Adarsh Heights Private Limited, Kolkata V. ITO, Ward 2(2), Kolkata, Kolkata

ITA 864/KOL/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2391 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 27-04-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Assessee Lawyers: R P AGARWAL; NIRAV SHETH ACA
• Keywords: Opportunity of being heard; Reassessment proceedings; Set aside
• Section: 263

Judgement Text

1 ITA NO 864/KOL/2017 ADARSH HEIGHTS PVT. LTD , AY-2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOLKATA ( ) BEFORE . . , /AND . , ) [BEFORE SHRI A. T. VARKEY, JM & SHRI M. BALAGANESH, AM] I.T.A. NO. 864/KOL/2017 ASSESSMENT YEAR: 2012-13 ADARSH HEIGHTS PVT. LTD. (PAN: AAJCA3954F) VS. INCOME-TAX OFFICER, WD-2(2), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 03.04.2019 DATE OF PRONOUNCEMENT 21.06.2019 FOR THE APPELLANT S/SHRI R. P. AGARWAL, ADVOCATE & NIRAV SHETH, ACA FOR THE RESPONDENT DR. P. K. SRIHARI, CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-9, KOLKATA DATED 28.02.2017 FOR AY. 2012-13. 2. AT THE OUTSET, IT HAS BEEN BROUGHT TO OUR NOTICE BY THE LD. COUNSEL THAT THE IMPUGNED ORDER IS AN EX PARTE ORDER PASSED BY THE LD. CIT(A) AND MOREOVER IT HAS BEEN PASSED BY A CRYPTIC ORDER WITHOUT GOING INTO MERITS OF THE CASE. IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE LD. CIT(A) HAS PASSED THE EX PARTE ORDER TAKING NOTE THAT NONE APPEARED FOR ASSESSEE ON THREE OCCASIONS. HOWEVER, THE LD. AR DREW OUR ATTENTION TO PAGES 1-2, 3-5 AND 6-9 OF THE PAPER BOOK II WHEREIN HE PROMPTLY MOVED ADJOURNMENT APPLICATION BEFORE THE LD. CIT(A) SEEKING ADJOURNMENT OF HEARING. FURTHER ACCORDING TO LD. COUNSEL, EVEN THE AO PASSED THE ASSESSMENT ORDER WITHOUT GIVING PROPER OPPORTUNITY TO THE ASSESSEE. IT WAS BROUGHT TO OUR NOTICE BY THE LD. COUNSEL THAT THE AO PASSED THE REASSESSMENT ORDER ON 10.03.2015. HOWEVER, THE LD. AR DREW OUR ATTENTION TO PAGE 54 OF THE PAPER BOOK WHICH REVEALS THAT A LETTER WAS WRITTEN BY ASSESSEE ON 04.03.2015 TO THE AO, WD-2(2), KOLKATA, WHICH CONTAINED 2 ITA NO 864/KOL/2017 ADARSH HEIGHTS PVT. LTD , AY-2012-13 DOCUMENTS I.E. NECESSARY TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF SHARE SUBSCRIBERS. ACCORDING TO LD. COUNSEL, THE LD. AR OF THE ASSESSEE WENT ALONG WITH THE LETTER DATED 04.03.2015 TO THE OFFICE OF THE ITO ON 05.03.2015 AND 06.03.2015 AND SINCE THE CONCERNED OFFICER WAS NOT FOUND IN THE OFFICE, HE COULD NOT DELIVER THE SAME AND NEXT DAYS BEING HOLIDAYS I.E. 07.03.2015 & 08.03.2015 BEING SATURDAY AND SUNDAY THE OFFICE WAS CLOSED. ACCORDING TO LD. COUNSEL ON 09.03.2015 THE OFFICE OF THE ITO REFUSED TO ACCEPT THE DOCUMENTS ENCLOSED WITH LETTER DATED 04.03.2015 AND, THEREFORE, THE LD. AR OF THE ASSESSEE WAS COMPELLED TO SEND IT BY SPEED POST ON 11.03.2015 AND BROUGHT TO OUR NOTICE THE SPEED POST AFFIXATION. ACCORDING TO LD. COUNSEL, SINCE THE AO PASSED THE ASSESSMENT ORDER IN A HURRY ON 10.03.2015 ONLY ON THE REASON THAT THE DETAILS OF THE SHAREHOLDERS WERE NOT AVAILABLE AND SINCE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHAREHOLDERS ARE VERIFIABLE THE AO DREW THE ADVERSE INFERENCE AGAINST THE ASSESSEE. THE AFFIDAVIT OF THE LD. ARS OFFICE TO SUBSTANTIATE THAT THEY HAD MADE ALL ENDEAVOUR TO PRODUCE THE DOCUMENTS TO THE ITO FROM 05.03.2015 TO 10.03.2015 HAS BEEN PLACED ON RECORD AND HAS BEEN PERUSED BY US. SO, IN THE LIGHT OF THE AFORESAID FACTS, WE FIND FORCE IN THE SUBMISSION OF THE LD. AR THAT NO PROPER OPPORTUNITY THE ASSESSEE GOT DURING THE REASSESSMENT PROCEEDINGS BEFORE THE AO. SINCE PROPER OPPORTUNITY WAS NOT GIVEN TO ASSESSEE BY AO DURING THE REASSESSMENT PROCEEDINGS, WE ARE OF THE OPINION THAT ASSESSEE SHOULD GET PROPER OPPORTUNITY BEFORE THE AO DURING REASSESSMENT PROCEEDINGS. THE HONBLE (THREE JUDGE BENCH) OF THE HONBLE SUPREME COURT IN TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC) HAS HELD AS UNDER: 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 AUTHORITY, THAT READS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUBMISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY 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 ASSESSEE 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 NECESSARY TO SET ASIDE THE ORDER OF ASSESSMENT AND REMAND THE MATTER TO THE ASSESSING AUTHORITY FOR FRESH ASSESSMENT AFTER GIVING TO THE ASSESSEE A PROPER OPPORTUNITY OF BEING HEARD. 3 ITA NO 864/KOL/2017 ADARSH HEIGHTS PVT. LTD , AY-2012-13 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 PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE ? IN OUR OPINION, THERE CAN ONLY BE ONE ANSWER TO THIS 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 THE TRIBUNAL ARE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FOR FRESH CONSIDERATION, AS AFORESTATED. 3. IN SIMILAR CASE THIS TRIBUNAL IN ITA NO.393/KOL/2016 IN M/S. STAR GRIHA (P) LTD. VS. ITO FOR AY 2008-09 DATED 15.12.2017 HAS OBSERVED AS UNDER:- WE ALSO NOTE THAT THE LD. CIT AFTER LOOKING INTO THE PERNICIOUS PRACTICE OF CONVERTING BLACK MONEY INTO WHITE MONEY HAS GIVEN THE GUIDELINES TO AO AS TO HOW THE INVESTIGATION SHOULD BE CONDUCTED TO FIND OUT THE SOURCE. SINCE SIMILAR ORDER OF THE LD. CIT PASSED U/S. 263 OF THE ACT HAS BEEN UPHELD BY THE TRIBUNAL AS WELL AS BY THE HONBLE CALCUTTA HIGH COURT AS WELL AS THE SLP HAS BEEN DISMISSED BY THE HONBLE SUPREME COURT, SIMILAR ORDER OF THE LD. CIT HAS TO BE GIVEN EFFECT TO AS DIRECTED BY THE LD. CIT. WE TAKE NOTE THAT THE LD. CIT WITH HIS EXPERIENCE AND WISDOM HAS GIVEN CERTAIN GUIDELINES IN THE BACKDROP OF BLACK MONEY MENACE SHOULD HAVE BEEN PROPERLY ENQUIRED INTO AS DIRECTED BY HIM. THE AO OUGHT TO HAVE FOLLOWED THE INVESTIGATING GUIDELINES AND METHOD AS DIRECTED BY HIM TO UNEARTH THE FACTS TO DETERMINE WHETHER THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE SHARE SUBSCRIBERS. WE NOTE THAT THE HONBLE SUPREME COURT (THREE JUDGES BENCH) IN THE CASE OF TIN BOX, (SUPRA), HAS HELD THAT SINCE THERE WAS LACK OF OPPORTUNITY TO THE ASSESSEE AT THE ASSESSMENT STAGE ITSELF, THE ASSESSMENT NEEDS TO BE DONE AFRESH AND THEREBY REVERSED THE HONBLE HIGH COURT, TRIBUNAL AND CIT(A)S ORDERS AND REMANDED THE MATTER BACK TO AO FOR FRESH ASSESSMENT. SO, SINCE THERE WAS LACK OF OPPORTUNITY AS AFORESTATED IT HAS TO GO BACK TO AO. 4. WE ALSO NOTE THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING & MARKETING PVT. LTD. IN ITA NO. 525/2014 DATED 11.03.2015 WHEREIN AFTER NOTICING INADEQUATE ENQUIRY BY AUTHORITIES BELOW HAVE HELD AS UNDER: 41. WE ARE INCLINED TO AGREE WITH THE CIT(APPEALS), AND CONSEQUENTLY WITH ITAT, TO THE EXTENT OF THEIR CONCLUSION THAT THE ASSESSEE HEREIN HAD COME UP WITH SOME PROOF OF IDENTITY OF SOME OF THE ENTRIES IN QUESTION. BUT, FROM THIS INFERENCE, OR FORM THE FACT THAT THE TRANSACTIONS WERE THROUGH BANKING CHANNELS, IT DOES NOT NECESSARILY FOLLOWING THAT SATISFACTION AS TO THE CREDITWORTHINESS OF THE PARTIES OR THE GENUINENESS OF THE TRANSACTIONS IN QUESTION WOULD ALSO HAVE BEEN ESTABLISHED. 42. THE AO HERE MAY HAVE FAILED TO DISCHARGE HIS OBLIGATION TO CONDUCT A PROPER INQUIRY TO TAKE THE MATTER TO LOGICAL CONCLUSION. BUT CIT(APPEALS), HAVING NOTICED WANT OF PROPER INQUIRY, COULD NOT HAVE CLOSED THE CHAPTER SIMPLY BY ALLOWING THE APPEAL AND DELETING THE 4 ITA NO 864/KOL/2017 ADARSH HEIGHTS PVT. LTD , AY-2012-13 ADDITIONS MADE. IT WAS ALSO THE OBLIGATION OF THE FIRST APPELLATE AUTHORITY, AS INDEED OF ITAT, TO HAVE ENSURED THAT EFFECTIVE INQUIRY WAS CARRIED OUT, PARTICULARLY IN THE FACT OF THE ALLEGATIONS OF THE REVENUE THAT THE ACCOUNT STATEMENTS REVEAL UNIFORM PATTERN OF CASH DEPOSITS OF EQUAL AMOUNTS IN THE RESPECTIVE ACCOUNTS PRECEDING THE TRANSACTIONS IN QUESTION. THIS NECESSITATED A DETAILED SCRUTINY OF THE MATERIAL SUBMITTED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION148 ISSUED BY THE AO, AS ALSO THE MATERIAL SUBMITTED AT THE STAGE OF APPEALS, IF DEEMED PROPER BY WAY OF MAKING OR CAUSING TO BE MADE A 'FURTHER INQUIRY IN EXERCISE OF THE POWER UNDER SECTION 250(4). HIS APPROACH NOT HAVING BEEN ADOPTED, THE IMPUGNED ORDER OF ITAT, AND CONSEQUENTLY THAT OF CIT(APPEALS), CANNOT BE APPROVED OR UPHELD.' 5. IN VIEW OF THE AFORESAID ORDER AND IN THE LIGHT OF THE HONBLE SUPREME COURTS DECISION IN TIN BOX COMPANY (SUPRA) AND TAKING NOTE OF HONBLE DELHI HIGH COURTS ORDER IN JANSAMPARK ADVERTISING & MARKETING PVT. LTD. (SUPRA) AND ON THE FACTS DISCUSSED (SUPRA), WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND REMAND THE MATTER BACK TO THE FILE OF AO FOR DE NOVO ASSESSMENT AND TO DECIDE THE MATTER IN ACCORDANCE TO LAW AFTER GIVING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 21 JUNE, 2019. SD/- SD/- (M. BALAGANESH) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 21 JUNE, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. ADARSH HEIGHTS PVT. LTD., GULMOHAR COOPERATIVE HOUSING SOCIETY LTD., 6C, MIDDLETON STREET, KOLKATA-700 071. 2 RESPONDENT ITO, WARD-2(2), KOLKATA. 3. 4. CIT(A)-9, KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) 5 ITA NO 864/KOL/2017 ADARSH HEIGHTS PVT. LTD , AY-2012-13 / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR