M/s. Purva Metal Sections Private Limited, Bangalore V. Deputy Commissioner Of Income Tax, Circle- 5(1)(3), Bangalore

ITA 1197/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0638 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 17-12-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 27-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Set aside
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO.1197/BANG/2019 ASSESSMENT YEAR : 2015-16 M/S PURVA METAL SECTIONS PVT. LTD., 234, 2 ND FLOOR, BMTC BUS DEPOT, KORAMANGLA, 6 TH BLOCK, 80 FT. ROAD, BENGALURU. PAN AAFCS 6449 B VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-5(1)(3), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI RAVI SHANKAR S.V, ADVOCATE RESPONDENT BY : SHRI PRADEEP KUMAR, ADDL. CIT (DR) DATE OF HEARING : 17.12.2019 DATE OF PRONOUNCEMENT : .12.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER : THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 29-03-2019 PASSED BY LD CIT(A)-5, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2015-16. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE ADDITION OF SHARE CAPITAL & SHARE PREMIUM RECEIVED BY THE ASSESSEE U/S 68 OF TH E ACT. 2. THE LD A.R SUBMITTED THAT THE ASSESSEE IS ENG AGED IN THE BUSINESS OF MANUFACTURING/TRADING IN IRON AND STEEL . THE LD A.R ITA NO.1197 /BANG/2019 PAGE 2 OF 6 SUBMITTED THAT THE RETURN OF INCOME FILED BY THE AS SESSEE FOR THE YEAR UNDER CONSIDERATION WAS SELECTED FOR LIMITED S CRUTINY BY THE AO. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE AO CONVERTED THE LIMITED SCRUTINY INTO COMPLETE SCRUTI NY, AFTER GETTING SANCTION FROM PRINCIPAL CIT ON 28-12-2017. THE AO PASSED THE ORDER IMMEDIATELY ON THE NEXT DAY, I.E., ON 29-12-2 017. THE LD A.R SUBMITTED THAT THE ASSESSEE WAS NOT GIVEN ADEQUATE TIME TO FURNISH EXPLANATIONS. THE LD A.R SUBMITTED THAT THE ASSESS EE HAS RECEIVED SHARE CAPITAL & SHARE PREMIUM TO THE TUNE OF RS.14. 76 CRORES FROM VARIOUS PERSONS AND THE SAME WAS ADDED BY THE AO U/ S 68 OF THE ACT WITHOUT PROVIDING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. HE SUBMITTED THAT THE ASSESSING OFFICER HAS COLLECTED CERTAIN DETAILS FROM INVESTIGATION WING, KOLKATTA AND FORMED THE VI EW THAT THE VARIOUS SHARE APPLICANTS ARE SHELL COMPANIES. THE AO HAS FULLY RELIED UPON THE INFORMATION SUPPLIED BY THE INVESTI GATION WING, WHICH, INTER ALIA, CONTAINED STATEMENTS TAKEN FROM SOME OF THE DIRECTORS OF THE SHARE APPLICANT COMPANIES. HOWEVE R, THE ASSESSEE COULD NOT GET SUFFICIENT TIME FOR FURNISHING EXPLAN ATIONS AND FURTHER THE OPPORTUNITY TO CROSS EXAMINE VARIOUS PERSONS WA S ALSO NOT PROVIDED TO THE ASSESSEE. HE FURTHER SUBMITTED THA T THE LD CIT(A) DID NOT ADDRESS THIS ISSUE. ACCORDINGLY HE PRAYED THAT THE ENTIRE ISSUES MAY BE RESTORED TO THE FILE OF THE AO. 3. THE LD D.R, ON THE CONTRARY, SUBMITTED THAT T HE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITIES. INVITING OUR ATTEN TION TO THE PAGE 2 OF THE ASSESSMENT ORDER, THE LD D.R SUBMITTED THAT THE ASSESSEE DID NOT RESPOND TO SIX NOTICES SENT BY THE AO AND A GAINST SEVENTH NOTICE ONLY, THE ASSESSEE HAS FURNISHED CERTAIN BAR E DETAILS. THE LD ITA NO.1197 /BANG/2019 PAGE 3 OF 6 D.R FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT FUR NISHED VARIOUS DETAILS THAT WERE CALLED FOR BY THE AO. HENCE THE A O DID NOT HAVE ANY OTHER OPTION, BUT TO DRAW ADVERSE INFERENCES ON THE BASIS OF MATERIALS AVAILABLE WITH HIM. 4. IN THE REJOINDER, THE LD A.R SUBMITTED THAT T HE ASSESSEE HAS FURNISHED DETAILS CALLED FOR BY THE AO ON 08-12-201 7. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS SINCE SHIFTED ITS A DDRESS AND THE EARLIER SIX NOTICES WERE SENT TO OLD ADDRESS. THE SEVENTH NOTICE WAS SENT BY E-MAIL AND HENCE THE ASSESSEE HAS IMMEDIATE LY RESPONDED. ACCORDINGLY HE SUBMITTED THAT THERE WAS REASONABLE CAUSE FOR THE ASSESSEE FOR NOT RESPONDING TO THE EARLIER NOTICES, AS THE ASSESSEE WAS NOT AWARE ABOUT THEM. 5. WE HEARD THE PARTIES AND PERUSED THE RECORD . WE NOTICE THAT THE ASSESSMENT ORDER MENTION THE ADDRESS OF A BUILD ING LOCATED IN OLD MADRAS ROAD. ACCORDING TO LD A.R, THE PRESEN T ADDRESS OF THE ASSESSEE IS THE BUILDING LOCATED IN B.NARAYANAPURA AREA. THE NEW ADDRESS HAS BEEN MENTIONED IN FORM NO.35 FILED BEFO RE LD CIT(A). ACCORDING TO LD A.R, THE ASSESSEE COULD NOT RECEIVE NOTICES DUE TO CHANGE OF ADDRESS. BE THAT AS IT MAY, WE NOTICE TH AT THE AO HAS CONVERTED THE LIMITED SCRUTINY INTO COMPLETE SCRUTI NY ON 28-12- 2017 AND THE ASSESSMENT ORDER WAS PASSED ON 29-12-2 017. SINCE THE ASSESSEE HAS CLAIMED THAT IT HAS NOT RECEIVED E ARLIER NOTICES AND SINCE THE ASSESSMENT ORDER WAS PASSED IMMEDIATELY O N THE NEXT DAY AFTER CONVERSION OF LIMITED SCRUTINY INTO COMPLETE SCRUTINY, WE ARE OF THE VIEW THAT THERE IS MERIT IN THE SUBMISSION OF L D A.R THAT THE ASSESSEE DID NOT GET SUFFICIENT OPPORTUNITY TO PRES ENT ITS CASE BEFORE ITA NO.1197 /BANG/2019 PAGE 4 OF 6 THE AO. ACCORDINGLY, IN THE INTEREST OF NATURAL JU STICE, WE ARE OF THE VIEW THAT ENTIRE ISSUES CONTESTED BEFORE US NEED TO BE RESTORED TO THE FILE OF THE AO FOR EXAMINING THEM AFRESH. ACCO RDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THE ISSUES C ONTESTED BEFORE US AND RESTORE ALL THE ISSUES TO THE FILE OF THE AO FOR EXAMINING THEM AFRESH. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 6. THE LD A.R SUBMITTED THAT THE BANK ACCOUNTS OF THE ASSESSEE HAS BEEN ATTACHED AND THE AO MAY BE DIRECTED TO LIF T THE SAME. SINCE WE HAVE RESTORED ALL THE ISSUES TO THE FILE O F AO, THE ASSESSING OFFICER MAY LIFT ATTACHMENT OF BANK ACCOUNTS UPON T HE APPLICATION MOVED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH DECEMBER, 2019. SD/ - (PAVAN KUMAR GADALE) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, THE 19 TH DECEMBER , 2019. /VMS/ ITA NO.1197 /BANG/2019 PAGE 5 OF 6 COPY TO: 1. APPELLANT (S) / CROSS OBJECTOR(S) 2. RESPONDENT(S) 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR ITAT, BANGALORE