M/s. Appear Distributors Pvt. Ltd., , Kolkata V. ITO, Tech - 2, Kolkata , Kolkata

ITA 649/KOL/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9713 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Set aside
• Section: 143(3); 131

Judgement Text

ITA NO. 649/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. APPEAR DISTRIBUTORS PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT & SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 649/KOL/2018 ASSESSMENT YEAR: 2012-2013 M/S. APPEAR DISTRIBUTORS PVT. LIMITED,............. ...............................APPELLANT 23A, N.S. ROAD, KOLKATA-700001 [PAN: AAICA6440K] -VS.- INCOME TAX OFFICER,................................ ...........................................RESPONDE NT TECH-2, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, FOR THE APPELLANT SHRI JAYANTA KHANRA, JCIT, D.R., FOR THE RESPONDEN T DATE OF CONCLUDING THE HEARING : JUNE 30, 2020 DATE OF PRONOUNCING THE ORDER : JULY 01, 2020 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-23, KOLKATA DA TED 05.12.2016 PASSED EX-PARTE, WHEREBY HE DISMISSED THE APPEAL OF THE ASSESSEE. 2. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION D ECLARING TOTAL INCOME OF RS.2,576/-. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE-COMPANY HAD RAISED SHARE CAPITAL OF RS.1,20,00,000/- INCLUD ING A PREMIUM OF RS.90,00,000/-. DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, SUMMONS UNDER SECTION 131 WERE ISSUED BY THE ASSESSING OFFI CER TO THE DIRECTORS OF THE SHARE SUBSCRIBING COMPANIES IN ORDER TO ASCERTA IN THE GENUINENESS OF ITA NO. 649/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. APPEAR DISTRIBUTORS PVT. LIMITED 2 THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE SH ARE SUBSCRIBING COMPANIES. THE SAID SUMMONS, HOWEVER, REMAINED UN-C OMPLIED WITH. EVEN THERE WAS NO RESPONSE TO THE SUMMONS ISSUED BY THE ASSESSING OFFICER TO THE DIRECTORS OF THE ASSESSEE-COMPANY. I T WAS ALSO NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE-COMPANY HAD NO TRACK RECORD OR ASSET BASE AND IT WAS NEARLY A ZERO BALANCE-SHEET COMPANY WITH NO VISIBLE FUTURE PROSPECT. KEEPING IN VIEW ALL THESE FACTS OF THE CASE AS WELL AS BY RELYING ON THE DECISION OF THE HONBLE SUPREME COUR T IN THE CASE OF CIT VS.- DURGA PRASAD MORE (82 ITR 540) AS WELL AS IN T HE CASE OF SUMATI DAYAL VS.- CIT (214 ITR 801) AND THE DECISION OF K OLKATA BENCH OF ITAT IN THE CASE OF M/S. BISAKHA SALES PVT. LIMITED VS. - CIT, THE ASSESSING OFFICER TREATED THE ENTIRE AMOUNT OF SHARE CAPITAL AND SHARE PREMIUM AGGREGATING TO RS.1,20,00,000/- AS UNEXPLAINED CASH CREDIT AND AN ADDITION TO THAT EXTENT WAS MADE BY HIM TO THE TOTA L INCOME OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 23.03.2015. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) AND SINCE THERE WAS NO SATISFACTORY CO MPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTICES ISSUED BY HIM FIXING THE SAID APPEAL FOR HEARING, THE LD. CIT(APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE VIDE HIS APPELLATE ORDER DATED 05.12.2016 PASSED EX-PART E. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PRE FERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN SUPPORT O F THE PRELIMINARY ISSUED RAISED BY THE ASSESSEE IN THIS APPEAL CHALLE NGING THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PARTE, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THERE WAS NO NOTICE OF HEARING EVER SERVED ON THE ASSESSEE BY THE LD. CIT(APPEALS). HE HAS SUBMIT TED THAT EVEN THOUGH ITA NO. 649/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. APPEAR DISTRIBUTORS PVT. LIMITED 3 THE LD. CIT(APPEALS) IN HIS IMPUGNED ORDER HAS MENT IONED THAT THE NOTICE WAS SENT THROUGH THE NOTICE SERVER AT THE OFFICE PR EMISES OF THE ASSESSEE- COMPANY, WHICH WAS FOUND LOCKED, THERE IS NOTHING T O SHOW THAT ANY NOTICE OF HEARING WAS SENT BY THE LD. CIT(APPEALS) TO THE ASSESSEE BY POST OR THROUGH MAIL. HE HAS SUBMITTED THAT PROPER AND S UFFICIENT OPPORTUNITY OF BEING HEARD THUS WAS NOT EFFECTIVELY GIVEN BY TH E LD. CIT(APPEALS) BEFORE DISMISSING THE APPEAL OF THE ASSESSEE VIDE H IS IMPUGNED ORDER PASSED EX-PARTE AND THERE IS A CLEAR VIOLATION OF P RINCIPLES OF NATURAL JUSTICE. EVEN THE LD. D.R. HAS NOT BEEN ABLE TO DIS PUTE THIS POSITION, WHICH IS CLEARLY APPARENT FROM THE IMPUGNED ORDER OF THE LD. CIT(APPEALS). WE, THEREFORE, CONSIDER IT FAIR AND PROPER AND IN THE I NTEREST OF JUSTICE TO SET ASIDE THE IMPUGNED ORDER PASSED BY THE LD. CIT(APPE ALS) DISMISSING THE APPEAL OF THE ASSESSEE EX-PARTE AND REMIT THE MATTE R BACK TO HIM FOR DISPOSING OF THE APPEAL OF THE ASSESSEE AFRESH ON M ERIT IN ACCORDANCE WITH LAW AFTER GIVING PROPER AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AS UNDERTAKEN BY THE LD. COUNSEL FOR THE ASSESSEE, THE ASSESSEE SHALL MAKE DUE COMPLIANCE BEFORE THE LD. CIT(APPEAL S) AND SHALL EXTEND ALL THE POSSIBLE COOPERATION IN ORDER TO ENABLE THE LD. CIT(APPEALS) TO DISPOSE OF THE APPEAL AFRESH EXPEDITIOUSLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 01, 2020 . SD/- SD/- (A.T. VARKEY) (P.M. JAGTAP) JUDICIAL MEMBER VIC E-PRESIDENT) KOLKATA, THE 1 ST DAY OF JULY, 2020 COPIES TO : (1) M/S. APPEAR DISTRIBUTORS PVT. LIMITED, 23A, N.S. ROAD, KOLKATA-700001 (2) INCOME TAX OFFICER, TECH-2, KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700069 ITA NO. 649/KOL/2018 ASS ESSMENT YEAR: 2012-2013 M/S. APPEAR DISTRIBUTORS PVT. LIMITED 4 (3) COMMISSIONER OF INCOME TAX (APPEALS)-23, KOLKATA; (4) COMMISSIONER OF INCOME TAX- , KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.