Lambodar Vyapaar Pvt. Ltd., Kolkata V. ITO,Ward-9(3), Kolkata

ITA 2319/KOL/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 5793 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 21-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: MANISH TIWARI
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside
• Section: 133(6); 201

Judgement Text

ITA NO. 2319/KOL/2019 LAMBODAR VYAPAAR PVT. LTD, A.Y. 2014-15 1 | P A GE , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA [BEFORE SHRI J. SUDHAKAR REDDY, AM AND SHRI A. T. VARKEY, JM] I.T.A. NO. 2319/KOL/2019 ASSESSMENT YEAR: 2014-15 LAMBODAR VYAPAAR PVT. LTD. (PAN: AACCL0766F) VS. INCOME-TAX OFFICER, WD-9(3), KOLKATA APPELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 28.01.2021 DATE OF PRONOUNCEMENT 05.02.2021 FOR THE APPELLANT SHRI MANISH TIWARI, AR FOR THE RESPONDENT SMT. RANU BISWAS, ADDL. CIT ORDER PER SHRI A. T. VARKEY, JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT(A)-15, KOLKATA DATED 25.02.2019 FOR AY 2014-15. 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE A SSESSEE SHRI MANISH TIWARI POINTED OUT THAT THIS IS A CASE WHEREIN THE LD. CIT(A) HAS PASS ED AN EX PARTE ORDER WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE. ACCORDING TO T HE LD. AR, THE NOTICE FIXING THE DATE OF HEARING WAS NOT RECEIVED BY THE ASSESSEE SO, THE LD . AR COULD NOT ATTEND THE HEARING BECAUSE THERE WAS NO INSTRUCTION FROM THE ASSESSEE TO APPEAR FOR HEARING. IT WAS POINTED OUT BY THE LD. AR IT CAME TO HIS KNOWLEDGE THAT THE LD. CIT(A) AFTER FIXING THE HEARING ON 24.12.2018, 23.01.2019 AND 22.02.2019 (THREE HEARIN GS) HAD HASTILY PASSED THE IMPUGNED ORDER ON 25.02.2019 WITHOUT SERVICE OF NOTICE. MOR EOVER, IT WAS BROUGHT TO OUR NOTICE THAT THE AO ALSO HAS SADDLED THE ENTIRE ADDITION AFTER A CKNOWLEDGING THAT IN COMPLIANCE OF HIS NOTICES, SRI DIPAK TIBRIWAL, A/R OF THE ASSESSEE AP PEARED AND SUBMITTED DETAILS CALLED FOR. HOWEVER, IN THE ASSESSMENT ORDER THE AO NOTES THAT THE ASSESSEE COMPANY HAS RAISED SHARE ITA NO. 2319/KOL/2019 LAMBODAR VYAPAAR PVT. LTD, A.Y. 2014-15 2 | P A GE CAPITAL OF RS.5,15,750/- ALONG WITH HUGE SECURITIES PREMIUM FROM FOURTEEN (14) SUBSCRIBERS AND ACCORDING TO HIM, LETTERS HAD BEEN ISSUED TO TH E SUBSCRIBERS FOR THE PURPOSE OF VERIFICATION OF SOURCE OF THEIR INVESTMENT U/S. 133 (6) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). HOWEVER, ACC ORDING TO HIM, OUT OF THE FOURTEEN (14) SUBSCRIBERS EIGHT (8) NOTICES WERE RETURNED BY POST AL AUTHORITY WITH REMARKS NOT KNOWN. ACCORDING TO AO, THE SIX (6) SUBSCRIBERS TO WHOM TH E NOTICES WERE SERVED NEITHER REPLIED NOR THE REST COULD BE SERVED THE NOTICES. SO, THE AO MADE THE ENTIRE ADDITION OF SHARE CAPITAL AND THE SHARE PREMIUM. ACCORDING TO LD. AR , ALL THE SHARE SUBSCRIBERS IN FACT REPLIED TO THE NOTICES WHICH WERE RECEIVED BY THE A O DAY AFTER HE PASSED THE ASSESSMENT ORDER I.E. ON 22.12.2016 . ACCORDING TO LD. AR, TH E NOTICES U/S. 133(6) OF THE ACT WAS ISSUED AT THE FAG END AND BY THE TIME THEY ALL REPL IED TO THE AO, THE AO HAD HASTILY COMPLETED THE ASSESSMENT EVEN THOUGH THERE WAS TIME UPTO 31.12.2016 AND THERE WAS NO NEED TO AO TO FRAME ASSESSMENT ON 21.12.2016 AND W HEN THE FACT WAS THAT ALL REPLIES FROM SHARE SUBSCRIBERS REACHED AO ON 22/23 DECEMBER, 201 6. SO, ACCORDING TO LD. AR, THERE IS PER-SE VIOLATION OF NATURAL JUSTICE AND PLEADED THA T SINCE THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO, THE MATTER MAY BE RESTOR ED BACK TO AO FOR FRESH ASSESSMENT. THE LD. DR ON THE OTHER HAND, SUPPORTED THE ORDER O F AO AND SUBMITTED THAT SECOND OPPORTUNITY SHOULD NOT BE GIVEN TO ASSESSEE BEFORE THE AO. 3. HAVING HEARD BOTH SIDES, WE NOTE THAT HE LD. CIT (A) HAS PASSED AN EX PARTE ORDER AFTER FIXING THE APPEAL ON THREE OCCASIONS. HOWEVE R, THE ASSESSEES CASE IS THAT IT DID NOT RECEIVE THE NOTICE OF HEARING. IT IS NOTED THAT TH E LD. CIT(A) HAS NOT SAID ANYTHING REGARDING SERVICE OF NOTICE/MODE OF SERVICE, WHETHE R IT WAS SERVED OR IT HAS RETURNED ETC. SO, THE IMPUGNED ORDER OF LD. CIT(A) IS BAD SINCE L D. CIT(A) IS DUTY BOUND TO DECIDE THE APPEAL IN ACCORDANCE TO SECTION 250(6) OF THE ACT. SO, WE DO NOT COUNTENANCE THE ACTION OF LD. CIT(A) TO HAVE DISMISSED THE APPEAL EX PARTE AN D NOT ON MERITS, WHICH ACCORDING TO US IS PER-SE IN VIOLATION OF NATURAL JUSTICE AND WITHO UT GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. FURTHER, TAKING NOTE OF THE AFORESAI D FACTS NARRATED BY LD AR BEFORE THE AO DURING ASSESSMENT PROCEEDINGS, IT WAS POINTED OUT B Y THE LD. AR THAT THE AO DID NOT GIVE SUFFICIENT TIME FOR THE SHARE SUBSCRIBERS TO RESPON D TO THE NOTICES SENT U/S. 133(6) OF THE ACT ITA NO. 2319/KOL/2019 LAMBODAR VYAPAAR PVT. LTD, A.Y. 2014-15 3 | P A GE AND EVEN THOUGH THERE WAS ENOUGH TIME I.E, MORE THA N 10 (TEN) DAYS TO COMPLETE THE ASSESSMENT, THE AO INSTEAD HAS PASSED THE ORDER HUR RIEDLY ON 21.12.2015; AND THE FACT ACCORDING TO LD AR WAS THAT COMPLIANCE WERE MADE FR OM THE PART OF THE SHARE SUBSCRIBERS DIRECTLY TO THE AO ON 22/23 RD DECEMBER, 2016. THEREFORE, ACCORDING TO THE LD. A R, PROPER OPPORTUNITY WAS NOT GRANTED TO THE ASSESSEE AND THE ASSESSEE WAS NOT PUT TO NOTICE ABOUT THE NON-COMPLIANCE ON THE PART OF CERTAIN SHARE SUBSCRI BERS, THEREFORE, RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC), HE PRAYED THAT THE MATTER MAY BE REMANDED BACK TO THE AO. WE NOTE THAT THE AO HAS ACKNOWLEDGED TO HAVE SERVED NOTICES ON SIX (6) SHAR E SUBSCRIBERS OUT OF ELEVEN (11) AND THE ASSESSEE WAS NOT PUT TO NOTICE REGARDING THE NON-SE RVICE OF NOTICE TO EIGHT (8) PARTIES. HOWEVER, IT HAS BEEN BROUGHT TO OUR NOTICE THAT ALL THE SHARE SUBSCRIBERS HAD IN FACT REPLIED WITH ALL THE DETAILS AND SUPPORTING DOCUMENTS TO TH E ASSESSEE PURSUANT TO SEC. 133(6) NOTICE. HOWEVER, THE REPLIES FROM SHARE SUBSCRIBERS WERE LA TE BY ONE (1) DAY (BEFORE THE ASSESSMENT WAS FRAMED ON 21.12.2016). THEREFORE, W E FIND THAT IN THIS CASE THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO, THERE FORE, WE RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TIN BOX COMPAN Y (SUPRA) WHEREIN THE HONBLE SUPREME COURT HAS HELD AS UNDER: 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 AUTHO RITY 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 .(EMPHASIS GIVEN BY US) 5. SO, RELYING ON THE AFORESAID DECISION OF THE HON BLE SUPREME COURT SINCE THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMENT IN ACCORDANCE TO LAW. NEEDLESS TO SAY, ASSESSEE SHOULD BE GIVEN PROPER OPPORTUNITY OF BEING HEARD AND THE ASSESSEE IS DIRECTED TO BE DILIGENT AND IS AT L IBERTY TO FILE/PRODUCE DOCUMENTS BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS ; AND IF ADVIS ED TO FILE WRITTEN SUBMISSIONS BEFORE THE AO. ITA NO. 2319/KOL/2019 LAMBODAR VYAPAAR PVT. LTD, A.Y. 2014-15 4 | P A GE 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER IS PRONOUNCED IN THE OPEN COURT ON 5 TH FEBRUARY, 2021. SD/- SD/- (J.S. REDDY) (A. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 05.02.2021 JD, SR. PS COPY OF THE ORDER FORWARDED TO: 1. APPELLANT- LAMBODAR VYAPAAR PVT. LTD., 8, AMARTALLA STREET, 4 TH FLOOR, KOLKATA-700 001. 2. RESPONDENT ITO, WARD-9(3), KOLKATA. 3. THE CIT(A)-15, KOLKATA(SENT THROUGH E-MAIL) 4. CIT- , KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA (SENT THROUGH E-MAIL) TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES, KOLKATA