M/s Baba Iron Industries Pvt. Ltd., Kolkata V. D.C.I.T.,Circcle-4(2), Kolkata

ITA 1328/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8237 (ITAT-KOLKATA)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 30-05-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard; Reassessment proceedings; Set aside
• Section: 143(3); 68; 263

Judgement Text

1 ITA NO. 1328/KOL/2019 M/S. BABA IRON INDUS TRIES P. LTD.., AY- 2012-13 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 1328/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. BABA IRON INDUSTRIES PVT. LTD. (PAN: AABCB0522C) VS. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-4(2), KOLKATA. APPLICANT RESPONDENT DATE OF HEARING 07.06.2019 DATE OF PRONOUNCEMENT 17.07.2019 FOR THE APPLICANT SHRI SOUMITRA CHOUDHURY, ADVOCATE FOR THE RESPONDENT SHRI SHANKAR HALDER, JCIT, SR. D R ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-2, KOLKATA DATED 05.07.2018 FOR AY 2012-13. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF ASSESS EE IS AGAINST THE ACTION OF LD. CIT(A) IN CONFIRMING THE ADDITION TO THE TUNE OF RS.94,90, 50,000/- ON ACCOUNT OF UNEXPLAINED CREDIT. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT IN THI S CASE ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) DATED 18.11.2014 COMPUTING TOTAL INCOME OF RS.2,33,783/-. LATER ON, IT WAS FOUND THAT THE SAID ASSESSMENT ORDER WAS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEREFORE, THE PR. CIT-2, KOLKATA VIDE HIS ORDER DATED 06.03.2017 PASS ED U/S. 263 OF THE ACT SETTING ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO MAKE FRESH ASS ESSMENT AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREAFTER, THE AO PAS SED REASSESSMENT ORDER ASSESSING THE TOTAL INCOME U/S. 68 OF THE ACT AT RS.96,65,75,000/ -. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF AO. HENCE, ASSESSEE IS IN APPEAL BEF ORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET ITSELF, THE LD. AR OF THE ASSE SSEE BROUGHT TO OUR NOTICE THAT THE AO HAS 2 ITA NO. 1328/KOL/2019 M/S. BABA IRON INDUS TRIES P. LTD.., AY- 2012-13 MADE THE ADDITION IN THE REASSESSMENT PROCEEDINGS U /S. 144/263 OF THE ACT. ACCORDING TO LD. AR, PROPER OPPORTUNITY OF HEARING WAS NOT AFFOR DED TO THE ASSESSEE BY THE AO IN THE REASSESSMENT PROCEEDINGS AND HENCE, THE ASSESSEE WA S UNABLE TO APPEAR BEFORE THE AO AT THE TIME OF REASSESSMENT PROCEEDINGS. SINCE THE ASSESSE E DID NOT APPEAR BEFORE THE AO, THE ADVERSE INFERENCES WERE DRAWN AGAINST THE ASSESSEE AND THE ADDITION WAS MADE. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF AO. ACCORDI NG TO LD. AR, THE ASSESSEE IS READY TO COMPLY WITH THE DIRECTION OF AO IF AN OPPORTUNITY I S GIVEN TO THEM TO APPEAR BEFORE THE AO. SINCE THERE WAS NO PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE, THE LD. AR PRAYS THAT THE MATTER MAY BE REMANDED BACK TO THE AO. THE LD. DR DOES NOT HAVE ANY OBJECTION IF THE ASSESSEE/DIRECTORS COOPERATES BEFORE THE AO BY APPE ARING BEFORE THE AO ALONG WITH PROPER DOCUMENTS AND EVIDENCES. . 5. WE NOTE THAT ASSESSEE COULD NOT APPEAR BEFORE TH E AO. SINCE THE ASSESSEE DID NOT TURN UP BEFORE THE AO, HE DREW ADVERSE INFERENCE AG AINST THE ASSESSEE AND MADE THE ADDITION EX PARTE U/S. 144/263 OF THE ACT. WE ALSO NOTE THA T PURSUANT TO ORDER PASSED U/S. 263 OF THE ACT THE AO HAS MADE THE REASSESSMENT ORDER WITHOUT PROPERLY FOLLOWING THE DIRECTIONS/GUIDE LINES OF THE LD. PR. CIT. THE LD . CIT(A) HAS CONFIRMED THE ACTION OF AO BY AN EX PARTE ORDER. HOWEVER, DURING THE HEARING BEFORE US, THE LD. AR HAS BROUGHT TO OUR NOTICE THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS RE ADY TO COOPERATE IN THE ASSESSMENT PROCEEDINGS BEFORE THE AO. IN THE AFORESAID CIRCUM STANCES, WE ARE OF THE OPINION THAT THERE WAS NO PROPER OPPORTUNITY GRANTED TO THE ASSESSEE A T THE TIME OF ASSESSMENT STAGE. THEREFORE, RELYING ON THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC), WHEREIN TH E 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 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 3 ITA NO. 1328/KOL/2019 M/S. BABA IRON INDUS TRIES P. LTD.., AY- 2012-13 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. 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. WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AN D REMAND THE MATTER BACK TO THE FILE OF AO TO FRAME DE NOVO ASSESSMENT AFTER AFFORDING REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE TO DILIGENTLY PARTICIPATE IN THE ASSESSMENT PROCEEDINGS SUBJECT TO PAYMENT OF COST OF RS.5000/-. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17TH JULY , 2019. SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 17TH JULY, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. BABA IRON INDUSTRIES PVT. LTD., KRISHNA SQUARE, 2A, GRANT LANE, 7 TH FLOOR, ROOM NO. 7M, KOLKATA-700 012. 2 RESPONDENT DCIT, CIRCLE-4(2), KOLKATA 3. 4. CIT(A)-2, KOLKATA (SENT THROUGH E-MAIL) CIT-, , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR