ITO, WD-5(1), KOLKATA, Kolkata V. M/s Surichi Distributors Pvt. Ltd., Kolkata

ITA 1172/KOL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6425 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 15-09-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAURABH KUMAR
• Keywords: Opportunity of being heard
• Section: 142(1); 133(6); 68; 263

Judgement Text

1 ITA NO. 1172/KOL/2015 SURICHI DISTRIBUTOR PVT. LTD., AY 2009-10 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) BEFORE . , /AND . . , ) [BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI A. T. VA RKEY, JM] I.T.A. NO. 1172/KOL/2015 ASSESSMENT YEAR: 2009-10 INCOME-TAX OFFICER, WD-5(1), KOLKATA. VS. SURICHI D ISTRIBUTOR PVT. LTD. (PAN: AADCS7238J) APPELLANT RESPONDENT DATE OF HEARING 17.04.2018 DATE OF PRONOUNCEMENT 03.05.2018 FOR THE APPELLANT SHRI SAURABH KUMAR, ADDL. CIT, SR . DR FOR THE RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-2, KOLKATA, DATED 29.06.2015 FOR AY 2009-10. 2. THE MAIN GRIEVANCE OF THE REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION MADE U/S. 68 OF THE ACT TO THE TUNE OF RS.4,11,50,000/-. 3. AT THE OUTSET, WE NOTE THAT THE ASSESSMENT ORDER PASSED BY THE AO IS PURSUANT TO THE ORDER OF THE LD. CIT PASSED U/S. 263 OF THE INCOME -TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 18.03.2014. WE NOTE THAT WHILE GIV ING EFFECT TO THE ORDER OF LD. CIT, PASSED U/S. 263, THE AO HAS PASSED THE ASSESSMENT W ITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE. WE NOTE FROM A PERUSAL OF THE PAGE 6 OF THE ASSESSMENT ORDER WHEREIN THE AO HAS STATED THAT HE HAS ISSUED A SHOW CAUSE NOTICE DATED 18.02.2015. FURTHER ON A PERUSAL OF THE ORDER SHEET OF THE DEPARTMENT, WE NOTE THAT ONLY TH REE DATES ARE GIVEN IN THE ORDER SHEET MEANING ONLY TWO EFFECTIVE HEARING FIXED BY AO. FR OM A PERUSAL OF ORDER SHEET, WE UNDERSTAND THAT THE AO ISSUED NOTICE U/S. 143(2) AN D 142(1) OF THE ACT FIXING THE DATE FOR HEARING ON 22.12.2014. THEREAFTER ON 22.12.2014 THE AO NOTES THAT THE ASSESSEE COMPANY SUBMITTED A LETTER IN COMPLIANCE TO NOTICE U/S. 142 (1) OF THE ACT. THEN WE NOTE A DATE ON 15.12.2014 THE AO ISSUED NOTICE U/S. 133(6) OF THE ACT TO ONE BRANCH MANAGER OF UNION 2 ITA NO. 1172/KOL/2015 SURICHI DISTRIBUTOR PVT. LTD., AY 2009-10 BANK OF INDIA AND VIJAYA BANK. THEREAFTER, THE ORD ER SHEET DOESNT SAY ANYTHING ABOUT HEARING ETC. ACCORDING TO LD. AR, THE ASSESSEE NEVE R RECEIVED ANY NOTICE. ACCORDING TO LD. AR, THE ASSESSEE HAD PRODUCED ALL THE DOCUMENTS BEF ORE THE AO TO DISCHARGE THE ONUS CASTED UPON IT. HOWEVER, WE NOTE THAT THE AO HAS N OT RECORDED ANYTHING TO THAT EFFECT AND WITHOUT CONSIDERING THE EVIDENCES ADDUCED BY THE AS SESSEE, IN AN ARBITRARY MANNER WITHOUT FOLLOWING THE GUIDELINES TO INVESTIGATE AS DIRECTED BY THE LD. CIT HAS PASSED AN ASSESSMENT ORDER AGAINST THE ASSESSEE. ON APPEAL, WE NOTE THA T THE LD. CIT (A) HAS SIMPLY ACCEPTED WHATEVER THE ASSESSEE PRODUCED WITHOUT EXAMINING TH E VERACITY OF THE AVERMENTS PLEADED BEFORE HIM, WHICH MAKES THE ORDER BAD IN LAW FOR NO N APPLICATION OF MIND. WE ALSO HASTEN TO SAY THAT WE CANNOT TAKE OUR EYES OF THE FACT THA T AO HAS ALSO NOT TAKEN INTO CONSIDERATION THE EVIDENCE ADDUCED BY THE ASSESSEE TO DISCHARGE T HE ONUS CASTED UPON IT WHILE ADJUDICATING THE ISSUE BEFORE HIM. SO, FOR THE END S OF JUSTICE, THE MATTER NEEDS TO BE REMANDED BACK TO THE AO FOR FRESH ASSESSMENT DE NOV O. TAKING INTO CONSIDERATION THE AFORESAID FACTS, WE NOTE THAT SINCE THE ASSESSEE DI D NOT GET PROPER OPPORTUNITY BEFORE THE AO AS EVIDENT FROM A PERUSAL OF THE ORDER SHEET AND AS DISCUSSED ABOVE, WE ARE OF THE OPINION THAT THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BE FORE THE AO. THE HONBLE SUPREME COURT (THREE JUDGES BENCH) IN THE CASE OF TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC) 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 R EADS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY OF BEI NG 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 RE ASONABLE 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 : 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 H EARING TO THE ASSESSEE ? IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THI S QUESTION WHICH IS INHERENT IN THE QUESTION ITSELF : IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. 3 ITA NO. 1172/KOL/2015 SURICHI DISTRIBUTOR PVT. LTD., AY 2009-10 THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS) AND OF THE TRIBUNAL A RE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FOR FRESH CO NSIDERATION, AS AFORESTATED. 4. IN THE LIGHT OF THE AFORESAID FACTS AND CIRCUMST ANCES OF THE CASE, WE ARE INCLINED TO SET ASIDE THE ORDER OF LD. CIT(A) AND REMAND THE MATTER BACK TO THE AO FOR DE NOVO ASSESSMENT AS PER THE GUIDELINES OF LD CIT, AND IN ACCORDANCE TO LAW, FOR WHICH WE RELY ON THE DECISION OF HONBLE SUPREME COURT IN TINN BOX (SUPRA). APP EAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 3RD MAY, 2018. SD/- SD/- (J. SUDHAKAR REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3RD MAY, 2018 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-5(1), KOLKATA. 2 RESPONDENT M/S. SURICHI DISTRIBUTOR PVT. LTD., 59, N. S. ROAD, 3 RD FLOOR, KOLKATA-700 001. 3. THE CIT(A) , KOLKATA. 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, SR. PVT. SECRETARY