M/s Savera Dealmark Pvt. Ltd., Kolkata V. I.T.O.Ward-2(1), Kolkata

ITA 876/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8239 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 22-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside

Judgement Text

1 ITA NO. 876/KOL/2019 SAVERA DEALMARK PVT . LTD., AY- 2012-13 , C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 876/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. SAVERA DEALMARK PVT. LTD. (PAN: AAQCS7159F) VS. INCOME-TAX OFFICER, WD-2(1), KOLKATA APPLICANT RESPONDENT DATE OF HEARING 07.06.2019 DATE OF PRONOUNCEMENT 17.07.2019 FOR THE APPLICANT SHRI SOUMITRA CHOUDHURY, ADVOCATE FOR THE RESPONDENT SHRI SHANKAR HALDER, JCIT, SR. D R ORDER PER SHRI A.T.VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE IS AGAINST TH E ORDER OF THE LD. CIT(A)-5, KOLKATA DATED 15.03.2019 FOR AY 2012-13. 2. THOUGH THE ASSESSEE HAS RAISED AS MANY AS NINE G ROUNDS OF APPEAL, THE FIRST AND FOREMOST ISSUE IS AGAINST THE ACTION OF LD. CIT(A) IN DECIDING THE APPEAL EX PARTE WITHOUT AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 3. AT THE OUTSET ITSELF, THE LD. AR OF THE ASSESSE E BROUGHT TO OUR NOTICE THAT THE AO HAS MADE THE ADDITION BECAUSE THE DIRECTOR OF THE ASSES SE/SHARE SUBSCRIBERS DID NOT COMPLY WITH THE DIRECTION OF THE AO TO APPEAR BEFORE HIM. THER EFORE, THE ADVERSE INFERENCES WERE DRAWN AGAINST THE ASSESSEE AND THE ADDITION WAS MADE. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF AO. ACCORDING TO LD. AR, DURING THE ASSE SSMENT PROCEEDING, SINCE THE DIRECTORS OF THE ASSESSEE/SHARE SUBSCRIBERS WERE NOT IN STATI ON WHEN THE AO DIRECTED THEM TO BE PRESENT, THEY COULD NOT APPEAR BEFORE THE AO AND ON LY ONE OPPORTUNITY WAS GIVEN BY AO. ACCORDING TO LD. AR, SINCE THE AO HAS MADE THE ADDI TION ONLY BECAUSE THE DIRECTORS/SHAREHOLDERS DID NOT TURN-UP BEFORE HIM, AND SINCE THE ASSESSEE IS READY TO COMPLY WITH THE DIRECTION OF AO IF AN OPPORTUNITY IS GIVEN TO THEM BY PRODUCING THE DIRECTOR OF THE ASSESSEE/SHARE SUBSCRIBERS BEFORE THE AO AN OPPORTU NITY MAY BE GRANTED. ACCORDING TO LD. 2 ITA NO. 876/KOL/2019 SAVERA DEALMARK PVT . LTD., AY- 2012-13 AR, THERE WAS NO PROPER OPPORTUNITY GIVEN TO THE AS SESSEE AT THE ASSESSMENT STAGE, THEREFORE, THE LD. AR PRAYS THAT THE MATTER MAY BE REMANDED BA CK TO THE AO. THE LD. DR DOES NOT HAVE ANY OBJECTION IF THE ASSESSEE COOPERATES BEFOR E THE AO BY PRODUCING THE DIRECTORS OF THE ASSESSEE COMPANY/SHARE SUBSCRIBERS AS WELL AS T HE SHAREHOLDERS. 4. WE NOTE THAT DIRECTORS OF THE ASSESSEE COMPANY/S HARE SUBSCRIBING COMPANIES COULD NOT APPEAR BEFORE THE AO BECAUSE THEY WERE OUT OF S TATION. SINCE THE DIRECTORS OF THE ASSESSEE COMPANY/SHARE SUBSCRIBERS AS WELL AS THE S HAREHOLDERS DID NOT TURN UP BEFORE THE AO, HE DREW ADVERSE INFERENCE AGAINST THE ASSESSEE AND MADE THE ADDITION. THE LD. CIT(A) HAS CONFIRMED THE ACTION OF AO BY AN EX PARTE ORDER . HOWEVER, DURING THE HEARING BEFORE US, THE LD. AR HAS BROUGHT TO OUR NOTICE THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS READY TO PRODUCE THE DIRECTORS OF THE ASSESSEE COMPANY/SHARE SUBSCRIBING COMPANIES. SINCE PROPER OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE AT ASSESS MENT STAGE TO ENABLE THE ASSESSEE TO PRODUCE ITS DIRECTORS AND THE SHARE SUBSCRIBERS, WE ARE OF THE OPINION THAT FRESH ASSESSMENT NEEDS TO BE FRAMED BY THE AO. FOR DOING SO, WE RELY ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TIN BOX COMPANY VS. C IT (2001) 249 ITR 216 (SC), WHEREIN THE HONBLE SUPREME COURT 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 R EADS THUS : WE WILL STRAIGHTAWAY AGREE WITH THE ASSESSEES SUB MISSION THAT THE INCOME-TAX OFFICER HAD NOT GIVEN TO THE ASSESSEE PROPER OPPORTUNITY OF BEI NG 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 RE ASONABLE 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. 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 H EARING 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. 3 ITA NO. 876/KOL/2019 SAVERA DEALMARK PVT . LTD., AY- 2012-13 THE APPEALS ARE ALLOWED. THE ORDER UNDER CHALLENGE IS SET ASIDE. THE ASSESSMENT ORDER, THAT OF THE COMMISSIONER (APPEALS) AND OF THE TRIBUNAL A RE ALSO SET ASIDE. THE MATTER SHALL NOW BE REMANDED TO THE ASSESSING AUTHORITY FOR FRESH CO NSIDERATION, AS AFORESTATED. IN THE LIGHT OF THE DISCUSSIONS MADE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMAND THE MATTER BACK TO THE FILE OF AO TO FRAME D E NOVO ASSESSMENT IN ACCORDANCE TO LAW AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEA RD TO THE ASSESSEE AND THE ASSESSEE IS DIRECTED TO DILIGENTLY PARTICIPATE IN THE ASSESSMEN T PROCEEDINGS AND ENSURE THE DIRECTORS APPEAR BEFORE THE AO AS UNDERTAKEN BEFORE US BY THE LD. AR. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17TH JULY , 2019. SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 17TH JULY, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. SAVERA DEALMARK PVT. LTD., 27, WESTERN STREET, 3 RD FLOOR, ROOM NO. 338, BOW BAZAR, KOLKATA-700 012. 2 RESPONDENT ITO, WARD-2(1), KOLKATA 3. 4. CIT(A)-5, KOLKATA (SENT THROUGH E-MAIL) CIT-, , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR