Asva Power Systems India (P) Ltd., Kolkata V. I.T.O.,Ward-10(1), Kolkata

ITA 327/KOL/2019

• Counselvise Citation: [2022] 103 COUNSELVISE.COM (IT) 8502 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 13-11-2022
• Assessment Year: misc
• Appeal Filed On: 21-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: ALLOTTING
• Keywords: Additional evidence; Set aside
• Section: 68; 144; 250; 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA आयकर अपीलीय अधीकरण, ᭠यायपीठ – “C” कोलकाता, BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No.327/Kol/2019 Assessment Year: 2012-13 Asva Power Systems India (P) Ltd., 1 st Floor, Block-C, Flat 1B, Sagar Jyoti Apartment, Ran-37, VIP Road, Raghunathpur, Kolkata- 700059. (PAN: AAJCA2971Q) Vs . Income Tax Officer, Ward- 10(1), Kolkata. (Appellant) (Respondent) Present for: Appellant by : Shri A. K. Tibrewal, FCA Respondent by : Smt. Ranu Biswas, Addl. CIT, DR Date of Hearing : 14.11.2022 Date of Pronouncement : 15.11.2022 O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of Ld. CIT(A)-15, Kolkata vide Appeal No. 119/CIT(A)-15/16- 17/Wd.10(1)/Kol dated 19.11.2018 passed against the assessment order by the Tax Recovery Officer-4, Kolkata u/s. 144 of the Income- tax Act, 1961 (hereinafter referred to as the “Act”) dated 22.03.2015. 2. Grounds raised by the assessee are reproduced as under: “1. That the Ld. Commissioner of Income Tax (Appeals) has erred in law as well as on the facts of the case in confirming the addition of sale consideration of Rs 2,00,00,000/- from the sale of shares u/s 68 of the IT Act by the Ld. Assessing Officer, based upon suspicions and surmises, without bringing on record any conclusive evidence against the assessee. I.T.A. No. 327/Kol/2019 Asva Power Systems India (P) Ltd., AY 2012-13 2 2. That the Ld. Commissioner of Income Tax (Appeals) did not even appreciate the fact that the assessee has presented all the documentary evidence to prove the genuineness of the transaction to the Ld. Assessing Officer. 3. That the appellant-assessee craves leave to add to and or alter and or modify any ground or grounds before and/or during the hearing of the appeal.” 3. Brief facts of the case are that assessee filed its return of income on 05.12.2012 reporting total income of Rs.96,618/-. The case was selected for scrutiny through CASS AST Module. Statutory notices were issued and served upon the assessee. In the course of assessment, ld. AO noted from the verification of ITD Database that assessee has issued paid up shares including share premium amounting to Rs. 2 Cr. In response to notices issued, none appeared on behalf of the assessee to explain its case. On issuing a show cause letter dated 10.03.2015 as to show cause why its assessment should not be completed ex parte u/s. 144 of the Act, no one appeared. Ld. AO proceeded to complete the assessment u/s. 144 of the Act wherein the amount of Rs. 2 Cr. shown as share capital introduced was added to the total income u/s. 68 of the Act. Aggrieved, assessee went in appeal before the Ld. CIT(A). 3.1. In the first appeal, Ld. CIT(A) noted that inspite of reasonable opportunities provided to the assessee, it did not avail them. Ld. CIT(A) referred to several judicial precedents and observed that owing to non-attendance of the assessee, it is held that assessee has merely filed Memo of Appeal and is not interested in pursuing the same and dismissed the appeal in view of the non-attendance of the assessee. After giving this finding in para 4.7, Ld. CIT(A) noted that he has looked at the merit of the case also by perusing the material on record and statement of facts filed in the appeal. However, it is noted that there are no such meritorious finding on the facts of the I.T.A. No. 327/Kol/2019 Asva Power Systems India (P) Ltd., AY 2012-13 3 case. Ld. CIT(A) referred to several decisions in respect of addition made u/s. 68 of the Act to sustain the addition who dismissed the appeal. Aggrieved, assessee is in appeal before the Tribunal. 4. Before us, Shri A. K. Tibrewal, FCA represented the assessee and Smt. Ranu Biswas, Addl. CIT, DR represented the department. 5. Ld. Counsel for the assessee submitted a petition under Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 (hereinafter referred to as the “ITAT Rules”) for admission of additional evidence in the appeal filed by it along with a paper book containing 140 pages. Ld. Counsel contended that assessment was completed ex parte for non-compliance of two notices issued by the Ld. AO. He further submitted that in the first appeal, proper and reasonable time was not allowed to the assessee because of which it could not file the details and documents in support of the identity, genuineness and creditworthiness in respect of the addition of Rs. 2 Cr. which was raised by the assessee by issuing and allotting 79600 shares of Rs. 10/- each issued at a premium of Rs.240/- each. He submitted that most of these documents are available in public domain. It was pleaded by the Ld. Counsel that the documents placed on record in the paper book are essential documents to render proper justice and may be admitted as additional new evidence. He further pleaded that in the interest of justice and fair play, the matter may be remitted back to the authorities below to examine the additional evidence in respect of the addition so made. By way of this petition, assessee has also given an undertaking to appear before the authorities below to extend full cooperation in all the proceedings once the matter is remitted back. I.T.A. No. 327/Kol/2019 Asva Power Systems India (P) Ltd., AY 2012-13 4 6. Ld. Sr. DR placed reliance on the orders of the authorities below and submitted that conduct of assessee has been rightly dealt with by passing the impugned order ex parte. 7. We have heard the rival submissions and perused the material available on record. We note that there are lapses on the part of the assessee to make the requisite compliance before the authorities below. We also note that Ld. CIT(A) has dismissed the appeal on account of non-attendance of the assessee without stating the points on facts and merits of the case. This action of Ld. CIT(A) cannot be countenanced. Assessee should be given proper opportunity to produce the documents and explanation in respect of the queries raised by the authorities below. From the perusal of Rule 29 of ITAT rules, we note that the said Rule provides, inter alia, “if the Income Tax Authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such documents to be produced and may allow such evidence to be produced.” We also take note of the provisions of sec. 250 of the Act which provides for procedure to be adopted by Ld. CIT(A) in disposing of any appeal, make such further enquiry as he thinks fit, or may direct the AO to make further enquiry and report the result of the same to the Commissioner Appeals. Further, sub-section (6) provides that Ld. CIT(A) shall pass an order in writing and shall set the points for determination, the decision thereof and the reasons for the decision. 8. Principle governing the exercise of powers by the first appellate authority are contemplated u/s. 250 and 251 of the Act, breach of it has far reaching consequences on the administration of justice I.T.A. No. 327/Kol/2019 Asva Power Systems India (P) Ltd., AY 2012-13 5 culminating into litigant approaching the higher appellate authority. We also take note of the decision of Hon’ble Supreme Court in the case of Tin Box Co. Vs. CIT (2001) 249 ITR 216 (SC) wherein the Hon’ble Supreme Court has directed that the assessee should be given proper opportunity during the assessment proceeding and failure to do so, the matter should be remitted back. 9. Keeping in mind the non-speaking order passed by the Ld. CIT(A) dismissing it for non-attendance, the provisions of sections 250 and 251 of the Act, the decision of Hon’ble Supreme Court in the case of Tin Box Ltd. (supra) and the petition filed under Rule 29 of the ITAT Rules along with paper book, all of which are referred and discussed above, we find it proper to remit the matter back to the file of Ld. CIT(A) to pass a speaking order on merits of the case by examining, verifying and analyzing the material placed on record. Needless to say that assessee be given reasonable opportunity of being heard, who shall be at liberty to make further submissions as deem fit. We further direct that in view of the undertaking given by the assessee of assuring to appear before the authorities below and extending full cooperation in all the proceedings for the impugned assessment year, Ld. CIT(A) shall be at liberty to deal with the matter appropriately in case assessee fails to abide by the undertaking given by it. 9.1. Since the matter is restored to the file of Ld. CIT(A) for meritorious adjudication by passing a speaking order in terms of our observations made hereinabove, we are not expressing any views on the merits of the case so as to limit the appellate procedure before the Ld. CIT(A). The observations herein made by us in remanding the matter back to the file of Ld. CIT(A) will not impair or I.T.A. No. 327/Kol/2019 Asva Power Systems India (P) Ltd., AY 2012-13 6 injure the case of the revenue nor will it cause any prejudice to the defence/explanation of the assessee. Accordingly, we set aside the impugned order of Ld. CIT(A) and restore the matter back to the file of the Ld. CIT(A) to decide afresh after affording reasonable opportunity of being heard to the assessee and the assessee is directed to be diligent in the appellate proceedings in terms of its undertaking. 10. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 15th November, 2022. Sd/- Sd/- (SANJAY GARG) (GIRISH AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata, Dated 15/11/2022 *JD. Sr. PS आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)-15, Kolkata. 5. िवभागीय Ůितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाईल /Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata