Jindal Commercial Private Limited, Kolkata V. Office of the CIT(Appeals) -1, Kolkata, Kolkata

ITA 1699/KOL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9435 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2017
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 25-08-2016
• Court: TRIBUNAL
• Department Lawyers: MD GHYAS UDDIN JCIT LD
• Assessee Lawyers: SUNIL SURA NA FCA LD
• Keywords: Search and seizure; Reason to believe
• Section: 142(1); 234B; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,B BENCH,KOLK ATA BEFORE : SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL ME MBER AND SHRI DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA NO. 1699/KOL/2016 A.Y 2006-07 M/S. JINDAL COMMERCIAL PVT. LTD. VS. INCOME TAX OFFICER PAN: AAACJ7290C WARD 3(3), KOLKATA [APPELLANT] [RESPONDENT] APPELLANT BY : SHRI SUNIL SURANA, FCA, LD .AR RESPONDENT BY : MD. GHYAS UDDIN, JCIT , LD.DR DATE OF HEARING : 06-02-2017 DATE OF PRONOUNCEMENT : 06-02-2017 ORDER PER SHRI PARTHA SARATHI CHAUDHURY, JM: THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) IN SHORT [ LD. CIT(A), 1, KOLKATA DATED 15-06-2016 ON THE FOLL OWING GROUNDS:- 1) THAT THE ORDER OF THE LEARNED CIT APPEALS IS ARBITRARY BASED ON MERE SURMISES BAD IN LAW AS WELL AS ON FACTS. 2) THAT THE LEARNED CIT APPEALS IN NOT JUSTIFIED IN CONFIRMING THE ORDER PASSED BY INCOME TAX OFFICER TOWARDS ADDITION OF INVESTMENTS MADE BY ASSESSEE IN M/S. RAMESHWARAM STEEL & POWER LTD AMOUNTING TO RS.5,00,000.00 AS PROTECTIVE INCOME WITHOUT TAKING PROPER REPORT FROM THE ASSESSING OFFICER OF M/S. RAMESHWARAM STEEL & POWER LTD FOR A.Y 2006-07. 3) THE LEARNED CIT APPEALS ERRED IN LEVYING INTERES T U/S. 234B OF THE INCOME TAX ACT, 1961. 4) THE LEARNED CIT APPEALS ERRED IN LEVYING INTERES T U/S. 234C OF THE INCOME TAX ACT, 1961. 5) THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, LD. AO ERRED IN INITIATING PENALTY PROCEEDING S U/S. 271(1)(1)( C) OF THE INCOME TAX ACT, 1961. 6) THAT THE APPLICANT CRAVES THE RIGHT TO ADD TO AM END OR TO ALTER ANY OF THE GROUND OR GROUNDS OF APPEAL BEFORE THE HEARING OF THE APPEAL. ITA NO. 1699/KOL/2016 M/S . JINDAL COMMERCIAL PVT . LTD 2 2. THE BRIEF FACTS APPEARING IN THIS CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E 2006-07 ON 29-11-2006 WITH RETURN ED INCOME DECLARED AS RS.6842/-. THE CASE WAS REOPENED DUE TO THE REASON RECORDED AS APPEARING IN THE ASSESSMENT ORDER DATED 28-03-2014. THEREFORE, IT IS NOT AGAIN REPRODUCED HEREIN THAT O N THE BASIS OF REASONS FOR REOPENING APPROVAL WAS TAKEN FROM THE A PPROPRIATE AUTHORITY FOR REOPENING THE CASE NOTICE U/S. 148 WA S ISSUED AND SERVED ON THE ASSESSEE ON 30-03-2013. NOTICES U/S. 143(2) AND 142(1) OF THE ACT WERE ALSO ISSUED TO THE ASSESSEE ASKING FOR DETAILS. IN RESPONSE TO SAID NOTICE, THE LD.AR OF THE ASSESSEE APPEARED TIME TO TIME TO MAKE VARIOUS SUBMISSIONS, PRODUCE BOOKS OF ACCOUNTS AND TO EXPLAIN THE RETURN. HOWEVE R, THE ASSESSMENT WAS COMPLETED U/S. 147/143(3) OF THE ACT WITH TOTAL ASSESSED INCOME ON PROTECTIVE BASIS AT RS.5,06,842/ -. 3. AT THE TIME OF HEARING BEFORE US THE LD.AR OF T HE ASSESSEE HAS REITERATED THE SUBMISSIONS AS PLACED IN FRONT OF THE AO DURING ASSESSMENT PROCEEDINGS AND CONTENDED THAT TH E REASONS RECORDED FOR REOPENING OF THE ASSESSMENT WERE NOT J USTIFIED IN LAW THAT AS APPEARING IN THE ASSESSMENT ORDER. THE REAS ONS RECORDED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED ON 10.10.2009 IN RAMESWARAM STEEL AND POWER LIMITED ( MONNET GROUP) 1000 SHARES WAS ALLOTTED FOR RS.500000/- BUT FROM THE BALANCE SHEET IT CANNOT BE ASCERTAINED AS TO WHETHE R THE ASSESSEE COMPANY DISCLOSED SUCH INVESTMENT. AS SUCH I HAVE REASON TO BELIEVE THAT INCOME OF RS.500,000/- HAS E SCAPED ASSESSMENT. AT THE TIME OF HEARING BEFORE US HE AL SO ARGUED THAT BALANCE SHEET BEING PREPARED TOWARDS THE END OF THE YEAR NOT AT THE TIME OF INVESTMENT. FURTHER EVEN IN THE RE-ASSE SSMENT THE ADDITIONS WERE MADE ON PROTECTIVE BASIS. ITA NO. 1699/KOL/2016 M/S . JINDAL COMMERCIAL PVT . LTD 3 4. ON THE OTHER HAND, THE LD.DR POINTED OUT TO THE BENCH THAT THE IMPUGNED ORDER OF THE CIT(A) HAS PASSED EX PART E ORDER. THEREFORE, THE MATTER INVOLVED IN THIS APPEAL SHOUL D BE SET ASIDE BACK TO THE FILE OF THE CIT(A). 5. WE HAVE PERUSED THE CASE RECORDS, FACTS AND CIRC UMSTANCES OF THE CASE. WE HAVE HEARD THE RIVAL SUBMISSIONS AN D WE NOTICE THAT BEFORE THE CIT(A) NO ONE WAS PRESENT FOR THE A PPELLANT. THE ORDER OF THE CIT(A) STATES THAT THE CASE WAS INITIA LLY FIXED FOR HEARING ON 18-05-2016 BUT NONE HAD ATTENDED ON THAT DAY. THE CASE WAS AGAIN FIXED FOR HEARING ON 27-05-2016, THE A.R OF THE APPELLANT HAD ATTENDED AND THE CASE WAS ADJOURNED O N 06-06- 2016. AGAIN THE A.R OF THE APPELLANT HAD APPEARED O N 06-06- 2016, BUT ADJOURNED TO 14-06-2016. ON 14-06-2016 NO NE HAD ATTENDED. UNDER THE CIRCUMSTANCES, HE HAD NO OPTION AND DECIDED THE APPEAL ON THE BASIS OF MATERIAL AVAILABLE ON RE CORD AND PASSED AN EX PARTE ORDER. 6. ON CAREFUL CONSIDERATION OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES INVOLVED HEREIN THE PARAMETER AND JUS TICE SHALL APPLY IF THE RIGHTS AND LIABILITIES OF THE ASSESSEE ARE DETERMINED BY THE FIRST APPELLATE AUTHORITY AFTER PROPER REPRE SENTATION BY THE ASSESSEE. WE FIND THAT AT THE FIRST APPELLATE STAGE THERE WAS NO APPEARANCE BY THE ASSESSEE BEFORE THE LD. CIT(A). T HEREFORE, THE RIGHTS AND LIABILITIES WERE NOT DETERMINED BY THE C IT(A) SINCE ORDER PASSED EXPARTE. THE STAND OF THE ASSESSEE WAS NOT PUT FORWARD BEFORE HIM. THEREFORE, THERE WAS NO PROPER ADJUDICATION AS THERE WAS NOT PROPER REPRESENTATION OF ASSESSEE. UNDER THESE CIRCUMSTANCES, WE ARRIVE AT OUR CONSIDERED VIEW FOR PROPER DETERMINATION OF RIGHTS AND LIABILITIES THIS CASE S HOULD BE SET ASIDE BACK TO THE FILE OF THE LD. CIT(A) FOR HIS FR ESH ADJUDICATION AFTER HEARING THE PARTIES. THUS, FINAL OPPORTUNITY IS GRANTED TO ITA NO. 1699/KOL/2016 M/S . JINDAL COMMERCIAL PVT . LTD 4 ASSESSEE TO REPRESENT ITS CASE PROPERLY BEFORE THE CIT-A BY PROPER REPRESENTATION ON THE BASIS OF SUBMISSIONS. THEREAFTER, THE CIT(A) MAY ADJUDICATE THE CASE FRESH ONLY. THEREFOR E, WE SET ASIDE THE ORDER OF THE CIT(A) BACK TO HIS FILE TO A DJUDICATE THE APPEAL AFRESH IN ACCORDANCE WITH LAW AFTER GIVING P ROPER OPPORTUNITY OF HEARING TO BOTH THE PARTIES. WE ORDE R ACCORDINGLY. THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 06-02-2017 SD/- SD/- DR. ARJUN LAL SAINI PARTHA SARATHI CHAUDHURY ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 06-02-2017 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE: M/S. JINDAL COMMERCIAL PRIVATE LIMITED 119A, MOTILAL NEHRU ROAD, 1 ST FLOOR, FLAT-1F, KOLKATA-29. 2 RESPONDENT/DEPARTMENT : INCOME TAX OFFICER, WARD 3 (3), KOLKATA/O/O THE COMMISSIONER OF INCOME TAX (APPEALS )-1, KOLKATA, P-7 CHOWRINGHEE SQUARE, 7 TH FLOOR, KOLKATA-69. 3. CIT, 4. CIT(A), 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS [ TRUE COPY ] BY ORDER, ASSTT REGISTRAR