Siddhipriya Rice Mill Pvt. Ltd., Kolkata V. I.T.O.,Ward-2(4), Kolkata

ITA 109/KOL/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4130 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Earning of tax free income; Rule 8D; Set aside
• Section: 131; 68; 14A; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’ AT KOLKATA [BEFORE SHRI RAJESH KUMAR, HON’BLE ACCOUNTANT MEMBER & SHRI SONJOY SARMA, HON’BLE JUDICIAL MEMBER] I.T.A. No. 109/Kol/2020 Assessment Year: 2012-13 Siddhipriya Rice Mill Pvt. Ltd..................................................................................................Appellant 1/2A/1A, Ram Krishna Naskar Lane, Urvashi Apartment, 4 th Floor, Kolkata – 700010. [PAN: AAPCS9639H] Vs ITO, Ward-2(4), Kolkata..................................................................................................Respondent Appearances by: Shri N.S. Saini, AR appearing on behalf of the Assessee Smt. Ranu Biswas, ACIT, appearing on behalf of the Revenue: Date of concluding the hearing : February 02, 2022 Date of pronouncing the order : April 22, 2022 ORDER PER SONJOY SARMA, JM: This appeal filed by the assessee for A.Y. 2012-13 against the order dated 29.11.2019 passed by the Ld. CIT(A) – 10, Kolkata. The assessee in this appeal has taken the following grounds of appeal: “i. For that, on the facts and in the circumstances of the case, the CIT(A) was unjustified in law and on facts in passing the order dated 29.11.2019 dismissing the appeal without giving adequate opportunity of being heard to the appellant. ii. For that, on the facts and in the circumstances of the case, the CIT(A) was unjustified in dismissing the appeal observing that the notice of hearing could not be served at the address provided on the memo of appeal even though at all material times the registered office of the appellant was located at the same address. iii. For that, on the facts and in the circumstances of the case, the order of the CIT(A) dismissing the appeal without giving due on proper opportunity of hearing be set aside and the CIT(A) be directed to hear the matter afresh. 2 I.T.A. No. 109/Kol/2020 Assessment Year: 2012-13 Siddhipriya Rice Mill Pvt. Ltd. iv. For that, on the facts and in the circumstances of the case, the CIT(A) was unjustified in upholding the addition u/s 68 of the Act totalling Rs. 434 Lacs. v. For that on the facts and in the circumstances of the case, the appellant having furnished relevant documentary evidences establishing the identity and creditworthiness of the share subscribers and proving the genuineness of transaction the authorities below were unjustified in making addition of Rs. 434 Lacs as income of the appellant chargeable u/s 68 of the Act. vi. For that on the facts and in the circumstances of the case, the addition of Rs. 434 Lacs to be deleted. vii. For that on the facts and in the circumstances of the case, the CIT(A) was unjustified in upholding the disallowance of Rs. 8,167/- under section 14A of the Income Tax Act even though no exempt income was earned by the appellant during the relevant year. viii. For that the appellant craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before.” 2. The assessee had electronically filed its return of income for the Assessment Year 2012-13 on 12.10.2013 and it was processed u/s 143(1) of the Income Tax Act, 1961. The assessee’s case was selected for scrutiny under CASS AST module. The business of assessee is investment and trading in shares. During the previous year, the assessee company had received large share application money along with premium. To look into the matter, summons u/s 131 of the I.T. Act, 1961 was issued to the directors of the assessee-company with request to produce directors of share holding company. But, none of them appeared before the A.O. for examination in compliance to the summons issued u/s 131 of the Act and amount of share application money received along with the premium amounting to Rs. 4,34,00,000/- remained unexplained and is added back u/s 68 of the I.T. Act. Further, 3 I.T.A. No. 109/Kol/2020 Assessment Year: 2012-13 Siddhipriya Rice Mill Pvt. Ltd. the AO applied Rule 8D r.w.s. 14A of the Act on best judgement basis disallowing an amount of Rs. 8,167/-. 3. Aggrieved by the said order dated 21.03.2015, the assessee preferred an appeal before the CIT(A)-10, Kolkata. In order to decide the appeal of the assessee, notice of hearing u/s 250 of the Income Tax was issued by the erstwhile CIT(A) on 27.09.2016 fixing the case for hearing on 06.10.2016 but none appeared on the date fixed for hearing. But the AR had submitted written submission on 05.10.2016 and on the submissions made by the appellant, a remand report was also called from the AO by the CIT(A) Kolkata. In the meantime, the case was transferred to another CIT(A) and accordingly a fresh notice u/s 250 was issued upon the appellant on 30.09.2019 fixing the case for hearing on 22.10.2019 and it was sent by post to the address as mentioned in Form No. 35 of the appeal and was returned back with the remark “not known”. Finally the Ld. CIT(A) dismissed the appeal of the assessee. 4. That at the time of hearing, the ld. AR submitted that while passing the order dated 29.11.2019 by ld. CIT(A) dismissing the appeal of the appellant without giving adequate opportunity of being heard observing that notice of hearing could not be served at the address provided in the appeal memo even though at all material times the registered office of the appellant was located at the same address and the order passed by the CIT(A) dismissing the appeal of the assessee without giving due opportunity of hearing be set aside. The Ld. AR prayed that the appeal may be restored to the file of Ld. CIT(A) and necessary directions may be given to hear the matter afresh after giving 4 I.T.A. No. 109/Kol/2020 Assessment Year: 2012-13 Siddhipriya Rice Mill Pvt. Ltd. opportunity to the appellant. The ld. DR was fair enough not to oppose the submissions made by the AR. 5. We would like to decide the issue no. 1 first. Since this issue goes to the roots of the matter in the instant case. The order passed by the Ld. CIT(A) reveals that appellant was not given adequate opportunity of being heard since the notice of hearing was not be served at the address provided on the memo of appeal even though all the material times, the registered office of the appellant was located at the same address as provided in the memo of appeal. We, therefore, in the interest of justice set aside the impugned order passed by the Ld. CIT(A) and remand back to the file of Ld. CIT(A) for deciding the issue afresh. Further, we also direct the assessee to remain vigilant to receive the notice of hearing of Ld. CIT(A) and should not request for adjournment unless otherwise required for reasonable cause and should file all the necessary documents before the Ld. CIT(A) to facilitate the disposal of appeal. It is needless to mention that the assessee should be given proper opportunity of being heard. The remaining grounds of appeal being general and consequential in nature, therefore, need not to be adjudicated. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order Pronounced in the Open Court on 22 nd April, 2022. Sd/- Sd/- (RAJESH KUMAR) (SONJOY SARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 22/04/2022 Biswajit, Sr. PS 5 I.T.A. No. 109/Kol/2020 Assessment Year: 2012-13 Siddhipriya Rice Mill Pvt. Ltd. Copy of order forwarded to: 1. Appellant: Siddhipriya Rice Mill Pvt. Ltd. 2. Respondent: ITO, Ward-2(4). 3. The CIT(A) 4. The CIT 5. DR True Copy, By order, Assistant Registrar ITAT Kolkata Benches, Kolkata