M/s. Kriti Vanijya Pvt. Ltd., , Kolkata V. DCIT, Circle - 7(1), Kolkata , Kolkata

ITA 1487/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8284 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 10-07-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Opportunity of being heard; Reasonable cause; Set aside
• Section: 143(3); 133(6); 131; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENCH KO LKATA BEFORE SHRI S. S. GODARA, JM & DR. A.L. SAINI, AM ITA NO.1487/KOL/2018 (ASSESSMENT YEAR: 2012-13) M/S KIRTI VANIJYA PVT. LTD. 36, MAHARSHI DEVENDRA ROAD, AKASH GANGA BUILDING, 3 RD FLOOR, RN-314, KOL-7. VS. DCIT, CIRCLE-7(1), KOLKATA ./ ./PAN/GIR NO. : AACCK5329H ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY : SHRI MIRAJ D. SHAH, AR RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 11/11/2019 /DATE OF PRONOUNCEMENT : 22/01/2020 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO ASSESSMENT YEAR 2012-13 IS DIRECTED AGAINST THE ORDER PASSED BY COM MISSIONER OF INCOME TAX- 3, KOLKATA, IN APPEAL NO.1036/CIT(A)-3/C-7(1)/15-16 /KOL, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY ASSESSING OFFI CER U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ), DATED 31.03.2015. 2. AT THE OUTSET ITSELF, LD COUNSEL FOR THE ASSESSE E SUBMITTED THAT ASSESSEE COMPANY COULD NOT MAKE COMPLIANCE OF SUMMON U/S 131 OF THE ACT, AS THE ASSESSEE`S COMPANY`S OFFICE WAS SHIFTED TO CHENNAI CITY AND PRINCIPAL OFFICER OF THE ASSESSEE COMPANY ALSO SHIFTED TO CHENNAI CITY. TO SUBSTANTIATE THIS, THE LD COUNSEL TOOK US THROUGH THE RELEVANT PARA OF THE A SSESSMENT ORDER WHICH READS AS FOLLOWS: FURTHER A SUMMON U/S 131 OF THE ACT, WAS ISSUED TO THE PRINCIPAL OFFICER OF KIRTI VANIJYA PRIVATE LIMITED ON 10.03.2015 ASKING HIM TO PRODUCE ALL OF HIS ABOVE SHARE ALLOTTEE BEFORE THIS UNDERSIGNED. IN REPLY TO THE SUMMON, THE DIRECTOR OF M/S KIRTI VANIJYA PRIVATE LIMITED WRITTEN REPLY ON 20.03.2015 AS BELOW: ITA NO.1487/KOL/2018 M/S KIRTI VANIJYA PVT. LTD. 2 BUT I AM NOT PERSONALLY ABLE TO ATTEND YOUR OFFICE BECAUSE I LIVE IN CHENNAI AND I COULD NOT ARRANGE TO COME TO KOLKATA ON SUCH A SH ORT NOTICE DUE TO SOME FAMILY ISSUES. ALSO THE SHARE CAPITAL INVESTORS IN THE SHARES OF K IRTI VANIJYA PRIVATE LTD COULD HUGE PREMIUM OF RS.240/- THE LD COUNSEL THEREFORE PRAYED THE BENCH THAT IF A N OPPORTUNITY IS GIVEN, THE ASSESSEE COMPANY IS READY TO MAKE COMPLIANCE OF SUM MONS U/S 131 OF THE ACT, HENCE HE PRAYED THE BENCH THAT THE MATTER MAY BE RE MITTED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. LEARNED D R FOR THE REVENUE DID NOT HAVE ANY OBJECTION IF THE MATTER IS REMITTED BACK TO THE FILE OF THE AO. 3. WE HAVE HEAD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD, WE NOTE THAT THE A.O HAD OBSERVED THAT THE PREMIUM ON SHARES WAS UNREASONABLE AND UNBELIEVABLY HIGH. FOR FURTHER VERIFICATION, TH E LD. ASSESSING OFFICER ISSUED SUMMON U/S 131 TO THE DIRECTOR OF THE ASSESSEE COM PANY FOR PRODUCING THE PRINCIPAL OFFICERS AND DIRECTORS OF THE INVESTOR CO MPANIES FOR VERIFYING THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE I NVESTORS. IN RESPONSE TO THE NOTICE, THE DIRECTOR FAILED TO APPEAR PERSONALLY. T HE DIRECTOR OF THE ASSESSEE COMPANY MENTIONED IN HIS REPLY THAT HE LIVES IN CHE NNAI AND IN SUCH SHORT PERIOD IT WILL NOT BE POSSIBLE FOR HIM TO APPEAR PERSONALL Y OR TO PRODUCE ANY DIRECTORS OF INVESTORS COMPANY. HOWEVER, WE NOTE THAT WHILE COMPLETING THE ASSESSM ENT PROCEEDINGS, THE LD. ASSESSING OFFICER CITED CERTAIN CASE LAWS AND ADDED THE ENTIRE SHARE CAPITAL INCLUDING PREMIUM TO THE TUNE OF RS 1,65,00,000/- T O THE TOTAL INCOME OF THE ASSESSEE BY TREATING THE SAME AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT ON THE GROUND THAT THE DIRECTOR OF THE ASSESSEE FAILED TO APPEAR AND PRODUCE THE PRINCIPAL OFFICERS AND DIRECTORS OF INVESTOR COMPANIES AND TH EREFORE THE SHARE CAPITAL MONEY REMAINED UNEXPLAINED. ITA NO.1487/KOL/2018 M/S KIRTI VANIJYA PVT. LTD. 3 BEFORE US, LD COUNSEL PRAYED THAT IF AN OPPORTUNITY IS GIVEN TO THE ASSESSEE, THE ASSESSEE IS READY TO MAKE COMPLIANCE. WE NOTE THAT SINCE, IT IS A REASONABLE CAUSE, WHICH PREVENTED THE ASSESSEE NOT TO MAKE COM PLIANCE OF NOTICES UNDER SECTION 131/ 133(6) OF THE ACT, THEREFORE, WE ARE O F THE VIEW THAT ASSESSEE DID NOT GET PROPER OPPORTUNITY TO REPRESENT ITS CASE AT THE ASSESSMENT STAGE. THEREFORE, WE NOTE THAT THE MAIN GRIEVANCE OF THE A SSESSEE IS THAT NO PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO DISCHARGE THE ONUS CASTED UPON IT AS REQUIRED IN SECTION 68 MATTERS. SO, WE FIND FORCE IN THE SUBMISSION OF THE LD. COUNSEL AND THEREFORE, THE ISSUE MAY BE REMITTED B ACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ASSESSMENT. FOR THAT WE RELY ON T HE JUDGMENT OF THE HONBLE (THREE JUDGE BENCH) OF THE HONBLE SUPREME COURT IN TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC) WHEREIN IT WAS HELD AS FOL LOWS: IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THESE MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF THE TRIBUNAL, THE FACT-FI NDING AUTHORITY, THAT READS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PR OPER OPPORTUNITY OF BEING HEARD. THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CO NSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MA DE AFTER THE ASSESSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE H IGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESSMENT AFT ER 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 T HUS : 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING ASIDE THE ASS ESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME-TAX OFFI CER HAD NOT GIVEN A PROPER OPPORTUNITY OF HEARING 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 A ND IN FAVOUR OF THE ASSESSEE. ITA NO.1487/KOL/2018 M/S KIRTI VANIJYA PVT. LTD. 4 THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS ) AND OF THE TRIBUNAL ARE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDE D TO THE ASSESSING AUTHORITY FOR FRESH CONSIDERATION, AS AFORESTATED. IN VIEW OF THE ABOVE FACTS AND IN THE LIGHT OF THE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA), WE REMAND THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR DE NOVO ASSESSMENT AND TO DEC IDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22/01/20 20. SD/- (S. S. GODARA) SD/- (A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED:22/01/2020 RS, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE ASSESSEE M/S KIRTI VANIJYA PVT. LTD. 2. / THE RESPONDENT.- DCIT, CIRCLE-7(1), KOLKATA 3. ( ) / THE CIT(A), 4. / CIT 5. ! $$% , % , / DR, ITAT, KOLKATA 6. ( / GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA .