M/s Elegant Vinimoy(P) Ltd., Kolkata V. ITO, Ward 5(3), Kolkata, Kolkata

ITA 1013/KOL/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9748 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 11-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANKAR HALDER
• Keywords: Opportunity of being heard; Right to appeal; Set aside
• Section: 142(1)

Judgement Text

1 ITA NO. 1013/KOL/2017 M/S. ELEGANT VINIMOY (P) LTD. AY 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOLKATA ( ) . . , . [ , ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, AM] I.T.A. NO.1013/KOL/2017 ASSESSMENT YEAR: 2012-13 M/S. ELEGANT VINIMOY (P) LTD. (PAN: AAACE5639G) VS. INCOME-TAX OFFICER, WARD-5(3), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 10.06.2019 DATE OF PRONOUNCEMENT 01.07.2019 FOR THE APPELLANT SHRI SUNIL SURANA, FCA FOR THE RESPONDENT SHRI SANKAR HALDER, JCIT, SR. DR ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) , KOLKATA DATED 03.03.2017 FOR ASSESSMENT YEAR 2012-13. 2. AT THE OUTSET, IT HAS BEEN NOTED THAT THE IMPUGNED ORDER IS AN EX-PARTE ORDER. IT WAS BROUGHT TO OUR NOTICE THAT THE LD. CIT(A) GAVE THE TASK OF SERVING NOTICE TO AO WHO IN TURN CLAIMS THAT THE NOTICE SENT TO ROOM NO. 101, 1 ST FLOOR, OLD WING, 7A, BENTINCK STREET WAS RETURNED UN-SERVED AND, THEREFORE, HE DIRECTED THE INSPECTOR TO AFFIX THE NOTICE AT THAT ADDRESS AND DESPITE THAT THE ASSESSEE FAILED TO APPEAR BEFORE HIM, SO THE LD. CIT(A) WAS PLEASED TO DISMISS THE APPEAL OF THE ASSESSEE. IT WAS BROUGHT TO OUR NOTICE THAT IN THE VERY SAME ADDRESS THE TRIBUNAL HAS SENT NOTICE OF HEARING AND IT WAS PROPERLY SERVED, THEREAFTER ONLY THE ASSESSEE WAS ABLE TO ENGAGE THE LEARNED AR TO REPRESENT DURING THIS HEARING BEFORE US. THEREFORE, ACCORDING TO THE LEARNED AR THE PLEA OF THE LD. CIT(A) THAT NOTICES COULD NOT BE SERVED IS FACTUALLY ERRONEOUS. WE NOTE THAT THE TRIBUNALS NOTICE FIXING THE APPEAL ON 10.06.2019 WAS SENT TO THE SAME ADDRESS AND IT HAS BEEN SUCCESSFULLY SERVED. IN THE LIGHT OF 2 ITA NO. 1013/KOL/2017 M/S. ELEGANT VINIMOY (P) LTD. AY 2012-13 THE AFORESAID FACT IT IS EVIDENT THAT THE ASSESSEE EXIST IN THE SAID ADDRESS WHICH THE AO/LD. CIT(A) HAS FOUND FAULT WITH AND MOREOVER THE FACT THAT INSPECTOR COULD AFFIX NOTICE AT THE ADDRESS OF THE ASSESSEE GOES ON TO SHOW THAT ADDRESS IS CORRECT. THEREFORE, THE EX-PARTE ORDER PASSED BY THE LD. CIT(A) CANNOT BE COUNTENANCED AND THE RIGHT TO FILE APPEAL BEFORE LD CIT(A) WILL BE DEFEATED. IT HAS TO BE KEPT IN MIND THAT THE ASSESSEE HAS STATUTORY RIGHT OF APPEAL AND IT WOULD BE BECOME MEANINGLESS IF THE APPEAL IS NOT HEARD AND DECIDED ON MERITS. 3. FURTHER, IT WAS BROUGHT TO OUR NOTICE THAT AO HAS FRAMED THE ASSESSMENT ORDER WITHOUT PROVIDING PROPER OPPORTUNITY TO ASSESSEE. IN ORDER TO BUTTRESS THIS FACT, THE LD. AR DREW OUR ATTENTION TO THE FACT THAT ONLY ONE NOTICE DATED 16.02.2015 WAS ISSUED TO THE ASSESSEE COMPANY TO PRODUCE ITS DIRECTORS AND THAT OF SHARE SUBSCRIBERS. ACCORDING TO LD. AR, ITS DIRECTORS WERE OUT OF STATION SO COULD NOT APPEAR BEFORE THE AO. ACCORDING TO LD. AR, GIVEN AN OPPORTUNITY, THE ASSESSEE IS READY TO PRODUCE THE DIRECTORS. WE NOTE THAT ONLY ONE OPPORTUNITY AFTER SEC. 142(1) NOTICE DATED 09.05.2014 I.E. ON 16.02.2015 DIRECTING IT TO PRODUCE ITS DIRECTORS AND SHARE SUBSCRIBING COMPANIES. SINCE ASSESSEE COULD NOT PRODUCE THEM BEFORE THE AO, HE DREW ADVERSE INFERENCE AGAINST THE ASSESSEE. IT WAS BROUGHT TO OUR NOTICE THAT DIRECTORS OF ASSESSEE COMPANY WAS OUT OF STATION SO COULD NOT APPEAR AND NOW THE LD. AR UNDERTAKES TO PRODUCE THEM BEFORE AO. WE NOTE THAT IN THE FACTS DISCUSSED SUPRA, NO PROPER OPPORTUNITY HAS BEEN GIVEN TO ASSESSEE. THEREFORE, RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC), WHEREIN THE HONBLE SUPREME COURT HAS HELD AS UNDER: IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THESE MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF THE TRIBUNAL, THE FACT-FINDING AUTHORITY, THAT READS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUBMISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CONSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MADE AFTER THE ASSESSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE HIGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESSMENT AFTER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD. TWO QUESTIONS WERE PLACED BEFORE THE HIGH COURT, OF WHICH THE SECOND QUESTION IS NOT PRESSED. THE FIRST QUESTION READS THUS : 3 ITA NO. 1013/KOL/2017 M/S. ELEGANT VINIMOY (P) LTD. AY 2012-13 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING ASIDE THE ASSESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME- TAX OFFICER HAD NOT GIVEN A PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE ? IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THIS QUESTION WHICH IS INHERENT IN THE QUESTION ITSELF : IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS) AND OF THE TRIBUNAL ARE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FOR FRESH CONSIDERATION, AS AFORESTATED. IN THE LIGHT OF THE FACTS DISCUSSED SUPRA, WE SET ASIDE THE ORDER OF THE FIRST APPELLATE AUTHORITY AND REMAND THE MATTER BACK TO THE FILE OF AO TO ADJUDICATE AFRESH AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE IS DIRECTED TO DILIGENTLY PARTICIPATE IN THE ASSESSMENT PROCEEDINGS. 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 01 JULY, 2019 SD/- SD/- (DR. A. L. SAINI) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 01 JULY, 2019 BISWAJIT, SR. PS COPY OF THE ORDER FORWARDED TO: 1 APPELLANT M/S. ELEGANT VINIMOY PVT. LTD.7A, 1 ST FLOOR, R. NO. 101, BENTINCK ST., OLD WING, KOLKATA-700 001. 2 RESPONDENT ITO, WARD-5(3), KOLKATA. 3 4 5 CIT(A)-23, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR