ITO, WARD-10(1), Kolkata, Kolkata V. M/s Ascent Commerce Private Limited, Kolkata

ITA 1695/KOL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1623 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 24-08-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOWDHURY
• Keywords: Opportunity of being heard; Onus to prove; Set aside
• Section: 131; 68; 6; 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A, BENC H KOLKATA BEFORE SHRI A. T. VARKEY, JM &DR. A.L.SAINI, AM ./ITA NO.1695/KOL/2016 ( / ASSESSMENT YEAR: 2012-13) ITO, WARD-10(1), KOLKATA VS. M/S ASCENT COMMERCE PVT. LTD. AD-76, SALT LAKE CITY, SECTOR-I, KOLKATA-700064. ./ ./PAN/GIR NO.: AAJCA 7217 R (ASSESSEE) .. (REVENUE) ASSESSEEBY : SHRI ROBIN CHOWDHURY, ADDL. CIT (DR) RESPONDENT BY :SHRI AKKALDUDHWEWALA, FCA / DATE OF HEARING : 01/08/2019 /DATE OF PRONOUNCEMENT : 06/09/2019 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERT AINING TO ASSESSMENT YEAR 2012-13, IS DIRECTED AGAINST THE ORDER PASSED BY T HE COMMISSIONER OF INCOME TAX (APPEAL)-4, KOLKATA, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) DATED 28.03.2015. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE IS A GAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION OF RS. 6,01,00,00 0/- MADE ON ACCOUNT OF SHARE CAPITAL AND ALONG WITH SHARE PREMIUM RECEIVED U/S 6 8 OF THE ACT. M/S ASCENT COMMERCE PVT. LTD. ITA NO.1695/KOL/2016 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 3. AT THE OUTSET ITSELF, LD. D.R. FOR THE REVENUE POINTED OUT THAT THE ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER BECAUSE OF NON-P ARTICIPATION OF THE ASSESSEE AT THE ASSESSMENT STAGE. DURING THE ASSESSMENT PROCEED INGS, THE LD. A.R FOR THE ASSESSEE COMPANY SUBMITTED THE BOOKS OF ACCOUNTS ON LY. THE LD. D.R. POINTED OUT THAT THE ASSESSEE COMPANY DURING THE ASSESSMENT PRO CEEDINGS, DID NOT RESPOND TO SUMMON U/S 131 OF THE ACT. THE SHARE SUBSCRIBING CO MPANIES ALSO DID NOT RESPOND TO NOTICE U/S 133(6) OF THE ACT. THEREFORE, THE THR EE INGREDIENTS OF SECTION 68 OF THE ACT NAMELY IDENTITY, GENUINENESS AND CREDITWORTHINE SS HAVE NOT BEEN PROVED BY THE ASSESSEE COMPANY, IN RESPECT OF SHARES CAPITAL/ PREMIUM RECEIVED FROM THE SHARE SUBSCRIBING COMPANIES. THE LD. D.R. FURTHER S UBMITS BEFORE US THAT DURING THE APPELLATE STAGE ALSO THERE WERE NO COMPLIANCE O F SECTIONS 131 AND 133(6) OF THE ACT. THE LD. D.R. SUBMITS THAT MERELY DUMPING OF PAPERS AND DOCUMENTS ON THE TABLE OF THE ASSESSING OFFICER DOES NOT IN ANY WAY MEAN COMP LIANCE. THE BURDEN OF PROOF CANNOT BE SHIFTED ON THE REVENUE BY CART LOAD OF DO CUMENTS. THE DOCUMENTS SUBMITTED MUST BE EXPLAINED. THEREFORE, LD DR PRAYE D THE BENCH THAT MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSIN G OFFICER FOR DE NOVO ASSESSMENT. 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED BEFORE US THAT THE ASSESSEE FURNISHED BOOKS OF ACCOUNTS BEFORE THE ASS ESSING OFFICER AS WELL AS LD. CIT(A). THE LD. COUNSEL THEREAFTER EXPLAINED REASON S BEFORE THE BENCH ABOUT THE NON-COMPLIANCE OF NOTICE U/S 131 AND 133(6) OF THE ACT. HE STATED THAT THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES AND AS SESSEE COMPANY WERE OUT OF STATION, THEREFORE THEY COULD NOT APPEAR ON THE DAT E OF COMPLIANCE.GIVEN AN OPPORTUNITY, THE ASSESSEE IS READY TO MAKE COMPLIAN CE. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD.WE NOTE THAT THE ASSESSING OFFICER DREW ADVERSE INFERE NCE AGAINST THE ASSESSEE COMPANY SINCE THE ASSESSEE COMPANY DURING THE ASSES SMENT PROCEEDINGS DID NOT RESPOND TO SUMMON U/S 131 OF THE ACT. BESIDES, IT W AS BROUGHT TO OUR NOTICE THAT THE ASSESSING OFFICER DID NOT ISSUE NOTICE UNDER SE CTION 133(6) OF THE ACT TO THE SHARE SUBSCRIBING COMPANIES TO EXAMINE THE IDENTITY , GENUINENESS AND CREDITWORTHINESS OF THE SHARE CAPITAL/ PREMIUM, NOR HE OBTAINED CONFIRMATIONSFROM M/S ASCENT COMMERCE PVT. LTD. ITA NO.1695/KOL/2016 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 THESE SHARE SUBSCRIBING COMPANIES. WITHOUT DOING TH E AFORESAID EXERCISES THE ASSESSING OFFICER HAS BRUSHED ASIDE THE DOCUMENTS F ILED BY THE ASSESSEE AND DREW ADVERSE INFERENCE AGAINST THE ASSESSEE ONLY ON THE GROUND THAT DIRECTORS DID NOT APPEAR BEFORE HIM, WHICH ACTION OF ASSESSING OFFICE R IS ERRONEOUS. WE NOTE THAT DURING THE APPELLATE STAGE, THE LD CIT(A) DID NOT S END THE SUBMISSIONS OF THE ASSESSEE FOR VERIFICATION BY ASSESSING OFFICER. THUS, WE NOTE THAT NO PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO DISCHARGE THE ONUS CASTED UPON IT AS REQUIRED IN SECTION 68 M ATTERS. CONSIDERING THESE FACTS AND CIRCUMSTANCES, AS EXPLAINED ABOVE, WE ARE OF TH E VIEW THAT ASSESSEE DID NOT GET PROPER OPPORTUNITY TO REPRESENT ITS CASE AT THE ASS ESSMENT STAGE. HENCE, WE ARE OF THE VIEW THAT ONE MORE OPPORTUNITY SHOULD BE GIVEN TO THE ASSESSEE TO PLEAD HIS CASE BEFORE THE ASSESSING OFFICER. IN THE LIGHT OF THE AFORESAID DISCUSSION, WE FIND F ORCE IN THE SUBMISSION OF THE LD. DRTHAT THE ISSUE MAY BE REMITTED BACK TO THE FILE O F THE ASSESSING OFFICER FOR FRESH ASSESSMENT. FOR TAKING THAT COURSE WE RELY ON THE J UDGMENT OF THE HONBLE (THREE JUDGE BENCH) OF THE HONBLE SUPREME COURT IN TIN BO X COMPANY VS. CIT (2001) 249 ITR 216 (SC) WHEREIN IT WAS HELD AS FOLLOWS: 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 M/S ASCENT COMMERCE PVT. LTD. ITA NO.1695/KOL/2016 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 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. 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. 6. IN VIEW OF THE ABOVE FACTS AND IN THE LIGHT OF T HE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA), WE THINK IT FI T AND PROPER TO REMIT THIS ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER. THEREFOR E, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF ASS ESSING OFFICER FOR DE NOVO ADJUDICATION, AND TO DECIDE THE MATTER IN ACCORDANC E TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 06.09.2019 SD/- ( A.T. VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 06/09/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. ITO, WARD-10(1), KOLKATA 2. M/S ASCENT COMMERCE PVT. LTD. 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES M/S ASCENT COMMERCE PVT. LTD. ITA NO.1695/KOL/2016 ASSESSMENT YEAR:2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5