrrissions ol'the asscsscc. thc Ilcvisiorlrl ALrtholitr cornplctcci theler ision anci passcil arr olclcl under Scction 16,-l ol'tlrc ,,\ct on l0-0.1-l0l,i scttinil nsicle thc rrcll consiclclcci olcicl ol'thc ,\sscssinu Ol'llccr.'I he Ilcvisional ALrthoritr clirectccl thc .,\sscssirr!. Ol'liccr. to r.cclo tltc assessrrent alier "making detailecl encluiries and investigation". llew'as ol'the opinion that the Assessing Olllccr ought 1il have rnade'lurthcr errrluirics'. b,-'lirrc acceptirrs thc slatcnrcnts madc b1 theass!-ssL'c at thr' tirre o1'assessnrcnt. ['l ]he Rer isional Authoritv did notcorrsiclcl tlrc sepalatc rcturns rrrrdcl thc \\'ealth Iax ,\ct. 1957 uncl thcrl'lldar its ancl othcr uraterial Illed br the tirmilv nrcnrbers ol' theLISSCSSL'e.'lurthcr errrluirics'. b,-'lirrc acceptirrs thc slatcnrcnts madc b1 theass!-ssL'c at thr' tirre o1'assessnrcnt. ['l ]he Rer isional Authoritv did notcorrsiclcl tlrc sepalatc rcturns rrrrdcl thc \\'ealth Iax ,\ct. 1957 uncl thcrl'lldar its ancl othcr uraterial Illed br the tirmilv nrcnrbers ol' theLISSCSSL'e. i I . I hc Assessins Ol-llccr'. r idc his olcler clt.i l- I l-10I 5. conrple tccllhc asscssnrcnt oncc agarr.r. r-rnclcr Slcction l-11(j)r',ri, l6j ol'thc' Act, intLrnc u ith thc order ot.Lhc Rcr isional .,\r-rthoritr, lr2. Qucstioning the orclel ol' thc Rer isional ALrtholitydt.l0-03-2015. an appeal rvas filed belbre the I'ribLrnal by theassessee/appcllant on 29-0 I -20 I 6. ll. I'lrr- assesscc contcnds that hc approachr'cl his c()r-lnsL-l onlr alierthc lccci1lt ol thc conscclucntill or(lcr' Pusscrl hr thc ,'\:scssing [( ])l'tlccrorr i I- I l-10 I 5: that hc ri as ur.rcier a bouu lile but crroncoLls [r ]icri [that]run uppeal to b.' tllccl challcrrging onlr thr- colrserltlL'ntill [ordcr ]rtrcl [not]to thc Ilcr isioniil Orclcr: antl thut olrlr llicr It.'irllpr-oachcci [his ][cotttlse ][l.]ll \\ i.lslculizcd thut an rirpcul ought to ltar e bcctt tilcd chllle [ngirlg ][thc]Iicr ision ,\Lrtholitr ['s ]orclcr dt. I 0-l-l() 5 al,srr I-l. [So ][thc ][I'1"1 ],\ [*as ][lllcd ][rvith ]l [delav ][o1' ] [cla1's ][bclbrc ][thc]I'rib Llnalbn 29-01-20 I 6, along '"vith a pctition to condor.tc thc dclay [in]lrling the sarne under sec.5 olthe Lirnitation Act. 1963. 15. Ihc 1'ribr-rnal. b1 thr' inrpLrr:necl orcler clt.l-5-10-1019 irtI.1.,\.\o.98,llycl 30l(r disnrissccl tlrc appeal on thc [groLtnd ]that asscssee lailed to establish that it rias prrcr c'ntccl by a sr.rtficicnt causclirr not lrling the appcal in tinrr. 16. Challcrrging the siinrc. tht' instrnt appcal is lrlecl. 11. I-earned counsel lor appellant contended tl-rat the Tribunal erredin not condoning the delay ol 15.1 dayslll filing the appealI.1..-\.\o.9ll Ihd l0l(r br.lirlc thc lriburral: that thc asscsscc \\asr"rndcl tlre bono fide irrplcssion that tho appcal is rcquirecl to be llledchallenging onlv thc conscquential ordu clt.-i I - l 2-20I 5 and notirgainst thc I{evisional Orclcl clt. l0-0,1-10I 5: und onlr allcr' tlrcassessce a1-rproachcd the counscl. thc appcllant ras aclr isccl that it riasncccssaf\ tochallcn,,,-- the' Ilcr isio,ral ,\Lrtlroritr oldcr also. and thusthc delar ol' 15"1 dar s in lrling thc appcal occurlcd 18. [-earned counsel lbr appellant also contendcd tlrat thc l-ribunalerrecl in holding that the explanation ol'lcrcd by' the asscssce lbr thcdclay in f rling the appeal u'as not bono./ide 11. I-earned counsel lor appellant contended tl-rat the Tribunal erredin not condoning the delay ol 15.1 dayslll filing the appealI.1..-\.\o.9ll Ihd l0l(r br.lirlc thc lriburral: that thc asscsscc \\asr"rndcl tlre bono fide irrplcssion that tho appcal is rcquirecl to be llledchallenging onlv thc conscquential ordu clt.-i I - l 2-20I 5 and notirgainst thc I{evisional Orclcl clt. l0-0,1-10I 5: und onlr allcr' tlrcassessce a1-rproachcd the counscl. thc appcllant ras aclr isccl that it riasncccssaf\ tochallcn,,,-- the' Ilcr isio,ral ,\Lrtlroritr oldcr also. and thusthc delar ol' 15"1 dar s in lrling thc appcal occurlcd 18. [-earned counsel lbr appellant also contendcd tlrat thc l-ribunalerrecl in holding that the explanation ol'lcrcd by' the asscssce lbr thcdclay in f rling the appeal u'as not bono./ide 19. Sri B.Narasirrlra Sarrra, Iearncd Senior Spccial Counsel fbrCentral Taxes appearing fbr respondents, however, supported theordcr passed by' thc [-l ]ribLrnal. and contended that the [-fribunal ]u,asjustilie'd in rc'.jccting thc application lirr conclonation o1'de-lar 10. \\'c lltr c notcd tltc coltcnliot'rs rtl'httth sirics 'l I l. he rr'asorrinq assignecl br the assesscc tbr not prcl'errinu theappcal rvithin thc pcriotl ol'linritation to thc Iribunal rias that he rrasurrcler thc nristal<cn inrprcssion thut on]_r thc conscrlr-rcntial orclcrpilss!'d b\ the r\sscssing O1-lir:el on [j ]l- ll-101 5 ri'as rerlLrirccl to beclrlllcnqc(l urrcl not thc olclcr clt.l0-t)l-l0l 5 ol' thc Rcr isional\uthoritr. und thlt onlr lrlic-r' lrc uorrsultt'rl thc ..\tlr oe utc. lte rcalizcclthc nristakc iln(l thcn challenuccl th,: olticl rrl'the Ilci isirnal ,,\Lrtlrolitr a1'l hc Tribirnal took the vic-rv that thc appcllant ollght to ha\eexplained why alter receiving the order tiom the Revisional Authorityhe did not approach the Advocatc, and held that he cannot say thatonl-v alicr hc rcccived thc order of' the Asscssing Ol'lrcer on 3l-12-l0 i 5. he approached thc Advocatc ll. ln oLrr opinion. this vicrv is not reasonablc lbr the rcason thatthe assc'sscc is an inclir idLral and nra\ not be ucll r crsccl irr lau. lt isnot us i1'thc appcllant rctccl cle libclirtclr in not approltchirrg thc..\clr ocltc llicr hr' rcceivcd the' ordcr of'the' Rcr isittnal autlttlritr l+. ['l'hc ]Itcr isitlrral Authoritr lrrd rcrlittecl thc [tltatlcr ][back ][to ][thc],\ssr'ssing Otllcr'r'to tccio the crctcise of'ltsscssltrctlt [arld ][tllc ][appcllant]coulcl vr-ry rrcll bc urtcler the inrplt'ssiott [that the consc(ltlential ][order]ol'thc Assessing Olliccl only reqrrircd to [be challenged ][and not ][the]order of the Revisional Authoritr'. 25. J'hc asscssee is entitlecl to question the order [passed ]by [the]I{cr.,.sional .\uthority also or.t thc [qlound ]that pou [e ]rs ol' [ler [isiorr] under Sectiolr l6i ol rhc ,\ct ouqlrt not t() ha\ c bcctt inr ol<cd irt thclacts and circunrstarrccs ol'thc case and contcncl bclirrc thc Iribr,rnalthat thc orclcr ol'thc ,.\sscssinlt Otllccr cannot lrc suicl to bc ple.iLrdiciitlto thc intcrcst o1'thc |cr cnLrc c\ clt il it is c|r'onc.ous l)urlicula|l\ \\ hcrc[\\o \ lc\\s arc possihlc. l hc lribLrnal oLrght to lnr c utle ust intposcds()rne costs on thc aplle llalrt in thc cvent it rr as ol'thc opinion that tltesa id period o1'dcla1\\ ils ltot lrroperly e rplaincd in r ie t ol' thcpossible prejudice caused to the appellant i1'the appeal were to bcclisnrissed. 16. The Suprerne( oun in \.Balakrishnan Vs. \lKrishnamurrlrl'' h"thcld that the primarr lirrrction ol'a Courl is tcracliuclicate the clispr-rtc hcttct-n thc partics ancl to aclrancc substarrtialiLrsticc: [ancl ][t]rirt ][ILrlcs ][ol ][linritatitrf ][arc ][n()t ][nrclrrt ][lo ][clcst|or tlrc ][Ii!ht]o1' partics. but thcr l|c nlcant to sc!' Lhat pllrtics (lo not rcsort todilatorr tactics. bLrt st'cli thcir lc'nretlr pronrptlr 16. The Suprerne( oun in \.Balakrishnan Vs. \lKrishnamurrlrl'' h"thcld that the primarr lirrrction ol'a Courl is tcracliuclicate the clispr-rtc hcttct-n thc partics ancl to aclrancc substarrtialiLrsticc: [ancl ][t]rirt ][ILrlcs ][ol ][linritatitrf ][arc ][n()t ][nrclrrt ][lo ][clcst|or tlrc ][Ii!ht]o1' partics. but thcr l|c nlcant to sc!' Lhat pllrtics (lo not rcsort todilatorr tactics. bLrt st'cli thcir lc'nretlr pronrptlr It ht'lcl that therc is lro prcsunll)tion that dcllr in a1IIIollcthe [('or-rrt ]is alri ar s clclibe rate . rncl thc u ords ["sul'llcicnt]e ll Ll:eLrnclcl Scction 5 ol' tlrc l-inritation ,,\ct shoLrlcl lcccirc a libcralconst|Llction so as to aclr ancc sLrbstanlial [justicc.] It held that in every case of delay there can be sorre lapse onthe part of'thc litigant concerncd. but that alone is not enouqh to turndown Iris plea and to shu[ thc door against hirrl and il'thc erplanationdoes not snrack ol' tttrrlu fidt:.s ol it is noL pllt lbrth lts part ol' a d i Iato rrlt()()8jts(( [-] strrteg\. thc [('otrrt ]rntrst sl.rorr utrno!it considcri.rti()n to thc stritor'. ltalso observed that il'the cielar is cl.'liberatc. then thc [('ourt ]slror.rlci notacccnt thc crplanalion. It Irclci thut rr hilc concloninq the [(lcla\. ]the( ourt shoLrlcl conrpcnsi.rtr: thc oppositc purlr ri ith costs )7 . ,\pply ing thc plinciples laid clori n in thc lbor e case to thcir)stan1 cnsc. rie arc o1'the opinion that, in the- tacts and circurnstancesol'thc casc, the explanation 1br the dclay ol-fired b1' thc' appellantcannot be said to srnacl< of malo.fides or that it was put forth as a parto1'a dilatory strategy. and theretbre, the l-ribunal oLrght to havectrndoncd the dclar ol'saicl pcriocl o1' I 5.1 dal s in liling thc l.l'.,,\. ancllalit'n Lrp thc rnatter trn rncrits lE. .\ccorclinglr. thc appcal is allor'rcclt thc orcler dt.l5-10-1019pirsscd br thc Iribunll in l, [.i\.Nro.9Sil Ird ]() l(r lirr thc assessrllentlcar [20 ][ll-ll ][is ][se't ][asidc: thc ][lpplicltion ][lLrl corrdonation ][o1'dclrl ][in]lilinlr thc srricl uppcll stanrls ellosed: rtnd th.' saicl appcirl is rcstorecl ttr1l lc ol- thc ['l ]ribunal: artcl thc I libLrnal shall hcrrr ancl clcciclc thc rppealor.r rlerits in accordance rr ith lari. No costs 2(). Consecluentlv, rriscellaneous petitions, pending if any, shallstand c losed. Sd/-B.S.CHIRANJEEVIJOINT REGISTRAR //TRUE COPY/iSECTIOFFICER To1. The lncome Tax Tribunal, [Hyderabad ][Bench ]-A, [Hyderabad.]2. The Pr. Commissioner of [lncome Tax (Central), ][3'" ][Floor, Posnett Bhavan, Tilak]Road, Ramkote, Hyderabad.1. The lncome Tax Tribunal, [Hyderabad ][Bench ]-A, [Hyderabad.]2. The Pr. Commissioner of [lncome Tax (Central), ][3'" ][Floor, Posnett Bhavan, Tilak]Road, Ramkote, Hyderabad. 3. The Deputy Commissioner [of ][lncome Tax, Central Circle ][-2('1 ]), [Hyderabad]4, One cc to Sri A.V.A.Siva Kartikeya, [Advocate (OPUC)]4, One cc to Sri A.V.A.Siva Kartikeya, [Advocate (OPUC)] 5. One cc to Sri B.Narasimha [Sarma, ][Senior SC ][for Central Taxes, (OPUC)]6. Two CD CopiesTwo CD CopiesKj \ 6. Two CD CopiesTwo CD Copies HIGH COURT DATED:1310812020 JUDGMENT|TTA.No.2O of 2020 Allowing the ITTA without costs. )sV' .I [eP'][ e/\] 1 [Ie].)oz2 I [A'J{] ][?.u20].,]I\\"--Y++.