J B DIAMONDS, MUMBAI V. ASST CIT CEN CIR 15 & 16, MUMBAI

ITA 3306/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4504 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A MOHAN
• Keywords: Transfer pricing; Search and seizure; Opportunity of being heard; Set aside; Liquidation
• Section: 142(1); 153A; 201; 144C; 143(2); 142(2A); 144

Judgement Text

1 ITA 3306/MUM /2019 IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) I.T.A. NO. 3306 /MUM/2019 (ASSESSMENT YEAR 20 08 - 09 ) M/S J.B. DIAMONDS B - 2005, 20 TH FLOOR, CHANDANBALA CHS, R.R. THAKKAR MARG, WALKESHWAR, MUMBAI - 400 006 PAN : AAAFJ020OB VS ACIT, CENT.CIR.15 &16, MUMBAI APPELLANT RESPONDENT APPELLANT BY SHRI VIJAY MEHTA (AR) RESPONDENT BY SHRI A MOHAN [CIT (DR)] DATE OF HEARING 16 - 0 3 - 2021 DATE OF PRONOUNCEMENT 0 3 - 0 5 - 2021 O R D E R PER SAKTIJIT DEY, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER DATED 12 - 0 1 - 201 9 OF L EARNED COMMISSIONER OF INCOME T AX (APPEALS) - 55 , MUMBAI FOR THE ASSESSMENT YEAR 20 08 - 09 . 2. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A PARTNERSHIP FIRM. AS MENTIONED BY THE ASSESSING OFFICER, ASSESSEE IS ENGAGED IN THE BUSINESS OF IMPORT, MANUFACTURE, TRADING IN DIAMONDS, WINDMILLS. A SEARCH AND SEIZURE OPERATION WERE CARRIED OUT IN CASE OF THE ASSESSEE AS WELL AS OTHER GROUP CONCERNS ON 29 - 10 - 2010.IN PURSUANCE TO SUCH SEARCH AND SEIZURE OPERATION, ASSESSMENT PROCEEDINGS U NDER 2 ITA 3306/MUM /2019 SECTION 153A OF THE ACT WAS INITIATED FOR THE IMPUGNED ASSESSMENT YEAR. IT IS FURTHER EVIDENT, ASSESSEES CASE WAS REFERRED FOR SPECIAL AUDIT U NDE R SECTION 142(2A) OF THE ACT. BE THAT AS IT MAY, IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ISSUED NOTICES U NDER SECTION 142(1) AN 143(2) OF THE ACT CALLING FOR VARIOUS DETAILS. IN RESPONSE TO SUCH NOTICES, THE ASSESSEE SUBMITTED THAT SINCE THE ERSTWHILE PARTNERSHIP FIRM , IN THE MEANWHILE, HAS BEEN CONVERTED TO A COMPANY AND IS IN THE PROCESS OF LIQUIDATION AND SINCE ALL RECORDS OF THE PARTNERSHIP FIRM AND COMPANY ARE IN THE POSSESSION OF THE OFFICIAL LIQUIDATOR, THE DETAILS CALLED FOR COULD NOT BE FURNISHED. ALLEGING THAT THE ASSESSEE DID NOT COMPLY WITH THE STATUTORY NOTICES AND FURNISH THE NECESSARY DETAILS, THE ASSESSING OFFICER PROCEEDED TO COMPLETE THE ASSESSMENT U NDER SECTION 144 OF THE ACT TO THE BEST OF HIS JUDGEMENT. WHILE DOING SO, HE MADE A REFERENCE TO THE TRANSFER PRICING OFFICER (TPO) AND THEREAFTER PASSED THE ASSESSMENT ORDER U NDER SECTION 144 R.W.S. 144C OF THE ACT DETERMINING THE TAXABLE INCOME OF THE ASSESSEE AT RS.137,21,96,930/ - , WHICH INCLUDED TRANSFER PRICING ADJUSTMENT MADE OF RS.30,61,88,481/ - . AGAINST THE ASSESSMENT ORDER SO PASSED, ASSESSEE PREFERRED APPEAL BEFORE L EARNED COMMISSIONER OF INCOME T AX (APPEALS). BY THE IMPUGNED ORDER, L EARNED COMMISSIONER OF INCOME T AX (APPEALS) DISPOSED OF ASSESSEES APPEAL EX PARTE BY DISMISSING IT. 3. SHRI VIJAY MEHTA, THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED, THE FIRST APPELLATE AUTHORITY HAS DECIDED ASSESSEES APPEAL EX PARTE WITHOUT PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. FURTHER, HE SUBMITTED, THOUGH , THE ASSESSEE HAD RAISED SPECIFIC GROUND CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER PASSED U NDER SECTION 144 R.W.S. 144C(1) OF ACT AS WELL AS THE GROUNDS RELATING TO MERITS OF THE ADDITION MADE ON 3 ITA 3306/MUM /2019 ADHOC BASIS , H OWEVER, L EARNED COMMISSIONER OF INCOME T AX (APPEALS) HAS FAILED TO ADJUDICATE THEM. THUS, HE SUBMITTED, THE MATTER MAY BE RESTORED BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 4. SHRI A MOHAN, LEARNED D EPARTMENTAL R EPRESENTATIVE, THOUGH RELIED UPON THE OBS ERVATIONS OF THE ASSESSING OFFICER AND L EARNED COMMISSIONER OF INCOME T AX (APPEALS); HOWEVER, HE SUBMITTED, THE MATTER MAY BE RESTORED BACK TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RE CORD. THE FACTS ON RECORD CLEARLY REVEAL THAT NOT ONLY THE ASSESSMENT ORDER HAS BEEN PASSED U NDER SECTION 144 R.W.S. 144C(1) OF THE ACT TO THE BEST OF THE JUDGEMENT OF THE ASSESSING OFFICER ; BUT THE APPEAL FILED BEFORE THE FIRST APPELLATE AUTHORITY HAS AL SO BEEN DECIDED EX PARTE. IT IS FURTHER NOTICED FROM THE IMPUGNED ORDER OF L EARNED COMMISSIONER OF INCOME T AX (APPEALS) THAT WHILE ON SOME OCCASIONS THE ASSESSEE TOOK ADJOURNMENT , WHEREAS , ON COUPLE OF OCCASIONS THE NOTICE OF HEARING ISSUED TO THE ASSESSEE RETURNED BACK UNSERVED. THAT IS WHY L EARNED COMMISSIONER OF INCOME T AX (APPEALS) PROCEEDED TO DECIDE THE APPEAL EX PARTE. IN OUR VIEW, CONSIDERING THE NATURE AND QUANTUM OF ADDITION MADE, ASSESSEE COULD HAVE BEEN GIVEN REASONABLE OPPORTUNITY OF BEING HEA RD TO PUT FORWARD ITS C ASE AGAINST THE ADDITIONS MADE. WE HAVE ALSO NOTED, CERTAIN GROUNDS RAISED BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY CHALLENGING THE VALIDITY OF THE ASSESSMENT ORDER AS WELL AS ON THE MERITS OF THE ADDITION MADE HAVE NOT B EEN SPECIFICALLY ADJUDICATED BY THE L EARNED COMMISSIONER OF INCOME T AX (APPEALS). THEREFORE, CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES OF THE CASE AND PARTICULARLY THE FACT THAT BOTH, BEFORE THE ASSESSING OFFICER AND LEARNED FIRST APPELLATE AUTHORIT Y, THE ASSESSEE DID NOT GET A PROPER OPPORTUNITY FOR 4 ITA 3306/MUM /2019 REPRESENTING ITS CASE, FOR WHATEVER MAY BE THE REASON, WE ARE INCLINED TO SET ASIDE THE IMPUGNED ORDER OF L EARNED COMMISSIONER OF INCOME T AX (APPEALS) AND RESTORE THE MATTER BACK TO THE ASSESSING OFFICER FOR FRESH ASSESSMENT AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AT THE SAME TIME, WE ALSO DIRECT THE ASSESSEE TO COMPLY WITH THE QUERIES TO BE RAISED BY THE ASSESSING OFFICER AND REPRESENT ITS CASE IN A PROPER AND EFFECTIVE MANNER. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSE S . 6. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSE S . ORDER PRONOUNCED ON 0 3 /0 5 /2021. S D / - S D / - (MANOJ KUMAR AGGARWAL) ( SAKTIJIT DEY ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 0 3 /0 5 /2021 PAVANAN COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) 5. THE DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI