Syed Rafiuddin, Hyderabad vs Assessee

ITA.No. A.Y. Appellant Respondent 1450/H/2014 Mr. Syed Rafiuddin Hyderabad PAN BERPS6026J 1453/H/2014 Dr. P.S. Prasad Hyderabad PAN AAMPP4844K 1454/H/2014 Mr. M. Surendranath Hyderabad PAN AFYPM6952L 1455/H/2014 Mrs. L. Preetha Priyadarshini 2009- Hyderabad. ACIT, C.C.3 2010 PAN AAUPL9809Q Hyderabad. 1456/H/2014 Smt. Mahita Prasad Cadell Hyderabad. PAN ARWPC6119M 1461/H/2014 Mrs. L. Reena Peterson Hyderabad. PAN APOPP0610C 1462/H/2014 Mr. S. Satyanarayana, Hyderabad. PAN AULPS1897G 1463/H/2014 Smt. Sunita Prasad Hyderabad PAN BKGPP3507E

For Assessees : Mr. P. Murali Mohan Rao For Revenue : Mr. P. Somasekhar Reddy

Date of Hearing : 19.05.2015 Date of Pronouncement : 27.05.2015 2 ITA.No.1450, 1453 to 1456, 1461 to 1463/H/2014 Mr. Syed Rafiuddin & Others, Hyderabad.

ORDER

PER BENCH :

These 8 appeals filed by 8 assessees against the common order of the Ld. CIT(A)-VII, Hyderabad involve common issues and the same therefore have been heard together and are being disposed of by a single composite order for the sake of convenience.

2. The relevant facts of the case giving rise to these appeals are as follows. A search and seizure action under section 132 of the Act was conducted in the case of M/s. MBS Jewellers P. Ltd., as well as other group concerns on 11.03.2010. During the course of search, certain documents relevant to the assessees in the present cases were found and seized. Accordingly, notices under section 153C were issued, in response to which, returns of income for the year under consideration i.e., A.Y. 2009-2010 were filed by the assessees. In the assessments completed under section 143(3) read with section 153C of the Act, the income of the assesses from sale of land was brought to tax by the A.O. in their hands as long term capital gains chargeable to tax at the concessional rate of 20%. Subsequently, the A.O. realized that the capital gain chargeable to tax in the hands of the assessees was actually a short term capital gain chargeable to tax at normal rates. He therefore issued notices to the assessees under section 154 on 04.03.2013 seeking the explanation of the assessees as to why the said mistake in the orders passed under section 143(3) read with section 153C of the Act should not be rectified. The hearing for this purpose was fixed by the A.O. on 08.03.2013. The assessee however did not appear before the A.O. on 3 ITA.No.1450, 1453 to 1456, 1461 to 1463/H/2014 Mr. Syed Rafiuddin & Others, Hyderabad.

08.03.2013 and keeping in view of this non-compliance on the part of the assessees, the A.O. passed orders under section 154 on 08.03.2013 charging capital gains as short term capital gain in the hands of the assessees and calculated the tax payable thereon at normal rate.

3. Aggrieved by the orders passed by the A.O. under section 154, appeals were preferred by the assessees before the Ld. CIT(A). It was contended on behalf of the assesees before the Ld. CIT(A) that the issue as to whether the capital gain was chargeable to tax as long term capital gain or short term capital gain, was debatable issue and the same therefore was beyond the scope of rectification permissible under section

154. The Ld. CIT(A) did not find merit in this contention raised on behalf of the assessees and upholding the orders passed by the A.O. under section 154, he dismissed the appeals filed by the assessee by a common order dated NIL which is impugned by the assessees in the present appeals filed before the Tribunal.

4. We have heard the arguments of both the sides and also perused the relevant material on record. Although the assessees have raised various grounds in their appeals, the Ld. Counsel for the assessee at the time of hearing before us has raised a preliminary issue that no proper and sufficient opportunity was given to the assessees by the A.O. before passing the orders under section 154 rectifying the so-called mistake in the orders passed under section 143(3) read with section 153C of the Act. As pointed out by him, the notices under section 154 were issued by the A.O. requiring the assessees to appear on 08.03.2013. A very short period of 4 4 ITA.No.1450, 1453 to 1456, 1461 to 1463/H/2014 Mr. Syed Rafiuddin & Others, Hyderabad.

days thus was only allowed by the A.O. because of which, the assessees could not appear before the A.O. on 08.03.2013. The A.O. however, proceeded to pass the orders under section 154 without giving any more opportunity to the assessees and this position clearly evident from the orders passed by the A.O. under section 154 shows that proper and sufficient opportunity was not given by the A.O. to the assessees before passing the rectification orders under section 154. We therefore, are inclined to agree with the contention of the Ld. Counsel for the assessee that there was a clear violation of principles of natural justice on the part of the A.O. while passing the orders under section 154 and since this position is not disputed even by the learned D.R., we set aside the impugned order of the Ld. CIT(A) as well as the orders passed by the A.O. under section 154 and restore the matter to the file of the A.O. for passing the orders under section 154 afresh, after giving the assessee proper and sufficient opportunity of being heard.

5. In the result, all the appeals of the assessees are treated as allowed for statistical purposes.

Order pronounced in the open Court on 27.05.2015.

Sd/- Sd/- (SAKTIJIT DEY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated 27th May, 2015.

VBP/- 5

ITA.No.1450, 1453 to 1456, 1461 to 1463/H/2014 Mr. Syed Rafiuddin & Others, Hyderabad.

Copy to

1. Mr. Syed Rafiuddin, Hyderabad. C/o. P. Murali & Co.

2. Dr. P.S. Prasad, Hyderabad Chartered

3. Mr. M. Surendranath, Hyderabad Accountants

4. Mrs. L. Preetha Priyadarshini, 6-3-655/2/3, 1st Hyderabad. Floor, Somajiguda,

5. Smt. Mahita Prasad Cadell, Hyderabad.

Hyderabad.

6. Mrs. L. Reena Peterson, Hyderabad.

7. Mr. S. Satyanarayana, Hyderabad.

8. Smt. Sunita Prasad, Hyderabad.

9. CIT(A)-VII, 3rd Floor Annexe, Aayakar Bhavan, Basheerbagh, Hyderabad.

10. CIT (Central), Hyderabad

11. Guard File.