SHANTI GOLD INTERNATIONAL LTD., MUMBAI V. THE DY CIT CENTRAL RG-7(3), MUMBAI

ITA 143/MUM/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 3455 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2014-2015
• Appeal Filed On: 15-02-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; TDS
• Section: 143(3); 250; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA No. 143/Mum/2021 (A.Y: 2014-15) Shanti Gold International Ltd, (Successor to Shanti Gold) 5-D, 5 th Floor, 32, Corporate Avenue, Mahal Industrial Estate, Off Mahakali Caves Road, Andheri (E), Mumbai – 400093 Vs. DCIT, Range – 7(3) 6 th Floor, Aayakar Bhavan, Mumbai – 400 020. ./ज आइआर ./PAN/GIR No. : AATCS8748R Appellant .. Respondent Appellant by : Mr.Fenil Bhatt.AR Respondent by : Mr.Amol B. Kirtane.DR Date of Hearing 30.03.2022 Date of Pronouncement 18.04.2022 आद श / O R D E R PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-49, Mumbai passed u/s 143(3) r.w.s 153B and 250 of the Act, 1961. The assessee has raised the following grounds of appeal: 1. On th e f acts an d in the circumstan ces of th e case and in ITA No. 144Mum/2021 Shanti Gold International Ltd, Mumbai. - 2 - la w, the learned Commissioner of Income-tax (Appeals) ['C IT (A)"] h as erred in dismissing the appeal of the Appellant as not admitted. 2. On th e f acts an d in the circumstan ces of th e case and in la w, the the C IT (A) erred in not appreciating the f act that assessmen t order passed u /s 143(3) r. w.s 153B of the Income tax Act, 1961 (th e Act") on a non-existen t en tity is bad in la w and, th eref ore, liable to be quash ed. The appellant prays that the assessmen t order passed u/s 143(3) r. w.s 153B of the Act be quashed. 3. Without prejudice to the above, on the f acts and in the circumstances of th e case and in la w, the C IT (A) erred in conf irmin g the action of Assessing Of ficer ('AO") in disallowing a su m of Rs.28,6731- allegedly pai d to wards interest on TDS u/s 201(1A) of the Act. The Appellant prays that the C IT(A) ou ght to h ave directed the AO to del ete the af oresaid disallowance. 4 Without prejudice to the above, on the f acts and in the circumstance of the case and in la w, th e C IT (A) erred in conf irmin g the action of the AO in adding a sum of Rs. 75,00,000/- as undisclosed stock of 18kt gold studded jewell ery of 2514.284 grams The Appellant prays that the C IT(A) ough t to h ave directed the AO f or deleting the said addition. 5 Your appellan t craves the leave to add, amend, alter and I or delete any of the Grounds of Appeal either b ef ore or during the course of hearing of appeal. 2. The brief facts of the case that, the assessee is a partnership firm and subsequently converted in to limited company, is engaged in the business of trading, manufacturing of bullion and jewellery made from ITA No. 144Mum/2021 Shanti Gold International Ltd, Mumbai. - 3 - precious metals. There was search and seizure of gold from two passengers flying to Mumbai from Raipur and summons u/s 133(1A) of the Act are issued and the statement was recorded. Whereas, the two persons are working for the assessee for marketing of gold ornaments and the assessee was issued notice u/s 153C of the Act and also the notice u/s 143(2) &142(1) of the Act was issued.In compliance to notice, the Ld.AR of the assessee submitted the information. The assessee has filed the return of income on 25.11.2014 with a total income of Rs.3,76,26,970/- and the A.O on perusal of the facts found that the claim made by the assessee in respect of the house property is not acceptable. The A.O has dealt on the various facts relating to the stock of the gold and was not satisfied with the explanations and made addition of undisclosed stock of Rs.75 lakhs and assessed the total income of Rs.451,55,650/- and passed the order u/s 153B r.w.s 143(3) of the Act dated 31.03.2016. 3. Aggrieved by the order, the assessee has filed an appeal before the CIT(A). Whereas the CIT(A) considered the submissions, the findings of the A.O. and the grounds of appeal. In the appellate ITA No. 144Mum/2021 Shanti Gold International Ltd, Mumbai. - 4 - proceedings, the assessee has raised the additional grounds of appeal in respect of validity of assessment order passed u/s 153B r.w.s 143(3) of the Act. The CIT(A) dealt on the provisions and called for the remand report from the A.O. In the remand report, it was mentioned that the partnership firm exist up to 31.10.2013 in the name of Shanti Gold (assessee) and subsequently it was converted into limited company Shanti Gold International. Therefore the CIT(A) observed that on conversion of firm into limited company. The partnership firm is automatically dissolved and to be treated as non-est. The CIT(A) dealt on the facts and relied on the judicial decisions and observed at Para 6.3.8 and 6.3.9 and dismissed the appeal as un admitted as under: 6.3.8 . In my consi dered view, as the f irm M/s Sh anti Gold legally did not exist at th e time of f iling of appeal and right s and liabilities of the said f irm have been transferred to the company n amin g Shanti Gold In ternational Ltd., it was essen tial to f ile an d peruse appeal in the n ame of the ne w entity. Theref ore, f iling of appeal in the name of impugn ed f irm was legally not permissible and any appeal f iled in this mann er could not be proceeded wi th f or adjudicati on. 6.3.9 . In view of the judicial pronouncements as above, and considering the f acts and circumstances of the case which is tha t the appeal h as been f iled in the name of ITA No. 144Mum/2021 Shanti Gold International Ltd, Mumbai. - 5 - the f irm which did not exist at the time of f iling of appeal. I am lef t wi th no option but not dismiss the appeal as not admitted. 4. Aggrieved by the CIT(A) order, the assessee has filed an appeal before the Honble Tribunal. 5. At the time of hearing the ld. AR submitted that the CIT(A) erred in not providing adequate opportunity in rejecting the additional ground of appeal being validity of assesseement. The Ld.AR emphasized that the appeal was filed within the time and technical errors are to be ignored. Since there are two separate orders pertaining to the Firm and the company, therefore the CIT(A) should have provided adequate opportunity of hearing to explain the reasons and admit the appeal and decide on merits. Contra, the Ld. DR supported the order of the CIT(A). 6. We have heard the rival submissions and perused the material on record. Prima-facie, the CIT(A) has dismissed the appeal without admitting the appeal and treated as non-est. The Ld.AR mentioned that the firm was converted into limited company and the assesseement order was passed on a nonexistent entity and is liable to be quashed. We find that, the assessee ITA No. 144Mum/2021 Shanti Gold International Ltd, Mumbai. - 6 - has raised grounds of appeal challenging the additions by the A.O. and there could be various reasons for not filling the appeal in the name of the limited company and the CIT(A) can not reject the additional ground of appeal without passing a speaking order on the merits of the case. We considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate the case along with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information for early disposal of appeal and allow the grounds of appeal of the assessee statistical purpose. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Sd/- Sd/- ( AMARJIT SINGH) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated 18.04.2022 KRK, PS ITA No. 144Mum/2021 Shanti Gold International Ltd, Mumbai. - 7 - Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. The CIT(A) 4. Concerned CIT 5. DR, ITAT, Mumbai 6. Guard file. आदेशान ु सार/ BY ORDER, //True Copy// 1. ( Asst. Registrar) ITAT, Mumbai