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Income Tax Appellate Tribunal, HYDERABAD BENCHES : BENCH “A” HYDERABAD
Before: SHRI S.S. GODARA & SHRI L.P. SAHU
For Assessee: Shri S. Rama Rao, Adv. For Revenue: Sri A. Sitarama Rao, DR Date of Hearing : 05/07/2021 Date of Pronouncement : 17/08/2021 O R D E R PER S.S. GODARA, J.M. These assessee’s appeals arise against the CIT(A)-7, Hyderabad’s order dated 10.06.2019 in case no.0217/2017-18 and 096/2018-19 for AY 2012-13 and 2013-14; respectively, involving proceedings u/s 153C rws 153A rws 144 of the Income Tax Act, 1961 [ in short ‘the Act’ ].
Heard both the parties. Case file perused.
We notice at the outset with the able assistance of both the parties that the instant lis involving the assessee’s twin appeals do not require us to delve much deeper on the relevant facts. Suffice to say, we advert to the assessee’s second and third substantive grounds in ITA 1313/Hyd/19 for AY 2012-13 and find that the Assessing officer had recorded the corresponding & 1314/Hyd/19 AYs 2012-13 & 2013-14 Sri Gurram Malla Reddy satisfaction note dated 17.3.2017 u/s 153C of the Act that “I have examined the seized documents vide A/CAIMS/06 (page 117) and the information is made available on record. I am satisfied that the books of accounts or documents or assets seized or requisitioned have bearing on the determination of the total income of Sri Gurram Malla Reddy for the A.Y.2012- 13.”
2.1. It is therefore clear as per the Revenue’s paper book itself at page 1 that the assessee’s AO satisfaction has failed to record as to whether the impugned incriminating material satisfied the clinching statutory expressions “belongs to “ or “pertains to” or relates to” in sec.153(I)(a)(b) of the Act. We, therefore, adopt stricter construction only as per hon’ble apex court’s Full Bench decision Commissioner of Customs vs. Dilip Kumar Ray (2018) 9 SC 1 (SC) and quash the impugned assessment as not based on a valid satisfaction recorded u/s 153C of the Act. Ordered accordingly. All other pleadings on merits are renderred infructuous in assessee’s former appeal ITA 1313/Hyd/2019.
We now advert to assessee’s latter appeal ITA 1314/Hyd/2019 for AY 2013-14. We notice with the able assistance of both the parties that the Assessing officer had initiated proceedings u/s 148/147 that “the seized documents in page 117 of A/CAIMS/06 “relates to” and “belongs to” the assessee Sri Gurram Malla Reddy.
3.1. It is thus very much apparent that the Assessing Officer has not taken recourse to the sec. 153C applicable in case of a third party other than the searched assessee despite making it clear that the foregoing seized documents “relates to as well as belongs to the assessee”. We thus invoke the maxim “generalia specialibus non derogant” i.e. a general provision must yield to the special one and accordingly hold that the impugned reopening itself in the instant latter appeal for AY 2013-14 based on the seized material is not 2 & 1314/Hyd/19 AYs 2012-13 & 2013-14 Sri Gurram Malla Reddy sustainable in the eyes of law. It stands quashed for this precise reason. All other pleadings on merits in this latter appeal are renderred academic.
These assessee’s twin appeals are allowed in above terms. Pronounced in Open Court on 17th August 2021.