M/s Varun Barter Pvt. Ltd., Sodepur V. I.T.O.,Ward-14(4), Kolkata

ITA 878/KOL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8241 (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: B
• 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
• Section: 131

Judgement Text

1 ITA NO. 878/KOL/2019 M/S. VARUN BARTER P VT. LT., AY- 2012-13 , B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 878/KOL/2019 ASSESSMENT YEAR: 2012-13 M/S. VARUN BARTER PVT. LTD. (PAN: AADCV8719M) VS. INCOME-TAX OFFICER, WD-14(4), 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 25.02.2019 FOR AY 2012-13. 2. THOUGH THE ASSESSEE HAS RAISED AS MANY AS EIGHT GROUNDS 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 SEE COMPANY AS WELL AS THE SHAREHOLDERS/SUBSCRIBERS DID NOT COMPLY WITH THE D IRECTION OF THE AO TO APPEAR BEFORE HIM. HE ALSO BROUGHT TO OUR NOTICE THAT SEC. 131 SUMMON WAS ONLY SENT SUMMONING THE DIRECTORS OF THE ASSESSEE COMPANY WHICH AO STATES AT PAGE 8 O F THE ASSESSMENT ORDER BUT NOT TO THE SHAREHOLDERS/SUBSCRIBERS. FAILURE OF THE DIRECTOR O F THE ASSESSEE COMPANY WAS THE ONLY REASON WHICH PROMPTED THE AO TO DRAW THE ADVERSE IN FERENCES AGAINST THE ASSESSEE AND THE ADDITION WAS MADE WHEN ALL DOCUMENTS WERE PRODUCED BEFORE THE AO. ON APPEAL, THE LD. CIT(A) CONFIRMED THE ACTION OF AO. ACCORDING TO LD . AR, DURING THE ASSESSMENT PROCEEDING SINCE THE DIRECTOR OF THE ASSESSEE COMPA NY WAS NOT IN STATION, THEY COULD NOT APPEAR BEFORE THE AO. ACCORDING TO LD. AR, SINCE TH E AO HAS MADE THE ADDITION ONLY 2 ITA NO. 878/KOL/2019 M/S. VARUN BARTER P VT. LT., AY- 2012-13 BECAUSE THE DIRECTORS DID NOT TURN-UP BEFORE HIM, A ND THE ASSESSEE IS READY TO COMPLY WITH THE DIRECTION OF AO IF AN OPPORTUNITY IS GIVEN. SI NCE THERE WAS NO PROPER OPPORTUNITY GIVEN TO THE ASSESSEE, THE LD. AR PRAYS THAT THE MATTER M AY BE REMANDED BACK TO THE AO. THE LD. DR DOES NOT HAVE ANY OBJECTION IF THE ASSESSEE COMP LIES DILIGENTLY WITH THE INQUIRY MADE BY THE AO AND ALSO BY PRODUCING THE DIRECTOR OF THE AS SESSEE COMPANY AS WELL AS THE SHARE SUBSCRIBERS BEFORE THE AO. 4. WE NOTE THAT DIRECTORS OF THE ASSESSEE COMPANY C OULD NOT APPEAR BEFORE THE AO BECAUSE THEY WERE OUT OF STATION. SINCE THE DIRECT ORS OF THE ASSESSEE COMPANY 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 NO TICE THAT GIVEN AN OPPORTUNITY THE ASSESSEE IS READY TO PRODUCE THE DIRECTORS OF THE S HARE SUBSCRIBING COMPANIES. IN THE AFORESAID CIRCUMSTANCES, WE ARE OF THE OPINION THAT SINCE ASSESSEE DID NOT GET PROPER OPPORTUNITY DURING THE ASSESSMENT STAGE, THE ASSESS EE SHOULD BE GIVEN ONE MORE OPPORTUNITY BEFORE THE AO. THEREFORE, RELYING ON THE DECISION O F THE HONBLE SUPREME COURT IN THE CASE OF TIN BOX COMPANY VS. CIT (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 ? 3 ITA NO. 878/KOL/2019 M/S. VARUN BARTER P VT. LT., AY- 2012-13 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. 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. WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AN D REMAND THE MATTER BACK TO THE FILE OF AO TO FRAME DE NOVO ASSESSMENT AFTER AFFORDING REASONA BLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE ASSESSEE TO DILIGENTLY PARTICIPATE IN THE ASSESSMENT PROCEEDINGS AND ENSURE THAT UNDERTAKING TAKEN BEFORE US IS COMPLIED WITH. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2019. SD/- SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 17 TH JULY, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT M/S. VARUN BARTER PVT. LTD., C/O BIJ OY CHAKLANABISH, NEAR GOLPARK, TARUNPALLY, P.O. NATAGARH, SODEPUR, NORTH 24 PARGANAS, W.B 700013. 2 RESPONDENT ITO, WARD-14(4), 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