I.T.O.,Ward-1(2), Kolkata V. M/s Leading Vanijya Pvt. Ltd., Kolkata

ITA 1570/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1321 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 27-06-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: S M SURANA
• Keywords: Opportunity of being heard; Condonation of delay; Set aside
• Section: 68

Judgement Text

1 ITA NO.1570/KOL/2019 M/S. LEADING VANIJYA PVT. LTD. AY- 2012-13 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ().. , .. !,'#$) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ) & SHR I A. T. VARKEY, JM] ITA NO.1570/KOL/2019 ASSESSMENT YEAR: 2012-13 INCOME-TAX OFFICER, WD-1(2), KOLKATA. VS. M/S. LEAD ING VANIJYA PVT. LTD. (PAN: AABCL 2158C) APPELLANT RESPONDENT DATE OF HEARING 26.02.2020 DATE OF PRONOUNCEMENT 22.05.2020 FOR THE APPELLANT SMT. RANU BISWAS, ADDL. CIT, DR FOR THE RESPONDENT SHRI S. M. SURANA, ADVOCATE ORDER PER A. T. VARKEY, JM: THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-1, KOLKATA DATED 20-03-2019 FOR THE ASSESSMENT YEAR 2012-13. 2. REVENUES APPEAL IS TIME BARRED BY 18 DAYS. AFT ER HEARING BOTH THE SIDES AND AFTER GOING THROUGH THE PETITION FOR CONDONATION OF DELAY , WE CONDONE THE DELAY AND ADMIT THE APPEAL FOR HEARING. 3. THE SOLE GROUND OF APPEAL OF REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE ADDITION OF RS.3.23 CR. MADE BY AO U/S . 68 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO HAS ADDED TO THE TOTAL I NCOME OF THE ASSESSEE OF RS.3.23 CR. U/S. 68 OF THE ACT PRIMARILY DUE TO NON-APPEARANCE OF TH E SHAREHOLDERS AND DIRECTORS BEFORE HIM ON 24.02.2015. THE AO THEREAFTER DREW THE CONCLUSI ON AFTER GOING THROUGH THE SUBMISSION AND DOCUMENTS PRODUCED BEFORE HIM THAT THE SHARE SU BSCRIBERS MUST BE DUBIOUS DUE TO WHICH THEY PREFERRED NOT TO ATTEND BEFORE HIM. WE NOTE THAT AO GAVE ONLY ONE NOTICE TO THE SHARE SUBSCRIBERS AND THEREAFTER HAVE DRAWN THE ADV ERSE INFERENCE AGAINST THE ASSESSEE WITHOUT ISSUING ANY OTHER NOTICES. ON APPEAL, THE LD. CIT(A) SOUGHT A REMAND REPORT FROM 2 ITA NO.1570/KOL/2019 M/S. LEADING VANIJYA PVT. LTD. AY- 2012-13 THE AO ON 07.01.2019 AND GAVE AO TIME TILL 07.02.20 19 TO FILE REPORT. HOWEVER, ACCORDING TO LD. CIT(A), THE AO DID NOT BOTHER TO FILE THE RE MAND REPORT CALLED FOR BY HIM IN RESPECT OF THE SUBMISSION OF LD. AR FILED BEFORE HIM. SO TH E LD. CIT(A) CONCLUDED HE HAS NO OPTION BUT TO ACCEPT THE POSITION TAKEN BY THE ASSESSEE ; AND HAS ALLOWED THE APPEAL OF THE ASSESSEE WITHOUT SPELLING OUT THE REASONS AS TO HOW HE FINDS THE ASSESSEE WAS ABLE TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF T HE SHARE TRANSACTION. WE NOTE THAT THE IMPUGNED LD. CIT(A)S ORDER IS PER-SE NON-SPEAKING AND PASSED WITHOUT APPLICATION OF MIND, THEREFORE, IT HAS TO BE SET ASIDE. HOWEVER, WE NOTE THAT THE AO HAS GIVEN ONLY ONE OPPORTUNITY TO THE SHARE SUBSCRIBING COMPANIES TO P RODUCE THEIR DIRECTORS AND SINCE THEY FAILED TO PRODUCE THEM THE AO DREW ADVERSE VIEW AGA INST THE ASSESSEE. ACCORDING TO LD. AR THE DIRECTORS WERE OUT OF STATION, SO THEY COULD NOT APPEAR AND GIVEN AN OPPORTUNITY THEY WILL BE PRODUCED. SINCE WE NOTE THAT DURING THE ASS ESSMENT STAGE THE AO HAS NOT GIVEN PROPER OPPORTUNITY TO ASSESSEE AND IN SUCH SCENARIO THEN THE MATTER NEEDS TO BE REMANDED BACK TO AO FOR FRESH ADJUDICATION. COMING TO SUCH A DECISION, WE RELY ON THE HONBLE SUPREME COURT DECISION IN TIN BOX COMPANY VS. CIT ( 2001) 249 ITR 216 (SC) WHEREIN IT WAS HELD THAT IF THE ASSESSEE DID NOT GET PROPER OP PORTUNITY BEFORE AO, THEN THE MATTER NEEDS TO BE REMANDED BACK TO AO. IN THE SAID JUDGMENT, T HE HONBLE APEX COURT HAS HELD AS UNDER (HEAD NOTE): HELD, REVERSING THE DECISION OF THE HIGH COURT, TH AT ONCE THE TRIBUNAL FOUND THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORT UNITY OF BEING HEARD, THAT THE ASSESSEE COULD HAVE PLACED THE EVIDENCE BEFORE THE APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL WAS REALLY OF NO CONSEQUENCE FOR IT WAS THE ASSESSMENT ORDER THAT CO UNTED: THAT ORDER HAD TO BE MADE AFTER THE ASSESSEE HAD BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. THEREFORE, IN VIEW OF THE ABOVE FACTS, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF THE AO FOR FRESH ADJ UDICATION AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THEREFO RE, APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 5. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BE ING PRONOUNCED AFTER THE NINETY (90) DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAO RDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKD OWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECIS ION OF THE CO-ORDINATE BENCH OF THE 3 ITA NO.1570/KOL/2019 M/S. LEADING VANIJYA PVT. LTD. AY- 2012-13 MUMBAI TRIBUNAL IN THE CASE OF DCIT VS. JSW LIMITED IN ITA NO. 6264/MUM/2018 & 6103/MUM/2018, ASSESSMENT YEAR 2013-14, ORDER DT. 1 4 TH MAY, 2020. IN THE LIGHT OF THE ABOVE DISCUSSION, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, APPEAL OF REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 22ND MAY , 2020. SD/- `SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED :22ND MAY, 2020 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-1(2), KOLKATA. 2 RESPONDENT M/S. LEADING VANIJYA PVT. LTD., 1 0/C, HALWASIA ROAD, GROUND FLOOR, ROOM NO. 1, KOLKATA-700007 3. 4. 5. CIT(A)-1, KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) BY ORDER, / TRUE COPY, ASSISTANT REGISTRAR