M/s Integral Barter (P) Ltd., Kolkata V. I.T.O.,Ward-6(4), Kolkata

ITA 381/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2338 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 01-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJOY SHANKAR
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 142(1); 22; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.381/KOL/2019 ( / ASSESSMENT YEAR: 2011-12) M/S INTEGRAL BARTER (P) LTD. C/O, RAJESH MOHAN & ASSOCIATES UNIT NO. 18, BAGATI HOUSE, 5 TH FLOOR, 34, GANESH CHANDRA AVENUE, KOLKATA-700013 VS. ITO, WARD-6(4), KOLKATA ./ ./PAN/GIR NO.: AACCI 5359 M (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SUNIL SURANA, FCA RESPONDENT BY :SHRI VIJOY SHANKAR, CIT / DATE OF HEARING : 27/02/2020 /DATE OF PRONOUNCEMENT : 20/03/2020 / O R D E R PER DR. A.L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERT AINING TO ASSESSMENT YEAR 2011-12, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-2, KOLKATA, IN APPEAL NO. 10787/CIT(A-2/20 16-17, WHICH IN TURN ARISES OUT OF AN ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3)R.W.S. 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DA TED 29/12/2016. M/S INTEGRAL BARTER (P) LTD. ITA NO. 381/KOL/2019 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 2 22 2 2. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT LD. PCIT HAD DIRECTED THE ASSESSING OFFICER U/S 263 OF THE ACT T O CONDUCT THE INDEPENDENT ENQUIRY TO VERIFY THE DOCUMENTSIN RESPECT OF SUBSCR IPTION OF SHARE CAPITAL WHICH HE HAD FAILED TO DO SO. THEREFORE, THE MATTER SHOULD B E REMITTED BACK TO THE FILE OF ASSESSING OFFICER TO CONDUCT THE ENQUIRY INDEPENDEN TLY WITHOUT TAKING ASSISTANCE OF THE ASSESSEE. FOR THAT LD. COUNSEL RELIED ON THE JUDGMENT OF CO-ORDINATE BENCH IN THE CASE OF SHALIMAR DEALERS PVT. LTD. IN ITA NO . 607/KOL/2017 FOR AY 2009- 10 DATED 20/07/2018 WHEREIN THE TRIBUNAL HAS HELD A S FOLLOWS: 5. LEARNED COUNSEL REPRESENTING ASSESSEE SUBMITS T HAT BOTH THE LOWER AUTHORITIES HAVE NOT COMPLIED WITH THE CITS EXPRESSED DIRECTIO NS ISSUED U/S 263 OF THE ACT MAKING IT CLEAR THAT THE ASSESSING OFFICER HAD TO M AKE AN INDEPENDENT ENQUIRIES FOR THE PURPOSE OF VERIFYING ITS INVESTOR PARTIES. HIS CASE THEREFORE IS THAT THE ABOVE DIRECTIONS HAVE GONE UNREBUTTED FROM REVENUE SIDE. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THE SAME AS THERE I S NO MATERIAL ON RECORD SUGGESTINGANY SUCH INDEPENDENT ENQUIRIES TO HAVE BE EN CONDUCTED AT THE ASSESSING OFFICERS END. LEARNED COUNSEL THEREAFTER INVITES OUR ATTENTION TO THIS TRIBUNALS DECISION IN SUKANYA MERCHANDISE PVT. LTD VS ITO ITA 291/KOL/2016 DATED 15.12.2017 RESTORING THE VERY ISSUE BACK TO T HE ASSESSING OFFICER IN IDENTICAL CIRCUMSTANCES AS UNDER :- WE NOTE THAT THE AO PURSUANT TO THE ORDER OF LD. C IT HAD TAKEN NOTE OF THE DIRECTIONS OF THE LD. CIT AND ISSUED NOTICE U/S . 142(1) DATED 16.08.2013 AND HAS ACKNOWLEDGED THAT THE ASSESSEE H AD FURNISHED THE COPY OF FINAL ACCOUNT, I. T. ACKNOWLEDGEMENT, BANK STATEMENT FOR THE RELEVANT PERIOD EVIDENCING THE RECEIPT OF SHARE APP LICATION MONEY FROM THE SHARE APPLICANTS. THEREAFTER, THE AO MAKES CERTAIN INFERENCES BASED ON THE LIST OF SHAREHOLDERS AND TAKING NOTE OF THE BAN K STATEMENT FURNISHED BY THE ASSESSEE. WE NOTE THAT AFTER THE INITIAL NOTICE DATED 16.08.2013, THEREAFTER THE AO HAD ISSUED THE NOTICE ON 26.02.20 14 WHICH HAS BEEN REPRODUCED AT PAGE 3 OF THE REASSESSMENT ORDER, WHE REIN AO REQUIRED THE DIRECTORS OF THE ASSESSEE COMPANY TO BE PRESENT BEF ORE HIM ON 06.03.2014. HOWEVER, ACCORDING TO THE LD. AR, THE ASSESSEE RECE IVED THE NOTICE ONLY ON 07.03.2014 AND THEREAFTER, THE ASSESSEE REQUESTE D THE AO TO PROVIDE ANOTHER OPPORTUNITY OF HEARING VIDE ITS LETTER DATE D 20.03.2014. THEREAFTER, THE AO FIXED THE DATE OF HEARING ON 12. 03.2014 VIDE NOTICE DATED 10.03.2014. SO, ACCORDING TO THE ASSESSEE COM PANY SINCE THE DIRECTORS WERE NOT IN STATION TILL 23.03.2014, THE LD. AR HAD REQUESTED FOR ADJOURNMENT TILL THAT TIME. THOUGH THE AO HAS STATE D THAT HE HAS ISSUED SUMMONS ON 24.03.2014 TO THE ASSESSEE COMPANY TO PR ODUCE THE DIRECTORS OF THE COMPANY BEFORE HIM ON 26.03.2014, THE ASSESS EE COMPANY CONTENDED THAT IT HAS NOT RECEIVED THE SAID SUMMON AND, THEREFORE, COULD NOT MAKE THE PERSONAL APPEARANCE. THE AO HAS DRAWN ADVERSE CONCLUSION BASICALLY BECAUSE OF NON-APPEARANCE OF THE DIRECTOR S OF THE ASSESSEE M/S INTEGRAL BARTER (P) LTD. ITA NO. 381/KOL/2019 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 3 33 3 COMPANY AND THAT OF THE SHAREHOLDER COMPANIES. WE N OTE THAT INITIALLY THE AO STARTED THE ENQUIRY ON 16.08.2013 WHICH WAS COMP LIED BY THE ASSESSEE BY SUBMITTING DOCUMENTS WHICH HAS BEEN ACKNOWLEDGED BY THE AO. THEREAFTER, THE ENQUIRY WAS STARTED ONLY AT THE FAG END OF FEBRUARY 2014 AND THE ASSESSEE COMPANY HAD INFORMED THE AO THAT T HEIR DIRECTORS WERE OUT OF STATION TILL 23.03.2014. IN THE LIGHT OF THE AFORESAID FACTS, WE ARE OF THE OPINION THAT THE ASSESSEE DID NOT GET FAIR OPPO RTUNITY TO PRESENT THE EVIDENCES BEFORE THE AO SO, THERE WAS A LACK OF OPP ORTUNITY AS AFORESAID, THEREFORE, IT HAS TO GO BACK TO AO. 8. WE ALSO NOTE THAT LD. CIT WHILE SETTING ASIDE THE ORDER OF THE AO WHICH WAS PASSED U/S. 147/143(3) OF THE ACT, THE LD. CIT GAVE CERTAINGUIDELINES TO FOLLOW FOR CONDUCTING DEEP INVESTIGATION. WE ALS O NOTE THAT SIMILARLY PLACED ASSESSEES HAD CHALLENGED THE EXERCISE OF REV ISIONAL JURISDICTION U/S. 263 OF THE ACT BEFORE THIS TRIBUNAL IN THOSE CASES ONE OF IT OF SUBHA LAKSHMI VANIJYA PVT. LTD. VS. CIT IN ITA NO. 1104/K OL/2014 DATED 30.07.2015, WHEREIN THE TRIBUNAL WAS PLEASED TO UPH OLD THE ORDER PASSED BY THE LD. CIT PASSED U/S. 263 OF THE ACT, WHICH WE LEARN TO HAVE BEEN CONFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT AND THE SLP PREFERRED AGAINST THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT. THEREFORE, SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD. WE NOTE THAT THE AO WHILE GIVING EFFECT TO THE CITS 263 ORDER HAS NOTE D THAT THE ASSESSEE COMPANY HAS IN FACT FURNISHED THE DOCUMENTS SOUGHT BY HIM TO HIS NOTICE U/S. 142(1) OF THE ACT. HOWEVER, THE AO TOOK THE AD VERSE VIEW AGAINST THE ASSESSEE ON THE PLEA THAT THE DIRECTORS OF THE ASSE SSEE COMPANY AND SHARE SUBSCRIBING COMPANIES HAD NOT APPEARED BEFORE HIM O N 26.03.2014 AND T AFTER TAKING NOTE THAT NONE APPEARED ON 26.03.2014 CONCLUDED ON THE SAME DAY 26.03.2014 THAT ENTIRE AMOUNT OF SHARE APPLICAT ION MONEY RECEIVED ALONG WITH PREMIUM AMOUNTING TO RS.8,06,00,000/- WH ICH HAS REMAINED UNEXPLAINED AND ADDED TO THE INCOME OF THE ASSESSEE . WE ALSO NOTE THAT THE LD. CIT AFTER LOOKING INTO THE PERNICIOUS PRACT ICE OF CONVERTING BLACK MONEY INTO WHITE MONEY HAS GIVEN THE GUIDELINES TO AO AS TO HOW THE INVESTIGATION SHOULD BE CONDUCTED TO FIND OUT THE S OURCE OF SOURCE. SINCE SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD BY THE TRIBUNAL AS WELL AS BY THE HONBLE CALCUTTA HIG H COURT AS WELL AS THE SLP HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT , SIMILAR ORDER OF THE LD. CIT HAS TO BE GIVEN EFFECT TO AS DIRECTED B Y THE LD. CIT. WE TAKE NOTE THAT THE LD. CIT WITH HIS EXPERIENCE AND WISDO M HAS GIVEN CERTAIN GUIDELINES IN THE BACKDROP OF BLACK MONEY MENACE SH OULD HAVE BEEN PROPERLY ENQUIRED INTO AS DIRECTED BY HIM. THE AO O UGHT TO HAVE FOLLOWED THE INVESTIGATING GUIDELINES AND METHOD AS DIRECTED BY HIM TO UNEARTH THE FACTS TO DETERMINE WHETHER THE IDENTITY, GENUINENES S AND CREDITWORTHINESS OF THE SHARE SUBSCRIBERS. WE NOTE THAT THE HONBLE SUPREME COURT IN THREE JUDGES BENCH IN THE CASE OF TIN BOX, (SUPRA), HAS H ELD THAT SINCE THERE WAS LACK OF OPPORTUNITY TO THE ASSESSEE AT THE ASSESSME NT STAGE ITSELF, THE ASSESSMENT NEEDS TO BE DONE AFRESH AND THEREBY REVE RSED THE HONBLE HIGH COURT, TRIBUNAL AND CIT(A)S ORDERS AND REMAND ED THE MATTER BACK TO AO FOR FRESH ASSESSMENT. SO, SINCE THERE WAS LAC K OF OPPORTUNITY AS AFORESTATED IT HAS TO GO BACK TO AO. WE ALSO NOTE T HAT THE HONBLE DELHI M/S INTEGRAL BARTER (P) LTD. ITA NO. 381/KOL/2019 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 4 44 4 HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERT ISING & MARKETING PVT. LTD. IN ITA NO. 525/2014 DATED 11.03.2015 WHER EIN AFTER NOTICING INADEQUATE ENQUIRY BY AUTHORITIES BELOW HAVE HELD A S UNDER: 41. WE ARE INCLINED TO AGREE WITH THE CIT(APPEALS) , AND CONSEQUENTLY WITH ITAT, TO THE EXTENT OF THEIR CONC LUSION THAT THE ASSESSEE HEREIN HAD COME UP WITH SOME PROOF OF IDEN TITY OF SOME OF THE ENTRIES IN QUESTION. BUT, FROM THIS INFERENCE, OR FORM THE FACT THAT THE TRANSACTIONS WERE THROUGH BANKING CHANNELS , IT DOES NOT NECESSARILY FOLLOWING THAT SATISFACTION AS TO THE C REDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEEN ESTABLISHED. 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OB LIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGI CAL CONCLUSION. BUT CIT(APPEALS), HAVING NOTICED WANT OF PROPER INQ UIRY, COULD NOT HAVE CLOSED THE CHAPTER SIMPLY BY ALLOWING THE APPEAL AND DELETING THE ADDITIONS MADE. IT WAS ALSO THE OBLIGA TION OF THE FIRST APPELLATE AUTHORITY, AS INDEED OF ITAT, TO HAVE ENS URED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE ALLEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEME NTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS I N THE RESPECTIVE ACCOUNTS PRECEDING THE TRANSACTIONS IN QUESTION. TH IS NECESSITATED A DETAILED SCRUTINY OF THE MATERIAL SUBMITTED BY TH E ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION148 ISSUED BY T HE AO, AS ALSO THE MATERIAL SUBMITTED AT THE STAGE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSING TO BE MADE A 'FURTHER INQU IRY IN EXERCISE OF THE POWER UNDER SECTION 250(4). HIS APPROACH NOT HAVING BEEN ADOPTED, THE IMPUGNED ORDER OF ITAT, AND CONSEQUENT LY THAT OF CIT(APPEALS), CANNOT BE APPROVED OR UPHELD.' IN VIE W OF THE AFORESAID ORDER AND IN THE LIGHT OF THE HONBLE SUP REME COURTS DECISION IN TIN BOX COMPANY (SUPRA) AND TAKING INTO CONSIDERATION THE FACT THE ORDER OF THE LD. CIT PAS SED U/S. 263 OF THE ACT IN SIMILAR CASES BEING UPHELD UP TO THE LEV EL OF APEX COURT, AND TAKING NOTE OF HONBLE DELHI HIGH COURTS ORDER IN JANSAMPARK ADVERTISING & MARKETING PVT. LTD. (SUPRA ), WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MA TTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMENT AND TO DECIDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND I N THE INTEREST OF JUSTICE TO SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE IN DISPUTE AND RESTORE THE MATTER TO THE FILE OF TH E A.O. TO DECIDE THE SAME AFRESH AFTER GIVING THE ASSESSEE PROPER AN D SUFFICIENT OPPORTUNITY OF BEING HEARD AND AFTER TAKING INTO CO NSIDERATION THE ENTIRE EVIDENCE ALREADY AVAILABLE ON RECORD AS WELL AS OTHER DOCUMENTARY EVIDENCE WHICH THE ASSESSEE MAY CHOOSE TO FILE IN SUPPORT OF ITS CASE ON THE ISSUE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURP OSE. M/S INTEGRAL BARTER (P) LTD. ITA NO. 381/KOL/2019 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 5 55 5 6. WE ADOPT THE ABOVE REMAND DIRECTIONS MUTATIS MUT ANDIS TO RESTORE THE INSTANT LIS BACK TO THE ASSESSING OFFICER FOR FRESH PROCEED INGS AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE TOOK US THROUGH THE RELEVANT PARA OF ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER QUOTED THE DIRE CTION GIVEN BY LD. PCIT, WHICH IS REPRODUCED BELOW: LD. PR. CIT-2, KOLKATA AFTER DESCRIBING THE FACTS OF THE CASES, PASSED AN ORDER U/S 263 OF THE I. T. ACT, 1961 BY SETTING ASIDE TH E ORDER PASSED U/S 143(3) BY THE A.O. WITH A DIRECTION TO I) TRACE THE SOURCE OF SHARE CAPITAL BY ENQUIRING I NTO THE VARIOUS LAYERS THROUGH WHICH ARE MONEY HAS BEEN INTRODUCED IN THIS COMPANY AS SHARE CAPITAL AND ALSO EXAMINE THE DIRECTORS OF SUBSCRIBER COMPANIES BY IS SUINGSUMMONS U /S 131 OF THE IT ACT. II) SEND INFORMATION TO THE ASSESSING OFFICERS HAV ING JURISDICTION OVER THE SUBSCRIBER COMPANY TO THE SHARE CAPITAL REGARDING I TS INVESTMENT INTO SHARE CAPITAL &PREMIUM PAID, III) CONDUCT INDEPENDENT ENQUIRIES TO VERILY THE DO CUMENTS FILED IN RESPECT OF PROOF OF SUBSCRIPTION TO SHARE-CAPITAL. IV) CALL UPON ASSESSEE TO IDENTIFY THE PERSONS WHO ARE SHOWN AS DIRECTORS OF THE ASSESSEE COMPANY AND EXAMINE THEM ON OATH TO VERIFY THEIR CREDENTIAL AS DIRECTORS. V) PASS SPEAKING ORDER AFTER PROVIDING REASONABLE O PPORTUNITY TO THE ASAESSEE AND 'VERIFYING THE SOURCE OF SHARE CAPITAL, INCLUDI NG THE SHARE PREMIUM OFALL THESUBSCRIBERS. RESPECTFULLY FOLLOWING THE DIRECTION OF PR. CIT-2, KOLKATA, THE CASE HAD TO BE ASSESSED AFRESH. ACCORDINGLY A NOTICE U/S.142(1)) O F THE: IT ACT, 1961 DATED 20.07.2016 WAS ISSUED AND DULY SERVED ON THE ASSESS EE COMPANY ASKING TO APPEAR AND FURNISH CERTAIN DOCUMENTS ON 29.07.2016 AT 11:30 AM. IN RESPONSE TO THE NOTICE, SHRI V SINGH, A/R OF THE ASSESSEE, APPE ARED AND FILED PART SUBMISSION. 4. WE NOTE THAT LD. PCIT HAS DIRECTED THE ASSESSING OFFICER TO CONDUCT THE INDEPENDENT ENQUIRY TO VERIFY THE DOCUMENTS IN RESP ECT OF SHARE CAPITAL WHICH HE HAD FAILED TO DO SO, THEREFORE ORDER GIVING EFFECT PASSED BY THE ASSESSING OFFICER IS M/S INTEGRAL BARTER (P) LTD. ITA NO. 381/KOL/2019 ASSESSMENT YEAR:2011-12 P PP PA AA AG GG GE EE E | || | 6 66 6 NOT IN TUNE WITH THE DIRECTION GIVEN BY THE LD. PCI T THEREFORE WE SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) AND REMIT THIS ISSUE B ACK TO THE FILE OF ASSESSING OFFICER TO ADJUDICATE THE ISSUE AFRESH BY CONDUCTIN G INDEPENDENT ENQUIRY, AS DIRECTED BY THE LD PCIT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 20.03.2020 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 20/03/2020 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S INTEGRAL BARTER (P) LTD. 2. ITO, WARD-6(4), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATABENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES