M/s Gupta Fertilizers &, Sangrur V. Addl. Commissioner of Income Tax, Sangrur

ITA 157/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5141 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 23-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN DESH
• Assessee Lawyers: N K GARG
• Keywords: Principle of natural justice; Procedural lapse
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA NO. 157/CHD/2017 ASSESSMENT Y EAR: 2010-11 M/S GUPTA FERTILIZERS & VS. THE ADDL. CIT, CHEMICALS PVT. LTD., SANGRUR. NEW GRAIN MARKET, SANGRUR. PAN NO. AADCG0043P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K.GARG RESPONDENT BY : SHRI KIRAN DESHPANDE, SR.DR DATE OF HEARING : 03.01.2018 DATE OF PRONOUNCEMENT : 12.03.2018 ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSA ILING THE CORRECTNESS OF THE ORDER DATED 21.10.2016 OF LD. CIT (APPE ALS) MEERUT CAMP OFFICE PATIALA PERTAINING TO 2010-11 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: 1. THAT THE IMPUGNED ORDER IS BAD BOTH ON FACTS AN D LAW. 2. THAT THE LD. APPELLATE AUTHORITY WRONGLY AND IL LEGALLY CONFIRMED ADDITION OF RS. 1650000/- U/S 68 ON ACCOUNT OF SHARE CAPITAL AND SHARE PREMIUM IGNORING THE MATERIAL EVIDENCE AND PLEADING. 2. THE LD. AR INVITING ATTENTION TO THE ASSESSMENT ORDER AND THE IMPUGNED ORDER SUBMITTED THAT WHEREAS THE ADDITION WAS MADE BY THE AO IN VIEW OF THE FACT THAT THE REPLIES OF THE PARTIES IN RESPONSE TO NOTICE U/S 131 WERE REPLIED TO AT THE FAG END OF THE ASSESSMENT PROCEEDINGS AND TH US, NOT TAKEN INTO CONSIDERATION BY THE AO. THE CIT(A) CONSIDERING THE CONFIRM ATIONS AND AFFIDAVITS FILED BY THE PARTIES IN COMPLIANCE TO SUMMONS ISSUED U/S 131 BY THE AO CAME TO THE CONCLUSION THAT THESE EVIDENCES AND CONFIRMATIONS WERE NOT SUFFICIENT EVIDENCES IN VIEW OF THE FACT THAT THE CASE LAW RELIED UPON W AS IN THE CONTEXT OF SHARE CAPITAL WHEREAS IN THE ASSESSEE'S CASE, THERE WAS A SHARE PREMIUM. IT WAS A LIMITED PRAYER OF THE LD. AR THAT ON TH IS ASPECT, NO SPECIFIC OPPORTUNITY HAD BEEN GIVEN BY THE CIT(A). ACCORDINGLY, IT WAS HIS LIMITED PRAYER THAT THE ISSUE MAY BE REMANDED TO THE SAID AUT HORITY TO CONSIDER THE SAME DE-NOVO SO AS TO AFFORD THE ASSESSEE AN OPPORTUNITY OF BEING HE ARD. ITA 157/CHD/2017 A.Y. 2010-11 PAGE 2 OF 2 3. CONSIDERING THE ASSESSMENT ORDER AND THE IMPUGNED Y EAR, LD. SR.DR HAD NO OBJECTION IF THE ISSUE IS REMANDED TO THE CIT(A). 4. I HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATER IAL AVAILABLE ON RECORD. I FIND THAT IN THE FACTS OF THE PRESENT CASE, TH E ASSESSEES PRAYER ON FACTS CAN BE ALLOWED. THE RECORD SHOWS THAT AS PER THE CLAIM MADE IN THE ASSESSMENT PROCEEDINGS AS SET OUT BY THE AO, THE ASSE SSEE WAS ONLY REQUIRED TO DEMONSTRATE ITS CLAIM FOR WHICH SUMMONS U/S 131 HAD B EEN ISSUED AND CONFIRMATIONS AND AFFIDAVITS OF THE SHARE CAPITAL SUBSCRIBERS WERE REQUIRED TO BE FILED TO DECIDE THE IDENTITY, GENUINENESS AND CAPACITY OF THE PARTIES. THESE EVIDENCES ADMITTEDLY WERE FILED BUT WERE FILED LATE, THUS NO T CONSIDERED BY THE AO. THE CIT(A) IN THE APPELLATE PROCEEDINGS THOUGH CONSIDE RED THESE, HOWEVER CAME TO THE CONCLUSION THAT IT WAS NOT SUFFICIENT. IN THE CIRCUMSTANCES, I AM OF THE VIEW THAT ONCE EVIDENCE IN COMPLIANCE TO THE DIRE CTIONS OF THE AO WAS MADE AVAILABLE AND THE CIT(A) ON FACTS CONCLUDED THAT IT WA S NOT SUFFICIENT THEN IT WAS INCUMBENT UPON THE SAID AUTHORITY TO COMMUN ICATE THAT CONCLUSION TO THE ASSESSEE AS TO PROVIDE A SPECIFIC OPPO RTUNITY TO ADDRESS THE REASONS ON THE BASIS OF WHICH THE CLAIM WAS BEING DENIED. NO DOUBT, POWERS OF THE COMMISSIONER(APPEALS) ARE CO-TERMINUS WITH THOSE OF THE AO, HOWEVER, ADHERENCE TO THE RULES OF NATURAL JUSTICE CANNOT BE BY PASSED. ACCORDINGLY, IN THE LIGHT OF THE SUBMISSIONS OF THE PARTIES BEFORE THE BENC H, THE IMPUGNED ORDER IS SET ASIDE BACK TO THE FILE OF THE CIT(A) TO MAKE G OOD THIS PROCEDURAL LAPSE. THE CIT(A) SHALL, THEREAFTER PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW DE-NOVO AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BE ING HEARD. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH,2018. SD/- (DIVA SINGH) JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.