Sanjay Sharma, Kolkata V. A.C.I.T., Circle-40, Kolkata, Kolkata

ITA 406/KOL/2022

AI Insights

The case involves Sanjay Sharma, the appellant, who appealed against the order of the Commissioner of Income-tax (Appeals), which confirmed the addition of Rs. 10,26,06,475 to his income on account of alleged bogus sundry creditors. The assessee argued that the lower authorities' orders were arbitrary and lacked proper reasoning, and that he was not afforded a reasonable opportunity to explain his case, resulting in an ex-parte order. The Tribunal found merit in the assessee's request for another opportunity to present his case and directed the Assessing Officer to decide the matter afresh after considering all relevant evidence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 122917 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: B
• Next Hearing Date: 30-11-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 12-07-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMOL KAMAT
• Keywords: Opportunity of being heard; TDS; Set aside; FORM 26AS; Bogus
• Section: 142(1); 251; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH ‘B’, KOLKATA [Before Shri Rajesh Kumar, Accountant Member & Shri Sonjoy Sarma, Judicial Member] I.T.A. No. 406/Kol/2022 Assessment Year : 2015-16 Sanjay Sharma (PAN: AQHPS 0078 F) Vs. ACIT, Circle-40, Kolkata Appellant Respondent Date of Hearing 01.12.2022 Date of Pronouncement 05.01.2023 For the Assessee Shri Anil Kochar, Advocate For the Revenue Shri Amol Kamat, CIT/DR ORDER Per Shri Sonjoy Sarma, JM: This appeal of the assessee for the assessment year 2015-16 is directed against the order dated 21.06.2022 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’]. The assessee in this appeal has taken the following grounds of appeal: “1. For that the orders passed by the lower authorities are arbitrary, erroneous, without proper reasons, invalid and bad-in-law, to the extent to which they are prejudicial to the interests of the appellant. 2. For that the ld. CIT(A) erred in not affording reasonable opportunity to the appellant to explain the case resulting in ex-parte order. 3. For the ld. CIT(A) miserably failed to properly appreciate the facts of the case and in confirming the action of the AO in respect of addition of Rs. 10,26,06,475/- on account of alleged bogus sundry creditors. 4. For that the ld. CIT(A) ought not to have confirmed the addition of Rs. 10,26,06,475/- made by the AO on alleged grounds. 5. For that the ld. CIT(A) erred in directing the AO for verification of the amount appearing in Form 26AS vis-à-vis books of accounts. 2 ITA No. 406/Kol/2022 AY: 2015-16 Sanjay Sharma 6. For that the ld. CIT(A) issued the direction for verification of TDS appearing in Form 26AS vis-à-vis books of accounts in contravention to the provisions of section 251 of the Act. 7. For that the appellant craves leave to amend, alter, modify, substitute, add to, abridge and/or rescind any or all of the above grounds.” 2. Brief facts of the case are that the assessee is an individual and filed his return of income for A.Y. 2015-16 declaring total income at Rs. 16,97,990/-. The case of the assessee was selected for scrutiny through CASS under limited scrutiny and notices u/s 143(2) and 142(1) were issued upon the assessee. In response to the notices, AR of the assessee appeared and file requisite documents in such notices. During the assessment proceeding, the ld. AO noticed that the assessee had made certain transactions with different parties and assessee has also shown sundry creditors totaling of Rs. 10,26,06,475/- for the financial year 2014-15. During the assessment proceeding, the assessee could not able to produce any details about the sundry creditors and failing to discharge by providing names and address to the creditors. Therefore, the amount of Rs. 10,26,06,475/- is added back to the total income of the assessee u/s 41(1) of the Act. Besides that the ld. AO on perusal of the books of account submitted by the assessee and Form No. 26AS, the ld. AO found that there were mismatch of different parties during the assessment year in question. The ld. AO asked the assessee to submit reasons for such discrepancies but the assessee failed to submit any reply within the stipulated time prescribed by the AO, therefore, the AO added back of Rs. 36,42,987/- to the total income of the assessee. 3. Dissatisfied with the above order, assessee preferred an appeal before the Ld. CIT(A). However, the appeal of the assessee was partly allowed by the ld. CIT(A). 4. Aggrieved by the above order, the assessee is in appeal before the Tribunal raising multiple grounds of appeal. However, the main grievance of the assessee is that while passing the impugned order against the assessee, no reasonable opportunity has been given to the assessee and order was passed ex-parte. 3 ITA No. 406/Kol/2022 AY: 2015-16 Sanjay Sharma 5. At the time of hearing, the ld. counsel for the assessee submitted before us that since the impugned order has been passed ex-parte and assessee could not able to file necessary documents and its submission. Therefore, the impugned order was bad in law and further prays before us that one more opportunity may be given to the assessee and the issues of the instant appeal may be set aside to the file of ld. AO by providing opportunity to submit all relevant evidences and supported documents to substantiate its claim. 6. The ld. DR was fair enough not to oppose such request made by the ld. AR. We, therefore, under the given facts and circumstances of the case, we are of the considered view that since the impugned order passed by the ld. CIT(A) did not decides the issue on merits of the case. Therefore, we in the interest of justice set aside the impugned order and remit it back to the file of AO for deciding the issue raised before us by way of speaking order. We also direct the assessee to furnish such evidence in support of its claim and remain vigilant in receiving the notice from the ld. AO. It is also clarified that assessee should not request for any further adjournment unless otherwise required for reasonable cause and should file all necessary evidence/documents in support of its claim so as to facilitate the ld. AO for passing the order in accordance with law. Needless to mention that assessee should be given proper opportunity of being heard. 7. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open court on 05.01.2023. Sd/- Sd/- (Rajesh Kumar) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 05.01.2023 Biswajit, Sr. PS 4 ITA No. 406/Kol/2022 AY: 2015-16 Sanjay Sharma Copy of the order forwarded to: 1. Appellant- Sanjay Sharma, 191, Rabindra Sarani, 1 st Floor, Kolkata-700 007. 2. Respondent – ACIT, Circle-40, Kolkata. 3. Ld. CIT 4. Ld. CIT(A) 5. Ld. DR True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata