Ganeshvani Exports Pvt. Ltd., Kolkata V. ITO, Ward - 9(2), Kolkata, Kolkata

ITA 1523/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4393 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 27-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Opportunity of being heard
• Section: 131; 68

Judgement Text

1 ITA NO. 1523/KOL/2017 GANESHVANI EXPORTS PVT. LTD., AY 2012-13 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH , AM] I.T.A. NO. 1523/KOL/2017 ASSESSMENT YEAR: 2012-13 GANESHVANI EXPORTS PVT. LTD. (PAN: AAECG6350L) VS. INCOME-TAX OFFICER, WD-9(2), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 26.09.2018 DATE OF PRONOUNCEMENT 31.10.2018 FOR THE APPELLANT SHRI MIRAJ D. SHAH, FCA FOR THE RESPONDENT SHRI ALTAF HUSSAIN, ADDL. CIT, S R. DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-12, KOLKATA DATED 31.03.2017 FOR AY 2012-13. 2. AT THE OUTSET ITSELF, THE LD. AR BROUGHT TO OUR NOTICE THAT THE IMPUGNED ORDER OF LD. CIT(A) IS AN EX PARTE ORDER AND DREW OUR ATTENTION TO THE AFFIDAVIT FILED BY THE ASSESSEE WHICH REVEALS THAT ASSESSEE DID NOT RECEIVE THE NOT ICE OF HEARING FIXED BY THE LD. CIT(A) SO IT COULD NOT APPEAR BEFORE THE LD. CIT(A). 3. IT WAS ALSO BROUGHT TO OUR ATTENTION THAT AO HAS MADE THE ADDITION ON THE SOLE REASON THAT DIRECTOR OF ASSESSEE COMPANY DID NOT APPEAR PE RSONALLY BEFORE HIM. IT WAS BROUGHT TO OUR NOTICE THAT NECESSARY DOCUMENTS TO SUBSTANTIATE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE CAPITAL ALONG WITH PREMIUM WERE ADDUCED BEFORE THE AO AS EARLY AS ON 27.11.2014. IN THE AFFIDAVIT, THE ASSESSEE S DIRECTOR HAS SWORN THAT THEY DID NOT RECEIVE THE SUMMON/NOTICE U/S. 131 OF THE ACT DIREC TING THEIR PERSONAL APPEARANCE BEFORE THE AO, SO THEY DID NOT APPEAR BEFORE THE AO. 2 ITA NO. 1523/KOL/2017 GANESHVANI EXPORTS PVT. LTD., AY 2012-13 4. SO, IT IS THE CASE OF THE ASSESSEE THOUGH THEY H AVE FILED ALL DOCUMENTS TO DISCHARGE THE ONUS U/S. 68 OF THE ACT FOR THE SHARE CAPITAL INTRO DUCED DURING THE YEAR, THE ADDITION WAS SADDLED ON THEM ONLY ON THE BASIS OF NON-APPEARANCE OF ASSESSEES DIRECTOR BEFORE AO, WHICH ACCORDING TO ASSESSEE, HAPPENED BECAUSE OF NO N-RECEIPT OF SUMMON U/S. 131 OF THE ACT. THEREFORE, NO PROPER OPPORTUNITY THE ASSESSEE GOT DURING THE ASSESSMENT PROCEEDINGS. WE FIND FORCE IN THE SAID CONTENTION OF ASSESSEE AN D IN THE LIGHT OF THE AVERMENT IN THE AFFIDAVIT, THAT THEY HAVE FILED ALL SUPPORTING DOCU MENTS BEFORE THE AO ON 27.11.2014, THE FAILURE TO APPEAR PERSONALLY BEFORE THE AO ON ACCOU NT OF ASSESSEE NOT RECEIVING THE SUMMON/NOTICE WOULD TANTAMOUNT TO ASSESSEE NOT GETT ING PROPER OPPORTUNITY BEFORE THE AO. IN THE LIGHT OF THE FACTS AND CIRCUMSTANCES AS NARR ATED ABOVE, WE NOTE THAT THE HONBLE (THREE JUDGE BENCH) OF THE HONBLE SUPREME COURT IN TIN BO X 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. 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. 3 ITA NO. 1523/KOL/2017 GANESHVANI EXPORTS PVT. LTD., AY 2012-13 5. WE ALSO NOTE THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING PVT. LTD. IN ITA NO. 525/20 14 DATED 11.03.2015 WHEREIN AFTER NOTICING INADEQUATE ENQUIRY BY AUTHORITIES BELOW HA VE HELD AS UNDER: 41. WE ARE INCLINED TO AGREE WITH THE CIT(APPEALS) , AND CONSEQUENTLY WITH ITAT, TO THE EXTENT OF THEIR CONCLUSION THAT THE ASSESSEE HEREIN HAD COME UP WITH SOME PROOF OF IDENTITY OF SOME OF THE ENTRIES IN QUESTION. BUT, FROM THIS INF ERENCE, OR FORM THE FACT THAT THE TRANSACTIONS WERE THROUGH BANKING CHANNELS, IT DOES NOT NECESSAR ILY FOLLOWING THAT SATISFACTION AS TO THE CREDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEEN ESTABLISHED. 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OB LIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGICAL CONCLUSION. BUT CIT(APPE ALS), HAVING NOTICED WANT OF PROPER INQUIRY, COULD NOT HAVE CLOSED THE CHAPTER SIMPLY B Y ALLOWING THE APPEAL AND DELETING THE ADDITIONS MADE. IT WAS ALSO THE OBLIGATION OF THE F IRST APPELLATE AUTHORITY, AS INDEED OF ITAT, TO HAVE ENSURED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE ALLEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEME NTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RESPECTIVE ACCOUNTS PRECEDI NG THE TRANSACTIONS IN QUESTION. THIS NECESSITATED A DETAILED SCRUTINY OF THE MATERIAL SU BMITTED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION148 ISSUED BY THE AO, AS ALSO T HE MATERIAL SUBMITTED AT THE STAGE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSI NG TO BE MADE A 'FURTHER INQUIRY IN EXERCISE OF THE POWER UNDER SECTION 250(4). HIS APP ROACH NOT HAVING BEEN ADOPTED, THE IMPUGNED ORDER OF ITAT, AND CONSEQUENTLY THAT OF CI T(APPEALS), CANNOT BE APPROVED OR UPHELD.' 6. IN VIEW OF THE AFORESAID ORDER AND IN THE LIGHT OF THE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA) AND TAKING NOTE OF HONBLE DELHI HIGH COURTS ORDER IN JANSAMPARK ADVERTISING & MARKETING PVT. LTD. (SU PRA), AND SINCE THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO DURING ASSESSMENT PROCEEDINGS AS DISCUSSED ABOVE, SO WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND TH E MATTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMENT AND TO DECIDE THE MATTER IN ACCORDA NCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31/10/201 8 SD/- SD/- (M. BALAGANESH) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31ST OCTOBER, 2018 JD.(SR.P.S.) 4 ITA NO. 1523/KOL/2017 GANESHVANI EXPORTS PVT. LTD., AY 2012-13 COPY OF THE ORDER FORWARDED TO: 1 APPELLANT M/S. GANESHVANI EXPORTS PVT. LTD., C/O, D. J. SHAH & CO., KALYAN BHAVAN, 2, ELGIN ROAD, KOLKATA-700 020. 2 RESPONDENT ITO, WARD-9(2), KOLKATA. 3 4 5 CIT(A)-12, KOLKATA. (SENT THROUGH E-MAIL) CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, SR. PVT. SECRETARY