M/s. Mangalshree Sales Ltd., , Kolkata V. ITO, Ward - 9(1), , Kolkata

ITA 2095/KOL/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0684 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 05-10-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAUL
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 133(6); 131; 68

Judgement Text

ITA NO.2095/KOL/2018 MANGALSHREE SALES LTD., AY: 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT (KZ) & SHR I A. T. VARKEY, JM] I.T.A. NO. 2095/KOL/2018 ASSESSMENT YEAR: 2012-13 M/S. MANGALSHREE SALES LTD. (PAN: AACHM3535A) VS. INCOME-TAX OFFICER, WARD-9(1), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 08.11.2019 DATE OF PRONOUNCEMENT 20.12.2019 FOR THE APPELLANT SHRI MIRAJ D. SHAH, AR FOR THE RESPONDENT SHRI SUPRIYO PAUL, JCIT ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) 18, KOLKATA DATED 10.01.2018 FOR AY 2012-13. 2. THOUGH THE ASSESSEE HAS RAISED AS MANY AS SIX GR OUNDS OF APPEAL BUT THE SUBSTANTIVE ISSUE IS AGAINST THE ACTION OF LD. CIT(A) IN CONFIR MING THE SUM OF RS.24,10,50,000/- BY TREATING IT AS UNEXPLAINED CASH CREDIT ON ACCOUNT O F SHARE CAPITAL U/S. 68 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WI THOUT AFFORDING PROPER AND MEANINGFUL OPPORTUNITY OF BEING HEARD TO THE ASSESSEE WHICH AC CORDING TO ASSESSEE IS IN GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 3. AFTER HEARING BOTH THE SIDES WE NOTE THAT THE LD . CIT(A) HAS PASSED THE IMPUGNED ORDER EX PARTE THOUGH THE LD. CIT(A) HAS RECORDED T HAT HE HAS SENT THE NOTICE ON 02.01.2018. HOWEVER, FROM A PERUSAL OF THE CAUSE TITLE OF THE I MPUGNED ORDER SHOWS THAT DATE OF HEARING HAS BEEN MENTIONED AS 15.12.2017 AND 02.01.2018. IN SUCH CIRCUMSTANCES, THE LD. AR WONDERED AS TO HOW THE LD. CIT(A) STATES THAT THE N OTICE WAS ISSUED ON 02.01.2018 WHEN 2 ITA NO. 320/KOL/2018 JHA EDUCATIONAL TRUST, AY: 2009-10 THE HEARING WAS FIXED ON 02.01.2018 AND HAS PASSED THE IMPUGNED ORDER ON 10.01.2018 WHICH SHOWS THAT PER SE THERE WAS NO EFFECTIVE HEAR ING BEFORE THE LD. CIT(A). WE NOTE THAT LD. CIT(A) HAS MENTIONED TWO DATES OF HEARING I.E. ON 15.12.2017 AND 02.01.2018 AND HAS STATED THAT NOTICE WAS ISSUED ON 02.01.2018. H OWEVER, THE LD. CIT(A) FAILED TO MENTION WHEN WAS THE LAST DATE OF HEARING FIXED FOR THE APP EAL TO BE HEARD BY THE LD. CIT(A). SINCE THE LD. CIT(A) HAS NOT SPELLED OUT THE LAST DATE OF HEARING BEFORE HIM, WHICH CANNOT OBVIOUSLY BE 02.01.2018, SINCE IT HAS BEEN RECORDED BY LD. CIT(A) THAT NOTICE WAS ISSUED ON 02.01.2018. SO, WITHOUT MENTIONING THE LAST DAT E OF HEARING THE LD. CIT(A) ERRED IN FINDING THAT NO ONE ATTENDED IN RESPONSE TO THE NOTICES . SO, WE FIND FORCE IN THE CONTENTION OF THE LD. AR ON THIS SCORE. MOREOVER, IT WAS BROUGHT TO OUR NOTICE THAT THE AO HAD ISSUED NOTICE U/S. 133(6) OF THE ACT TO THE SHA RE SUBSCRIBERS WHICH WERE PROPERLY COMPLIED WITH BY THE RESPECTIVE SHARE SUBSCRIBERS. HOWEVER, SINCE SUMMONS U/S. 131 COULD NOT BE COMPLIED WITH, THE AO HAS MADE THE ADDITION. THE LD. AR SUBMITTED THAT AT THAT PARTICULAR POINT OF TIME SINCE THE DIRECTOR WAS NOT PRESENT IN STATION, THEY COULD NOT APPEAR BEFORE THE AO. GIVEN A CHANCE, THE LD. AR UNDERTAK ES TO PRODUCE THE DIRECTOR BEFORE THE AO. ACCORDING TO THE LD. COUNSEL SINCE NO PROPER OPPORTUNITY THE ASSESSEE GOT AT THE ASSESSMENT STAGE AND ALSO AT THE APPELLATE STAGE HE RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC) THE LD. AR PLEADED THAT THE ISSUE TO BE REMANDED BACK TO AO FOR FRESH/ DE NOVO ASSESSMENT. WE NOTE FROM THE AFORESAID DISCUSSION IT IS DISCERNED THAT NO PROPER OPPORTUNITY WAS GIVEN TO THE ASSESSEE AT THE ASSESSMENT STAGE ALSO. WE NOTE THAT IN THE CASE OF TIN BOX (SUPRA) THE HONBLE SUPREME COURT HELD AS UNDER: IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THESE MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF THE TRIBUNAL, THE FACT-FINDING AUTHORITY, THAT READS THUS: WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CONSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MADE AFTER THE ASSESSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE W ITH THE TRIBUNAL AND THE HIGH COURT THAT IT WAS NOT NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESSMENT AFTER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD. 3 ITA NO. 320/KOL/2018 JHA EDUCATIONAL TRUST, AY: 2009-10 TWO QUESTIONS WERE PLACED BEFORE THE HIGH COURT, OF WHICH THE SECOND QUESTION IS NOT PRESSED. THE FIRST QUESTION READS THUS: 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING ASIDE THE ASSESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME-TAX OFFICER HAD NOT GIVEN A PROPER OPPORTUNI TY 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 AND IN FAVOUR OF T HE ASSESSEE. THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS) AND OF THE TRIBU NAL ARE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FO R FRESH CONSIDERATION, AS AFORESTATED. 4. RESPECTFULLY, TAKING NOTE OF THE AFORESAID DECIS ION OF HONBLE SUPREME COURT AND THE FACT THAT THE ASSESSEE DID NOT RECEIVE PROPER OPPOR TUNITY BEFORE THE AO AT THE ASSESSMENT STAGE AS ALSO IN THE APPELLATE STAGE, WE ARE INCLIN ED TO SET ASIDE THE ORDER OF THE LD.CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMENT. THE ASSESSEE IS DIRECTED TO PRODUCE THE DIRECTORS AS UNDERTAKEN BEF ORE US. THE AO IS DIRECTED TO PASS THE DE NOVO ASSESSMENT AFTER HEARING THE ASSESSEE IN ACCORDANC E WITH LAW. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20TH DE CEMBER, 2019 SD/- SD/- (P.M. JAGTAP) (ABY. T. VARKEY) VICE-PRESIDENT JUDICIAL MEMBER DATED : 20TH DECEMBER, 2019 JD. (SR. P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. MANGALSHREE SALES LTD., 161/1, M. G. ROAD, 2 ND FLOOR, ROOM NO. 40, KOLKATA-700007. 2 RESPONDENT ITO, WARD-9(1), KOLKATA. 3. THE CIT(A) - 18, KOLKATA. (SENT THROUGH E-MAIL) 4. 5. CIT KOLKATA DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR ITAT, KOLKATA