TEMPLE PRINTED CARTONS PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER WARD 4(5), THANE

ITA 6960/MUM/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9109 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 08-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AJAY KUMAR KESHARI
• Keywords: Opportunity of being heard; Accommodation entries; Borrowed satisfaction; Set aside
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 6960/MUM/2017 ASSESSMENT YEAR: 2011 - 12 TEMPLE PRINTED CARTONS PRIVATE LIMITED C - 16, ANSA IND ESTATE, SAKI VIHAR ROAD, MUMBAI - 400072. VS. ITO WARD 4(5), THANE, ASHAR IT PAR, 6 TH FLOOR, A WING, ROAD NO. 16 Z , WAGLE ESTATE, THANE (W), 400604. PAN NO. AACCT2244A APPELLANT RESPONDENT ASSESSEE BY : MR. BHUPENDRA SHAH, AR REVENUE BY : MR. AJAY KUMAR KESHARI, DR DATE OF HEARING : 01/10/2018 DATE OF PRONOUNCEMENT : 1 3 /12/2018 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2011 - 12. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 , THANE [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S 147 OF THE INCOME TAX ACT 1961, (THE ACT). 2. THE GROUNDS OF APPEAL REA D AS UNDER: 1) IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN PASSING EX PARTE ORDER ON THE GROUND THAT THE NOTICES TEMPLE PRINTED ITA NO. 6960/MUM/2017 2 COULD NOT BE RECEIVED BY THE APPELLANT US THE APPELLANT WAS NOT AVAILABLE WHERE THE NOTICES WERE SERVED BECAUSE OF CHANGE OF ADDRESS OF THE APPELLANT WITHOUT PREJUDICE TO THE ABOVE AND ALTERNATIVELY A) IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE A.O. ERRED IN PASSING THE ORDER U/S 143(3) R.W.S 147 AND THEREFORE RENDERING THE WHOLE REASSESSMENT BAD IN LAW AND ALSO ON THE BASIS OF BORROWED SATISFACTION, PRESUMPTION AND SURMISES. B) IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED A.O. ERRED IN MAKING AN ADDITION OF RS.64.00,000/ - ON ACCOUNT OF SHARE CAPITAL RECEIVED FROM 2 PARTIES ALTHOUGH THE RELEVANT CONFIRMATION LETTER ALONG WITH THE RELEVANT BANK STATEMENT STATING THE RECEIPT IS ALREADY SUBMITTED IN ASSESSMENT PROCEEDINGS. C) IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED A.O. ERRED IN LEVYING INTEREST U/S 234A , B, C AND D AND INITIATED PENALTY U/S 271(1)(C). 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2011 - 12 ON 22.09.2011 DECLARING TOTA L INCOME OF RS.4,46,576/ - . THE ASSESSING OFFICER (AO) RECEIVED INFORMATION FROM THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT, MUMBAI REGARDING DETAILS OF PERSONS WHO HAVE PROVIDED ACCOMMODATION ENTRIES IN THE FORM OF SHARE CAPITAL/SHARE APPLICATION MONEY. THE AO NOTICED THAT THE INVESTMENTS WERE MADE ON A VERY HIGH PREMIUM WITHOUT ANY BUSINESS RATIONALE OR ANY JUSTIFICATION WHICH WAS DISCLOSED DURING THE SEARCH CARRIED IN SATISH SARAF GROUP. THE ASSESSEE IS ONE OF THE BENEFICIARIES, WHO HAS RECEIVED SUCH SHARE APPLICATION MONEY. THEREFORE, THE AO ISSUED NOTICE U/S 148 ON 27.03.2015. THE AO, ON GOING THROUGH THE DETAILS OBSERVED THAT THE ASSESSEE - COMPANY HAD TEMPLE PRINTED ITA NO. 6960/MUM/2017 3 RECEIVED FUND OF RS.1.84 CRORE IN THE FORM OF SHARE CAPITAL DURING THE YEAR UNDER CONSIDERATION WHICH WAS INVESTED IN THE SISTER COMPANY M/S TEMPLE PACKAGING PVT. LTD. FOR PURCHASING SHARES. THE ASSESSEE - COMPANY HAD RECEIVED RS.14,00,000/ - AND RS.50,00,000/ - FROM THE ENTRY PROVIDER NAMELY M/S MAJESTIC EXIM PVT. LTD. AND M/S SALMON FILM SERVICES PVT . LTD. IN ORDER TO VERIFY THE GENUINENESS OF THE INVESTOR, THE AO ISSUED NOTICE U/S 133(6), WHICH WERE RETURNED BACK BY THE POSTAL AUTHORITY. THE ASSESSEE ALSO FAILED TO REPLY THE SHOW CAUSE NOTICE DATED ISSUED BY THE AO. THEREFORE, THE AO MADE AN ADDITION OF RS.64,00,000/ - IN RESPECT OF THESE TWO PARTIES TO THE TOTAL INCOME OF THE ASSESSEE BY RELYING ON VARIOUS DECISIONS. 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). IT HAS BEEN RECORDED BY THE LD. CIT(A) THAT NOT ICE SENT BY HIS OFFICE DATED 12.01.2017 FIXING THE CASE FOR HEARING ON 30.01.2017 WAS RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARK UNCLAIMED. AGAIN THE NOTICE DATED 31.01.2017 FIXING THE CASE FOR HEARING ON 21.02.2017 WAS RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARK UNCLAIMED. AGAIN THE NOTICE DATED 27.02.2017 FIXING THE CASE FOR HEARING ON 08.03.2017 WAS RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARK UNCLAIMED. HOWEVER, THE NOTICE WAS SUBSEQUENTLY MAILED AND ACKNOWLEDGE MENT BEARING SIGNATURE OF THE RECEIVER IS PLACED ON RECORD. THE LD. CIT(A) HAS NOTED THAT ON 08.03.2017, THE ASSESSEE FILED ADJOURNMENT LETTER AND THE CASE WAS ADJOURNED TO 21.03.2017. HOWEVER, NOBODY ATTENDED ON THE SAID DATE. AGAIN NOTICE DATED 19.06.201 7 WAS ISSUED FIXING THE CASE FOR HEARING ON 10.07.2017. AS RECORDED BY THE LD. CIT(A) , THE SAID NOTICE WAS TEMPLE PRINTED ITA NO. 6960/MUM/2017 4 UNCLAIMED AS REPORTED BY THE POSTAL AUTHORITIES. HOWEVER, NOTICE WAS SERVED VIA E - MAIL PANKA [e-mail] OF THE ASSESSEE. HOWEVER, NOBODY ATTENDED NOR ANY ADJOURNMENT WAS SOUGHT. IN VIEW OF THE REPEATED NON - COMPLIANCE BY THE ASSESSEE, THE LD. CIT(A), REFERRING TO AND RELYING ON THE ORDER OF THE AO, DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS THAT THERE HAS BEEN A CHANGE IN THE ADDRESS OF THE ASSESSEE, WHICH IS CLEAR FROM THE LETTER ISSUED BY THE INCOME TAX PAN SERVICES UNIT (MANAGED BY UTI INFRASTRUCTURE & SERVICES LTD.) . IT IS STATED BY HIM THAT AS PER THE ABOVE LETTER, THE CORRECT ADDRESS OF THE ASSESSEE - COMPANY IS AS UNDER: M/S TEMPLE PRINTED CARTONS PRIVATE LIMITED C - 16, ANSA INDUSTRIAL ESTATE, SAKI NAKA SAKI VIHAR ROAD, ANDHERI EAST MAHARASHTRA, DIST - MUMBAI - 400072 . THE LD. COUNSEL SUBMITS THAT THE NOTICES ISSUED BY THE LD. CIT(A) IN THE OLD ADDRESS EC - 127/101, SECTOR 4, EVERSHINE AVENUE, EVERSHINE CITY, VASAI (E), THANE, 401208 COULD NOT BE SERVED ON THE ASSESSEE AND THE REMAINED UNCLAIMED. IT IS THUS SUBMITTED BY HIM THAT THE ASSESSEE MAY BE GIVEN ANOTHER CHANCE TO APPEAR BEFORE THE LD. CIT(A) AND EXPLAIN ITS CASE. 6. ON THE OTHER HAND, THE LD. DR SUBMITS THAT REASONABLE OPPORTUNITY WAS GIVEN BY THE LD. CIT(A) AND THERE IS NO NEED TO RESTOR E THE MATTER TO THE FILE OF THE FIRST APPELLATE A UTHORITY. THUS THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). TEMPLE PRINTED ITA NO. 6960/MUM/2017 5 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THERE HAS BEEN A CHANGE IN THE ADDRESS OF THE ASSESSEE - COMPANY AS MENTIONED IN THE LETTER OF THE INCOME TAX PAN SERVICES UNIT, CBD BELAPUR, NAVI MUMBAI. AND BECAUSE O F THIS CHANGE IN ADDRESS, POSSIBLY, SOME NOTICES ISSUED BY THE LD. CIT(A) FIXING THE CASE FOR HEARING COULD NOT BE SERVED ON THE ASSESSEE - COMPANY BY THE POSTAL AUTHORITY. IN SUCH A SITUATION, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE IS ENTITLED FO R A PROPER HEARING BEFORE THE FIRST APPELLATE AUTHORITY . THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO HIM TO DECIDE THE APPEAL ON MERIT AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO APPEAR , WITHOUT FAIL, BEFORE THE LD. CIT(A) IN RESPONSE TO THE NOTICE TO BE SENT FIXING THE CASE FOR HEARING AND FILE THE RELEVANT DOCUMENTS/EVIDENCE BEFORE HIM. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 /12/2018. SD/ - SD/ - (MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 13 /12/2018 RAHUL SHARMA, SR. P.S. TEMPLE PRINTED ITA NO. 6960/MUM/2017 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI