ACIT, CIR-3, ASANSOL, Asansol V. Sri Pravin Kr. Hetamsaria,

ITA 262/KOL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1706 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: K M ROY; P S PAUL
• Keywords: Principle of natural justice
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH KOLKATA BEFORE SHRI N.V. VASUDEVAN, JM &DR. A.L.SAINI, AM ./ITA NO.262/KOL/2015 ( / ASSESSMENT YEAR: 2010-11) ACIT, CIR-3, ASANSOL PARMAR BUILDING, 54, G.T. ROAD (WEST), ASANSOL 713304. VS. SRI PRAVIN KUMAR HETAMSARIA C/O PRATIK AUTOMOBILES, OLD HAZARIBAGH ROAD, PATEL CHOWK, RANCHI 8340001. ./ ./PAN/GIR NO. : AAYPH 0545 F (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI ARINDAM BHATTACHARJEE, ADDL. CIT RESPONDENT BY :SHRI K.M ROY, FCA & P.S. PAUL, FCA / DATE OF HEARING : 23/11/2017 /DATE OF PRONOUNCEMENT : 07/02/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, PERTAINING TO ASSESSMENT YEAR 2010-11, IS DIRECTED AGAINST AN ORDER PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS), ASANSOL, IN APPEAL NO.122/C.I.T.(A)/ASL/CIR-3/13-14, DATED 29.01.2015, WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), DATED 20.03.2013. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS FOLLOWS: I) THAT THE LD. COMMISSIONER OF INCOME TAX(A), ASANSOL HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.1,20,85,226/- MADE BY THE A.O. ON ACCOUNT OF UNVERIFIABLE CREDITORS/ADVANCES FROM CUSTOMERS SHOWN AS LIABILITIES. 3. THE BRIEF FACTS APROPOS THIS ISSUE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 01.10.2010, DISCLOSING TOTAL INCOME AT RS.24,85,430/-. THE ASSESSEES CASE WAS PROCESSED U/S 143(1) OF THE ACT, ON 03.05.2011 ACCEPTING THE RETURNED INCOME. LATER, THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY U/S 143(2) OF THE ACT AND THE AO SRI PRAVIN KUMAR HETAMSARIA ITA NO.262/KOL/2015 ASSESSMENT YEAR: 2010-11 PAGE | 2 HAS COMPLETED THE ASSESSMENT U/S 143(3) BY MAKING AN ADDITION OF RS.1,20,85,226 (RS.1,22,18,226 RS.1,33,000/-) U/S 41(1) OF THE I.T. ACT. IN THE BALANCE SHEET OF ASSESSEE THERE WAS AN ENTRY OF RS.1,22,18,226/- BEING ADVANCE FROM CUSTOMERS. THE AO SOUGHT DETAILS OF THE TRANSACTION AND THE ASSESSEE FURNISHED THE SAME BUT THAT WAS NOT IN THE FORMAT AS REQUIRED BY THE AO. BASED ON INFORMATION RECEIVED, THE AO ISSUED NOTICES U/S 133(6) OF THE ACT TO THE VARIOUS CUSTOMERS. NOTICES WERE SERVED ONSOME CUSTOMERS AND SOME CUSTOMERS FURNISHED THE REPLY WHICH WAS IN VARIANCE WITH THE FIGURES FURNISHED BY THE ASSESSEE. IN THE ASSESSMENT ORDER, THE AO NARRATED 59 CASES IN PAGE 2 AND PAGE 3 AND THE ASSESSEE COULD NOT EXPLAIN THE CREDITORS HENCE, HE PROCEEDED TO MAKE ADDITION U/S 41(1) OF THE I.T. ACT, 1961.THEREFORE, NOT BEING SATISFIED WITH THE EXPLANATION OFFERED BY THE ASSESSEE, THE AO MADE ADDITION OF RS.1,20,85,226/-. 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE AO. THE LD. CIT(A), (VIDE PAGE 3 PARA 8 OF THE ORDER), STATED THAT ASSESSEE SUBMITTED AN EXTENSIVE LIST OF PAPERS, COVERING 480 PERSONS DEMONSTRATING HOW THE FIGURE OF RS.1,22,18,226/- WAS ARRIVED AT AND ADDRESSES HAS BEEN FURNISHED IN ABOUT 145 CASES. THIS WAS SENT TO AO, WITH WRITTEN EXPLANATION ON THE MATTER FOR COMMENTS. THIS WAY, THE LD. CIT(A) SENT THE MATTER TO THE AO TO TAKE THE REMAND REPORT ON THE ISSUE INVOLVED. IN PARA 8 OF THE ORDER OF THE LD.CIT(A), THE LD. CIT(A) HIMSELF STATED THAT NO COMMENTS WAS RECEIVED FROM THE AO. THE LD. CIT(A) STATED, ON PAGE 7 PARA 10 OF HIS ORDER, THAT IN THIS CASE, ASSESSEE HAD GIVEN A CLARIFICATION OF SUNDRY CREDITORS ON SIX COUNTS. THE AO WAS PROVIDED WITH ALL DETAILS (OF COURSE ADDRESS OF ALL SUNDRY CREDITORS WERE NOT GIVEN) AS TO HOW THE SUNDRY CREDITORS HAS DEVELOPED. THE LD. CIT(A) HELD THAT SECTION 41(1) WAS NOT APPLICABLE AND HENCE OPENING BALANCE OF RS.17,25,173/- CANNOT BE CONSIDERED AS INCOME FOR THE YEAR FOR WHICH REMISSION IS TO BE ESTABLISHED. THE EXPLANATION IN REGARD TO REFUND AND SALE IN SUBSEQUENT YEAR IS ACCEPTED AS IT HAS LOGIC AND RATIONALE AND NOT A SINGLE CASE, THE AO HAS ESTABLISHED TO BE INCORRECT. THE SET OFF OF DEBIT AND CREDIT ENTRIES WERE VISIBLE FROM BOOKS OF ACCOUNTS AND BOOKS OF SRI PRAVIN KUMAR HETAMSARIA ITA NO.262/KOL/2015 ASSESSMENT YEAR: 2010-11 PAGE | 3 ACCOUNTS WERE NOT FOUND TO BE DEFECTIVE. THIS WAY, THE LD. CIT(A) HELD THAT THE ADDITION MADE BY THE AO U/S 41(1) WAS WRONG. THE LD. CIT(A) ALSO HELD THAT ON INDEPENDENT ANALYSIS [POWER OF CIT(A)) IS CO-TERMINUS WITH THAT OF AO], HE COULD NOT FIND ANY MATERIAL EVIDENCE TO SHOW THAT CREDITS WERE BOGUS. THEREFORE, HE DIRECTED THE AO TO DELETE THE ADDITION OF RS.1,20,85,226/-. 5. NOT BEING SATISFIED WITH THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. AT THE OUTSET, THE LD. DR FOR THE REVENUE HAS POINTED OUT THAT LD. CIT(A) DID NOT WAIT FOR REMAND REPORT AND WITHOUT EXAMINING REMAND REPORT, HE PASSED THE ORDER. THEREFORE, ORDER PASSED BY THE LD. CIT(A) IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. HENCE, THE LD. DR FOR THE REVENUE PRAYED THE BENCH THAT THE SAID MATTER SHOULD GO BACK TO THE FILE OF THE AO TO EXAMINE THE ISSUE AFRESH. 6. THE LD. DR FOR THE REVENUE HAS ALSO POINTED OUT THAT ON PAGE 3, IN PARA 8 OF THE ORDER OF THE LD. CIT(A), WHEREIN HE HELD THAT THE APPELLANT SUBMITTED AN EXTENSIVE LIST COVERING 480 PERSONS DEMONSTRATING HOW THE FIGURE OF RS.1,22,18,226/- WAS ARRIVED AT.ADDRESS HAS BEEN FURNISHED IN ABOUT 145 CASES. THIS WAS SENT TO AO AND WITH WRITTEN EXPLANATION ON THE MATTER FOR COMMENTS AND NO COMMENTS (ALREADY PROVIDED DURING ASSESSMENT STAGE, ACCORDING TO AUTHORIZED REPRESENTATIVE) WAS RECEIVED. THEREFORE, THE LD.CIT(A) HAS SENT THE MATTER TO THE AO TO OBTAIN THE REMAND REPORT ON THE ISSUE BUT HE DID NOT WAIT FOR THE REMAND REPORT AND ADJUDICATED THE ISSUE WITHOUT TAKING THE REMAND REPORT WHICH IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. THE LD. DR ALSO STATED THAT ON PAGE 7, IN PARA 11 OF THE ORDER OF LD. CIT(A), WHEREIN HE STATED THAT LD. CIT(A) HAS CO-TERMINUS POWERS WITH THAT OF AO AND, THEREFORE, HE CONCLUDED THE ISSUE AS PER HIS INDEPENDENT ANALYSIS WITHOUT WAITING FOR THE REMAND REPORT.IF THE AO DID NOT SEND THE REMAND REPORT TIMELY,THEN,LD.CIT(A) SHOULD WAIT FOR THE REMAND REPORT OR HE SHOULD REMIND THE AO TO SEND THE REMAND REPORT BUT THE LD. CIT(A) HAS NOT DONE SO IN THE ASSESSEES CASE UNDER CONSIDERATION. SRI PRAVIN KUMAR HETAMSARIA ITA NO.262/KOL/2015 ASSESSMENT YEAR: 2010-11 PAGE | 4 7. THE LD. COUNSEL FOR THE ASSESSEE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE LD. CIT(A), WHICH WE HAVE ALREADY NARRATED IN OUR ABOVE PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 8. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT LD.CIT(A) HAD SENT THE MATTER TO AO FOR TAKING THE REMAND REPORT BUT HE DID NOT WAIT FOR THE REMAND REPORT AND ADJUDICATE THE ISSUE WITHOUT TAKING INTO ACCOUNT THE REMAND REPORT. NO DOUBT, THE CIT(A) HAS CO-TERMINUS POWER WITH THAT OF AO BUT WHEN THE REMAND REPORT HAS BEEN SENT TO THE AO, THEN, THE LD. CIT(A) IS DUTY BOUND TO WAIT FOR THE REMAND REPORT. IF THE AO DID NOT SEND THE REMAND REPORT TIMELY, THEN, IT IS THE DUTY OF THE LD. CIT(A) TO REMIND THE AO TO SEND THE REMAND REPORT. IN THE ASSESSEE`S CASE UNDER CONSIDERATION, WE NOTE THAT, LD CIT(A) HAS NEITHER WAITED FOR REMAND REPORT NOR HE SENT REMINDER TO ASSESSING OFFICER TO SEND HIM REMAND REPORT, THEREFORE, IT IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. THEREFORE, WE ARE OF THE VIEW THAT THIS ISSUE IS REQUIRED A FRESH EXAMINATION AT THE END OF THE ASSESSING OFFICER, HENCE WE SET ASIDE THE ORDER OF CIT(A), AND PROPOSE TO REMIT THE ISSUE TO THE FILE OF THE ASSESSING OFFICER, TO EXAMINE THE ISSUE AFRESH AND ADJUDICATE THE ISSUE AS PER PROVISIONS OF LAW. 9.IN THE RESULT, THE APPEAL FILED BY THE REVENUE, IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 07/02/2018. SD/- (N.V. VASUDEVAN) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 07/02/2018 [ RS SPS] SRI PRAVIN KUMAR HETAMSARIA ITA NO.262/KOL/2015 ASSESSMENT YEAR: 2010-11 PAGE | 5 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . . 1. / THE APPELLANT ACIT, CIR-3, ASANSOL 2. / THE RESPONDENT-SRI PRAVIN KUMAR HETAMSARIA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.