M/s Hansa Textrade Pvt. Ltd., Jaipur V. I.T.O.,Ward-1(1), Kolkata

ITA 433/KOL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3520 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 06-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Principle of natural justice; Initiation of penalty proceedings; Set aside
• Section: 143(3); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B, BENC H KOLKATA BEFORE SHRI S.S. GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.433/KOL/2019 ( / ASSESSMENT YEAR: 2015-16) M/S HANSA TEXTRADE PVT. LTD. B-14, HEERA NAGAR, SHIPRA PATH CORNER, MANSAROVER, JAIPUR VS. ITO, WARD-1(1), KOLKATA ./ ./PAN/GIR NO.: AAACH 6462 L (ASSESSEE) .. (REVENUE) ASSESSEE BY : SHRI MIRAJ D SHAH, A.R. RESPONDENT BY : SMT. RANU BISWAS, ADDL. CIT / DATE OF HEARING : 31/10/2019 /DATE OF PRONOUNCEMENT : 13/11/2019 / O R D E R PER BENCH: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PER TAINING TO ASSESSMENT YEAR 2015-16 IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEAL)-12, KOLKATA, WHICH IN TURN ARISES OUT OF A N ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 26/12/2017. 2. AT THE OUTSET ITSELF, THE LD COUNSEL FOR THE ASS ESSEE SUBMITTED THAT THE NOTICE FOR HEARING HAS NOT BEEN SERVED ON THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS THEREFORE, ASSESSEE COULD NOT EXPLAIN THE DOCUMENTS AND EVIDENCES SUBMITTED TO ASSESSING OFFICER. THE LD. COUNSEL ALSO SUBMITTED B EFORE THE BENCH THAT DURIN GHTE ASSESSMENT STAGE THE ASSESSEE FURNISHED BEFORE ASSE SSING OFFICER, THE AUDITED BALANCE SHEET, PROFIT AND LOSS ACCOUNT, BANK ACCOUN T, BANK STATEMENT AND OTHER HANSA TEXTRADE PVT. LTD. ITA NO.433/KOL/2019 ASSESSMENT YEAR:2015-16 P PP PA AA AG GG GE EE E | || | 2 22 2 DOCUMENTS BUT THE ASSESSING OFFICER FAILED TO CONSI DER THESE EVIDENCES TO REACH ON A LOGICAL CONCLUSION. THE ASSESSING OFFICER HAS NEI THER EXAMINED THESE EVIDENCES / DOCUMENTS PROPERLY NOR HAS GIVEN PROPER OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THEM. THE LD. COUNSEL THEN TOOK US THROUGH THE FIND INGS OF THE ASSESSING OFFICER WHICH IS GIVEN BELOW: 2.2 HENCE IN ABSENCE OF ANY PROPER CLARIFICATION A ND FOR WANT OF EVIDENCES, LOSS ON SALE OF SHARE RS. 78,83,700/-, SO CLAIMED AS IN THE PROFIT & LOSS ACCOUNT, IS CONSIDERED AS UNEXPLAINED AND ADDED TO THE TOTAL IN COME OF THE ASSESSEE COMPANY. THE UNDERSIGNED IS ALSO SATISFIED WITH THE FACT THAT THIS IS A FIT CASE FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C ) OF THE ACT. THIS PENALTY PROCEEDING IS BEING INITIATED SEPARATELY. FROM BARE READING OF THE CONCLUSION PARA OF THE ASS ESSING OFFICER, IT IS ABUNDANTLY CLEAR THAT ASSESSING OFFICER MADE ADDITION SOLELY O N THE GROUND THAT ASSESSEE HAS NOT FURNISHED PROPER CLARIFICATION AND EVIDENCES. T HE LD. COUNSEL SUBMITTED THAT DURING THE ASSESSMENT STAGE, THE ASSESSEE SUBMITTED EACH AND EVERY DOCUMENTS / EVIDENCES DEMANDED BY ASSESSING OFFICER; AS MENTION ED IN PARA 1.2 OF ASSESSMENT ORDER. HOWEVER, ASSESSING OFFICER HAS NOT GIVEN PRO PER OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THESE DOCUMENTS AND EVIDENCES, THEREFORE, LD. COUNSEL PRAYED THE BENCH THAT AN ANOTHER OPPORTUNITY SHOULD BE GIV EN TO ASSESSEE TO PLEAD HIS CASE BEFORE THE ASSESSING OFFICER. 3. WE HEARD BOTH THE PARTIES AND CAREFULLY GONE THR OUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLU DING THE FINDINGS OF THE LD CIT(A) AND OTHER MATERIAL AVAILABLE ON RECORD. WE N OTE THAT THE ASSESSING OFFICER HAS MADE ADDITION MAINLY ON THE GROUND THAT ASSESSE E HAS NOT FURNISHED EVIDENCES AND PROPER CLARIFICATION. WE NOTE THAT DURING THE A SSESSMENT STAGE THE ASSESSEE SUBMITTED ENTIRE EVIDENCES / DOCUMENTS DEMANDED BY ASSESSING OFFICER, WHICH IS MENTIONED IN PARA 1.2 OF ASSESSMENT ORDER WHICH IS REPRODUCED BELOW FOR READY REFERENCE: IN RESPONSE TO THE ABOVE MENTIONED NOTICES, MR. PR AVEEN KAYAL, A/R OF THE ASSESSEE COMPANY APPEARED FROM TIME TO TIME AND EXP LAINED THE RETURN OF INCOME. HE FILED VARIOUS DETAILS, PRODUCED BOOKS OF ACCOUNT S, AND EXPLAINED THE ISSUES BROUGHT UP AT THE HEARING STAGE. FURTHER, HE ALSO F URNISHED COPIES OF THE AUDITED BALANCE SHEET, PROFIT & LOSS ACCOUNT, BANK ACCOUNT DETAILS ALONG WITH BANK HANSA TEXTRADE PVT. LTD. ITA NO.433/KOL/2019 ASSESSMENT YEAR:2015-16 P PP PA AA AG GG GE EE E | || | 3 33 3 STATEMENT OF THE ASSESSEE COMPANY, FOR THE RELEVANT PREVIOUS YEAR. THE SAME WERE DULY CHECKED AND EXAMINED ON A SAMPLE BASIS. THE AS SESSEE COMPANY WAS A NON- BANKING FINANCIAL COMPANY, AND ENGAGED IN THE BUSIN ESS OF INVESTMENT AND PROVIDING LOANS AND ADVANCES, DURING THE RELEVANT P REVIOUS YEAR. ON EXAMINATION OF ACCOUNTS, SUPPORTING DETAILS / DOCUMENTS FURNISH ED IN RESPECT OF THE ASSESSEE COMPANY, THE UNDER MENTIONED ISSUES HAVE BEEN NOTED . SO FAR PROPER CLARIFICATION OF THESE EVIDENCES IS C ONCERNED WE NOTE THAT ASSESSING OFFICER HAS NOT PROVIDED ENOUGH OPPORTUNITY TO THE ASSESSEE TO EXPLAIN THESE EVIDENCES THEREFORE WE ARE OF THE VIEW THAT MATTER SHOULD BE REMITTED BACK TO THE FILE OF THE ASSESSING OFFICER TO FURNISH PROPER EXP LANATION. THEREFORE, RELYING ON THE JUDGMENT OF THE HONBLE (THREE JUDGE BENCH) OF THE HONBLE SUPREME COURT IN TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC) WH EREIN IT WAS HELD AS FOLLOWS: IT IS UNNECESSARY TO GO INTO GREAT DETAIL IN THESE MATTERS FOR THERE IS A STATEMENT IN THE ORDER OF THE TRIBUNAL, THE FACT-FINDING AUTH ORITY, THAT READS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORT UNITY OF BEING HEARD. THAT THE ASSESSEE COULD HAVE PLACED EVIDENCE BEFORE THE FIRST APPELLATE AUTHORITY OR BEFORE THE TRIBUNAL IS REALLY OF NO CONSEQUENCE FOR IT IS THE ASSESSMENT ORDER THAT COUNTS. THAT ORDER MUST BE MADE AFTER THE ASSE SSEE HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF SETTING OUT HIS CASE. WE, THEREFORE, DO NOT AGREE WITH THE TRIBUNAL AND THE HIGH COURT THAT IT WAS NOT NEC ESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSIN G AUTHORITY FOR FRESH ASSESSMENT AFTER GIVING TO THE ASSESSEE A PROPER OP PORTUNITY OF BEING HEARD. TWO QUESTIONS WERE PLACED BEFORE THE HIGH COURT, OF WHICH THE SECOND QUESTION IS NOT PRESSED. THE FIRST QUESTION READS THUS : 1. WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN NOT SETTING ASIDE THE ASSESSMENT ORDER IN SPITE OF A FINDING ARRIVED AT BY IT THAT THE INCOME-TAX OFFICER HAD NOT GIVEN A P ROPER OPPORTUNITY OF HEARING TO THE ASSESSEE ? IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THI S QUESTION WHICH IS INHERENT IN THE QUESTION ITSELF : IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS) AND OF TH E TRIBUNAL ARE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING A UTHORITY FOR FRESH CONSIDERATION, AS AFORESTATED. IN THE LIGHT OF THE JUDGMENT OF HONBLE SUPREME COU RT IN THE CASE OF TIN BOX COMPANY (SUPRA) WE ARE OF THE THAT ONE MORE OPPORTU NITY SHOULD BE GIVEN TO THE ASSESSEE TO PLEAD HIS CASE BEFORE THE ASSESSING OFF ICER. THE LD. DR FOR THE REVENUE HANSA TEXTRADE PVT. LTD. ITA NO.433/KOL/2019 ASSESSMENT YEAR:2015-16 P PP PA AA AG GG GE EE E | || | 4 44 4 DID NOT HAVE ANY OBJECTION IF THE MATTER IS REMITTE D BACK TO THE FILE OF ASSESSING OFFICER. THEREFORE , KEEPING IN MIND THE PRINCIPLE OF NATURAL JUSTICE, WE THINK IT FIT AND APPROPRIATE TO REMIT THIS ISSUE BACK TO THE FIL E OF THE ASSESSING OFFICER, AND HENCE WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMI T THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR DE NOVO ADJUDICATION. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED TO BE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 13.1 1.2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 13/11/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S HANSA TEXTRADE PVT. LTD. 2. ITO, WARD-1(1), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES