M/s Varun Sales Pvt. Ltd., Kolkata V. I.T.O.Ward-11(3), Kolkata

ITA 2355/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5191 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 25-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Assessee Lawyers: LATA GOYAL ACA
• Keywords: TDS; Set aside
• Section: 142(1); 201; 44AB; 148; 144

Judgement Text

1 ITA NO. 2355/KOL/2019 VARUN SALES PVT. LTD, AY- 201 0-11 , B(SMC) , IN THE INCOME TAX APPELLATE TRIBUNAL B(SMC) BENCH : KOLKATA ( ) . . , ) [BEFORE SHRI A. T. VARKEY, JM] ITA NO.2355/KOL/2019 ASSESSMENT YEAR: 2010-11 M/S. VARUN SALES PVT. LTD. (PAN: AAACV8820E) VS. INCOME TAX OFFICER, WD-11(3), KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 22.01.2020 DATE OF PRONOUNCEMENT 19.02.2020 FOR THE APPELLANT SMT. LATA GOYAL, ACA FOR THE RESPONDENT SHRI JAYANTA KHANRA, JCIT, SR. D R ORDER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-17, KOLKATA DATED 04-06-2019 FOR THE ASSESSMENT YEAR 2010-11. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS AGAINST TH E ACTION OF THE LD. CIT(A) IN CONFIRMING THE ADDITION MADE BY THE AO OF RS.6,26,4 67/-. 3. BRIEF FACTS OF THE CASE AS NOTED BY THE AO ARE T HAT THE ASSESSEE DID NOT FILE ITS RETURN OF INCOME FOR THE AY 2010-11. IN VIEW OF THIS FACT NOTICE U/S. 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WAS ISS UED AND AFTER SERVING OF STATUTORY NOTICES THE AO NOTED THAT THE ASSESSEE COMPANY MAINTAINED I TS BANK ACCOUNT WITH HDFC BANK, STEFEN HOUSE BRANCH, KOLKATA. ACCORDING TO AO, ASS ESSEE RECEIVED AN AMOUNT OF RS.78,30,841/- . THE AO NOTED THAT THE ASSESSEE HA D RECEIVED ALL THE AMOUNT FROM VARIOUS INDIVIDUAL PERSONS AND VARIOUS COMPANIES THROUGH CH EQUES ON DIFFERENT DATES. ACCORDING TO AO, THE ASSESSEE SHOULD HAVE MAINTAINED ITS BOOKS O F ACCOUNT U/S. 44AA OF THE ACT AND SHOULD HAVE GOT IT AUDITED U/S. 44AB OF THE ACT. T HEREAFTER, THE AO STATES THAT HE HAD ISSUED NOTICE DATED 28.01.2015 TO THE ASSESSEE COMP ANY CALLING FOR EXPLANATION AS TO WHY THE ASSESSMENT SHOULD NOT BE MADE U/S. 144 OF THE A CT. ACCORDING TO AO, THERE WAS NO RESPONSE ON THE PART OF THE ASSESSEE COMPANY, THERE FORE, HE RESORTED TO SECTION 144( BEST JUDGMENT ASSESSMENT) AND ADDED 8% OF THE GROSS RECE IPT OF RS.78,30,841/- WHICH COMES TO 2 ITA NO. 2355/KOL/2019 VARUN SALES PVT. LTD, AY- 201 0-11 RS.6,26,467/- AS THE TOTAL INCOME OF THE ASSESSEE. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE SAME. A GGRIEVED, ASSESSEE IS BEFORE THIS TRIBUNAL. 4. I HAVE HEARD BOTH THE SIDES AND HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. IT HAS BEEN BROUGHT TO MY NOTICE THAT IN THE RE-ASSESSMENT PROCEEDINGS, PURSUANT TO THE AO ISSUING NOTICE U/S. 142(1) OF THE ACT THE ASSESSEE HAD PROM PTLY FILED DETAILED REPLY TO THE AO VIDE LETTER DATED 12.03.2015 AND THE LD. AR DREW OUR ATT ENTION TO PAGE 5 OF THE PAPER BOOK WHICH SHOWS THAT THE ASSESSEE HAD REPLIED TO THE IT O, WARD-11(3) PURSUANT TO HIS NOTICE U/S. 142(1) WHEREIN THE FOLLOWING DETAILS WERE FILED: 1. THE NATURE OF BUSINESS AS CONDUCTED BY THE COMP ANY IS MENTIONED IN ITS MEMORANDUM AND ARTICLE OF ASSOCIATION WHICH IS ANNEXED HEREWITH AN D MARKED AS A-1. THE COMPANY HAD BEEN THE SUPPLIER OF CATTLE FEED TO THE WB DIARY AN D POULTRY DEVELOPMENT CORPORATION (ANIMAL HUSBANDRY), A GOVT. UNDERTAKING AGAINST TE NDER 2. AT PRESENT, THE INCOME TAX RETURN FOR THE AY 201 0-11 IS NOT AVAILABLE WITH US. 3. DETAILS OF DIRECTORS IS ANNEXED HEREWITH AND MAR KED AS A-2. 4. THE MOA AND AOA IS ALREADY ENCLOSED IN A-1. 5. THE AUDITED BALANCE SHEET IS BEING ENCLOSED FOR YOUR KIND PERUSAL AND RECORD AND MARKED AS A-3. 6. THE BANK STATEMENT DEPICTING DETAILS OF TRANSACT IONS IS ANNEXED HEREWITH AND MARKED AS A-4. 7. CASH BOOK, LEDGER, BILLS OF TRANSACTIONS CAN BE PRODUCED AT THE TIME OF HEARING. 8. DETAILS OF DIRECTORS ARE ALREADY ANNEXED IN A-2 . 9. NO INVESTMENT IS MADE BY THE COMPANY DURING THE FINANCIAL YEAR. 10. AT PRESENT, THE DETAILS OF TDS ARE NOT AVAILABL E. 11. THERE IS NO OTHER INCOME. 12. AS NO RETURN FOR AY 2010-11 COULD BE FILED DUE TO INADVERTENCE. HENCE COMPUTATION COULD NOT BE FILED. HOWEVER THE COMPANY HAD INCURRED LOS S DURING THE SAID ASSESSMENT YEAR. 5. I ALSO NOTE THAT THE ASSESSEE HAD FILED THE AUDI TED FINANCIAL STATEMENT WHICH IS PLACED AT PAGES 6 TO 17 OF THE PAPER BOOK. IT IS NOTED TH AT SINCE THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME AND THE ASSESSEE DID NOT REPLY TO THE NOT ICE OF THE AO, THE AO HAD MADE THE GP ADDITION. REGARDING NON-FILING THE ROI, THE ASSESS EE HAD SUBMITTED THAT THE ACCOUNTANT OF THE ASSESSEE SHRI B. P. MISHRA EXPIRED ON 24.12.201 2 AND THE DIRECTORS WIFE SMT. SOVA KANORIA WAS ALSO SUFFERING FROM VARIOUS AILMENTS AN D SHE WAS ADMITTED IN M/S. VISION CARE HOSPITAL, MUKUNDAPUR, KOLKATA AND SINCE THE COMPAN Y INCURRED LOSS IN THIS YEAR, THE DIRECTOR WAS OF THE BONA FIDE BELIEF THAT NO RETURN NEED TO BE FILED. HOWEVER, WHEN THE ASSESSEE RECEIVED NOTICE U/S. 142(1) OF THE ACT HE HAD FILED THE REPLY ALONG WITH AUDITED P&L ACCOUNT AND BALANCE SHEET AND ALSO OTHER INFORM ATION WHICH IS SHOWN (SUPRA). EVEN THOUGH IT IS NOTED THAT THE ASSESSEE HAD FILED THE AFORESAID DETAILS STILL THE AO HAS STATED THAT THERE WAS NO REPLY FROM ASSESSEE FOR HIS SHOW CAUSE NOTICE U/S. 144 OF THE ACT. SO, HE MADE 3 ITA NO. 2355/KOL/2019 VARUN SALES PVT. LTD, AY- 201 0-11 THE BEST JUDGMENT ASSESSMENT. ON APPEAL, THE LD. C IT(A) HAS NOT GIVEN ANY OTHER REASON TO CONFIRM THE ORDER OF AO. IN SUCH A SCENARIO, IT IS NOTED THAT THE AO HAS NOT BEEN FAIR WHILE FRAMING THE ASSESSMENT. IT HAS TO BE KEPT IN MIND THAT THE AO HAS DUAL ROLE OF AN INVESTIGATOR AS WELL AS AN ADJUDICATOR. AS AN ADJU DICATOR HE HAS TO BE REASONABLE AND FAIR TO THE ASSESSEE WHILE FRAMING ASSESSMENT. IN THIS CAS E THOUGH THE ASSESSEE HAD REPLIED TO THE NOTICE U/S. 142(1) OF THE ACT THOUGH BELATEDLY, THE AO HAS BRUSHED IT ASIDE/IGNORED IT AND HAD PROCEEDED TO ESTIMATE THE INCOME BY RESORTING T O BEST JUDGMENT ASSESSMENT WHICH CANNOT BE COUNTENANCED. THUS, THIS IS A CASE WHERE, ACCORDING TO ME, NO PROPER OPPORTUNITY HAS BEEN GIVEN TO THE ASSESSEE DURING THE ASSESSMEN T STAGE. IN SUCH A SCENARIO, RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN TIN BO X COMPANY VS. CIT (2001) 249 ITR 216 (SC), I AM INCLINED TO SET ASIDE THE IMPUGNED O RDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMEN T IN ACCORDANCE TO LAW AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS DIRECTED TO DILIGENTLY TAKE PART IN THE ASSESSMENT PROCEEDING AND FURNISH DOCUM ENTS BEFORE THE AO AND THE AO TO FRAME ASSESSMENT AS PER LAW. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19TH FEBRU ARY, 2020. SD/- (ABY. T. VARKEY) JUDICIAL MEMBER DATED :19TH FEBRUARY, 2020 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. VARUN SALES PVT. LTD., 3, MIDDL E ROAD, HASTINGS, KANORIA HOUSE, KOLKATA-700 022. 2 RESPONDENT ITO, WARD-11(3), KOLKATA. 3. 4. 5. CIT(A)-17, KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) BY ORDER, / TRUE COPY, ASSISTANT REGISTRAR