Visa Sales Pvt. Ltd., Kolkata V. A.O. Ward 1(3), Kolkata

ITA 526/KOL/2021

AI Insights

The case involves Visa Sales Pvt. Ltd, which appealed against the order of the Commissioner of Income Tax (Appeals)-19, Kolkata, confirming the addition made under section 68 of the Income Tax Act, 1961, regarding share capital and share premium. The Tribunal noted that the assessee was not given a proper opportunity to present its case before the CIT(A), as the notice was not served by the postal authorities. The Tribunal, considering the circumstances and the Supreme Court's directive on exclusion of time due to COVID-19, condoned the delay in filing the appeal and remitted the matter back to the CIT(A) for a detailed examination and a reasoned order.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 125315 (ITAT-KOLKATA)
• Duration Of Justice: 11 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: C
• Next Hearing Date: 08-11-2022
• Assessment Year: misc
• Appeal Filed On: 28-09-2011
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Period of limitation; Reasonable cause; Capital receipt; Time period of passing order
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA Before Shri Rajpal Yadav, Vice-President and Shri Manish Borad, Accountant Member I.T.A. No.526/Kol/2021 Assessment Year: 2011-12 Visa Sales Pvt. Ltd........................................................................Appellant 12, Waterloo Street, Kolkata-700069. [PAN: AADCV1161H] vs. A.O, Ward-1(3), Kolkata..............................................................Respondent Appearances by: Shri Narayan Gupta, AR, appeared on behalf of the appellant. Smt. Ranu Biswas, Addl. CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : November 09, 2022 Date of pronouncing the order : December 21, 2022 ORDER Per Manish Borad, Accountant Member: This appeal filed by the assessee pertaining to assessment year 2011-12 is directed against the order of the ld. Commissioner of Income Tax(Appeals)-19, Kolkata [hereinafter referred to as ‘CIT(A)’] dated 06.03.2018 is arising out of the order u/s 143(3) of the Act dated 29.03.2014 passed by ITO, Ward-1(3), Kolkata. 2. The Registry has informed that this appeal is time barred by 968 days. On going through the condonation application in the form of affidavit, and after hearing both the parties, we find that this delay is accountable for two reasons. Firstly, the impugned order of the CIT(A) is dated 06.03.2018 and the assessee has not received the order on time. Secondly, the period of delay occurred on account of lockdown in the State due to outbreak of Covid-19. In view of the reasons stated in the affidavit for condonation of delay and also the extension of limitation period by Hon’ble Supreme Court in Suo Moto Writ Petition (Civil) No.3 of 2020 dated 10.01.2022 by which the period from 15.03.2020 to 28.02.2022 has been directed to be excluded for the purpose of limitation and a further period of 90 days has been granted for providing the limitation from 01.03.2022, we, therefore, condone the delay in filing this appeal and admit the same for adjudication. Visa Sales Pvt. Ltd I.T.A. No.526/Kol/2021 Assessment Year: 2011-12 2 3. The assessee has raised the following grounds of appeal: “1. The Ld CIT (A) erred in confirming the addition made by A.O u/s section 68, on account of share capital raised by Appellant to the tune of Rs.56848000/- including premium, which could have been adjudicated by him on merit. 2. The Ld CIT(A) failed to take cognizance of the materials produced before A.O to establish the identity, creditworthiness and genuineness. 3. The Ld CIT(A) erred in confirming the high pitched assessment at Rs.5,68,53,525 against returned income of Rs. 5525. 4. The Ld CIT(A) failed to appreciate that receipt of premium is capital receipt which could not have been treated as income. He also failed to appreciate that proviso to section is prospective . 5. Appellant craves to add, modify, delete all/any ground before or at time of hearing.” 4. At the outset, the ld. counsel for the assessee submitted that assessee failed to get proper opportunity to plead its case before the ld. CIT(A). Only once, a notice was sent but the same was not served upon the assessee by the postal authorities. Prayer was made to restore the issue raised on merits to the ld. CIT(A) for afresh adjudication. 5. The ld. Departmental Representative opposed this request made by the ld. counsel for the assessee. 6. We have heard the rival contentions and perused the records placed before us. We observe that the assessee which is a private limited company was subjected to scrutiny assessment and during the course of assessment proceedings, it had failed to satisfy the A.O about the source of share capital and share premium to the tune of Rs.5,68,48,000/-. When the addition made u/s 68 of the Act was challenged by the assessee before the ld. CIT(A), after being granted one opportunity, the case of the assessee was decided by the ld. CIT(A) without giving any detailed finding and summarily dismissing the assessee’s appeal, and confirmed the addition made u/s 68 of the Act. 7. However, looking to the facts and circumstances of the case and prayer made by the ld. counsel for the assessee, we, in the interest of justice and being fair to both the parties, remit the issue raised on merits about the alleged unexplained cash credit of share capital and share premium to the tune of Rs.5,68,48,000/- to the ld. CIT(A) for Visa Sales Pvt. Ltd I.T.A. No.526/Kol/2021 Assessment Year: 2011-12 3 afresh adjudication and to pass a speaking order after considering the submissions and evidences to be filed by the assessee on being provided sufficient opportunity of being heard. We further direct the assessee to remain compliant and not to take adjournment unless and otherwise required for reasonable cause and if assessee fails to appear on the first two dates of hearing without giving any reasonable cause then the ld. CIT(A) can proceed to decide the appeal in accordance with law. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 21 st December, 2022. Sd/- Sd/- [Rajpal Yadav] [Manish Borad] Vice-President Accountant Member Dated: 21.12.2022. RS Copy of the order forwarded to: 1. Visa Sales Pvt. Ltd 2. A.O, Ward-1(3), Kolkata 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches