SBS Paper Boards Private Limited, , Rajamahendravaram V. The ACIT, Circle -1(1), Rajamahendravaram

ITA 16/VIZ/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5671 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 143(3)

Judgement Text

आयकर अपीऱीयअधिकरण, विशाखापटणम पीठ, विशाखापटणम IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM श्री ऱलऱत क ु मार, न्याययक सदस्य एिं श्री एस बाऱाक ृ ष्णन, ऱेखा सदस्य के समक्ष BEFORE SHRI LALIET KUMAR, HON’BLE JUDICIAL MEMBER & SHRI S BALAKRISHNAN, HON’BLE ACCOUNTANT MEMBER आयकर अऩीऱ सं./ I.T.A. No.16/Viz/2020 (ननधाारण वषा / Assessment Year : 2007-08) SBS Paper Boards Private Limited, Rajamahendravaram. PAN: AAJCS 6414 N Vs. ACIT, Circle-1(1), Rajahmundry (अऩीऱाथी/ Appellant) (प्रत्यथी/ Respondent) अऩीऱाथी की ओर से/ Appellant by : Sri G.V.N. Hari प्रत्याथी की ओर से / Respondent by : Sri M.N. Murthy Naik, CIT-DR स ु नवाई की तारीख / Date of Hearing : 30/03/2022 घोषणा की तारीख/Date of Pronouncement : 30/03/2022 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : This appeal filed by the assessee is against the order of the Ld. CIT(A), Rajamahendravaram in ITA No.10116/2013- 14/CIT(A)/RJY, dated 21/10/2019 passed U/s. 143(3) r.w.s 263 of the Act for the AY 2007-08. 2 2. The assessee has raised the following grounds in its appeal: “1. The order of the Ld. CIT(A) is not justified and not in consonance with the facts of the case. 2. The Ld. CIT (A) is not justified in confirming the additions made by the Ld. AO of Rs. 20,01,000/- U/s. 68 of share application money introduced by the Sajja Krishna Prasad and Sajja Srinivasa Chowdary. On the facts and in the circumstances of the case he should have deleted the said additions. 3. The Ld. CIT(A) is not justified in confirming the additions made of Rs. 1,88,056/- by the AO towards outstanding loans of M/s. SB Engineering Enterprises and SK Cones and Cartons. On the facts and in the circumstances of the case he should have deleted the said additions.” 3. Brief facts of the case are that the assesse is a Private Limited Company engaged in manufacture of Kraft Paper filed its return of income for the AY 2007-08 on 13/11/2007 declaring loss at Rs. 38,90,552/-. The scrutiny assessment was completed u/s. 143(3) of the Act on 25/11/2009 determining the loss at Rs. 33,13,336/-. The assessment was subjected to revision U/s. 263 by the CIT, Rajahmundry wherein the Ld. CIT set-aside the assessment on account of some erroneous commissions and omissions noticed therein and directed the Ld. AO to re-do the assessment as per the directions mentioned in the order U/s. 263 of the Act. Consequent to the order issued U/s. 263, the Ld. AO 3 completed the assessment U/s. 143(3) r.w.s 263 on 27/02/2013 wherein the Ld. AO made certain additions / disallowances viz., (i) disallowance of Rs.2,97,954/- on account of electricity charges paid (ii) addition of Rs. 20,01,000/- U/s.68 on account of share application money introduced by Sri Sajja Krishna Prasad and Sri Sajja Srinivasa Chowdary (iii) disallowance Rs. 1,88,056/- towards unsecured loans and (iv) disallowance of interest of Rs. 22,067/- on unsecured loans and determined the total loss at Rs. 13,80,975/-. Aggrieved with the order of the Ld. AO, the assessee went on appeal to the Ld. CIT(A). 4. On appeal, the Ld. CIT (A) after considering the submissions of the assessee as well as the remand report submitted by the Ld. AO, partly allowed the assessee’s appeal and granted relief to the assessee only to the extent of Rs.22,067/- on account of disallowance of interest. Aggrieved with the order of the Ld. CIT (A), the assessee is in further appeal to the Tribunal. 5. Before us, at the outset, the Ld. AR submitted that the assessee had filed the additional evidences / documents before the Ld. CIT(A). The Ld. CIT(A) had called for a remand report from the Ld. Assessing Officer and received the same on 4 26/09/2019. On the basis of the remand report the Ld. CIT(A) decided the issue against the assessee. It was the contention of the assessee that the assessee was not provided the opportunity to confront the remand report and therefore the issues were decided against the assessee violating the principles of natural justice. 6. Per contra, the Ld. DR submitted that a copy of the remand report should have been supplied by the Ld. CIT(A) to the assessee and the assessee chooses not to respond to the remand report and therefore it was submitted that there was no violation to the principles of natural justice and hence the order passed by the Ld. CIT(A) is in accordance with law. 7. We have heard the rival contentions and perused the material on record and the orders of the authorities below. On perusal of paras 7 & 7.1 of the Ld. CIT (A)’s order, it is clear that there is no reference of filing response by the assessee as well as there was no mention about the supply of copy of the remand report to the assessee. Therefore, in our considered opinion once the lower authorities or any authority chooses to decide the issue on the basis of the remand report given by the Assessing Officer, 5 a copy of the remand report should be provided to the assessee to rebut the same in accordance with the principles of natural justice. It is a settled law that no person should leave unheard and it is the fundamental rule of the tax adjudication that while deciding any issue an opportunity of being heard should be provided to the assessee and the assessee be given access to the documents on which the Assessing Officer or the Ld. CIT (A) sought to rely upon so as to rebut the same by the assessee. In the present case, it is apparent from the CIT(A) order that the assessee was not supplied with the remand report before deciding the issues against the assessee. Therefore, considering these facts and circumstances of the case, we deem it fit and proper to remand the entire matter to the file of the Ld. AO for de novo assessment, following the principles of natural justice and in accordance with law. Needless to mention that the Ld. AO should provide proper opportunity of being heard to the assessee as per the principles of natural justice. 8. In the light of the above, the appeal of the assessee is allowed for statistical purposes. 6 Pronounced in the open Court on the 30 th March, 2022. Sd/- Sd/- (एस बाऱाक ृ ष्णन) (ऱलऱत क ु मार) (S.BALAKRISHNAN) (LALIET KUMAR) ऱेखा सदस्य/ACCOUNTANT MEMBER न्याययकसदस्य/JUDICIAL MEMBER Dated : 30.03.2022 OKK - SPS आदेश की प्रतिलिपि अग्रेपिि/Copy of the order forwarded to:- 1. ननधााररती/ The Assessee– SBS Paper Boards (P) Ltd., D.No.4-191, Lalacheruvu, Industrial Area, Rajamahendravaram – 533106. 2. राजस्व/The Revenue – The ACIT, Circle-1(1), Aayakar Bhavan, Kambalatank, Rajamahendravaram, Andhra Pradesh – 533105. 3. The Principal Commissioner of Income Tax-2, Visakhapatnam. 4. आयकर आय ु क्त (अऩीऱ)/ The Commissioner of Income Tax (Appeals), Aayakar Bhavan Annexe, Veerabhadrapuram, Rajamahendravaram, E.G Dist., A.P. 5. ववभागीय प्रनतननधध, आयकर अऩीऱीय अधधकरण, ववशाखाऩटणम/ DR, ITAT, Visakhapatnam 6. गार्ा फ़ाईऱ / Guard file आदेशान ु सार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam