M/S. EXCELSIOR SERVICES PVT. LTD., Kolkata V. ITO, WARD-8(2), KOLKATA, Kolkata

MA 142/KOL/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9078 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 25-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROBIN CHOUDHURY CIT LD
• Assessee Lawyers: A K TULSIAN FCA LD
• Keywords: Opportunity of being heard; Set aside
• Section: 133(6); 201

Judgement Text

1 MA. NO. 142/KOL/2019 M/S. EXCELSIOR SERVICES P.LTD. IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH , KOLKATA [BEFORE SHRI A.T. VARKEY , J M & SHRI (DR.) ARJUN LAL SAINI, AM ] M .A NO . 142 /KOL/201 9 A/O ITA NO . 911/KOL/2017 A.Y 2012 - 13 M/S. EXCELSIOR SERVICES PVT. LTD PAN: AAACE73 81H VS. I.T.O W 9(2), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 19.07. 2019 DATE OF PRONOUNCEMENT 27 .09.2019 FOR THE APPELLANT SHRI A.K. TULSIAN, FCA, LD.AR FOR THE RESPONDENT SHRI ROBIN CHOUDHURY, ADDL. CIT,LD.SR.DR & SHRI RADHEY SHYA M, CIT, LD. SR. D R ORDER PER SHRI A.T. VARKEY, JM TH IS MISCELLANEOUS APPLICATION IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THIS TRIBUNAL DT. 03 - 06 - 2019. 2. THE MAIN GRIEVANCE OF THE ASSESSEE IS THAT WHEN THE MATTER WAS HEA RD ON 4/4/2019 , THE TRIBUNAL AFTER HEARING BOTH THE LEARNED AR OF THE ASSESSEE AS WELL AS LEARNED DR OF THE DEPARTMENT, THE BENCH MADE OBSERVATION THAT S INCE THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO DURING THE ASSESSMENT STAGE, THE MATTE R WOULD BE SET ASIDE BACK TO THE FILE OF THE AO FOR FRAMING DEN E VO ASSESSMENT . HOWEVER, WHEN THE IMPUGNED ORDER WAS PRONOUNCED ON 03 - 06 - 2019 , THE ASSESSEE WAS SURPRISED TO SEE THAT THE T RIBUNAL REMANDED THE MATTER BACK TO LD. CIT(A) FOR FRESH ADJUDICATI ON OF THE APPEAL . AND THE ASSESSEE HAS PREFERRED THIS M.A WITH THE PRAYER THAT AS OBSERVED BY THE BENCH AFTER HEARING THE APPEAL, THE MATTER MAY BE RESTORED TO THE AO. 3. THEREFORE, I N ORDER TO ASCERTAIN THE FACT AS TO WHETHER WE HAD MADE SUCH AN OBSERVAT ION WHEN THE MATTER /APPEAL OF ASSESSEE WAS HEARD FINALLY ON 04 - 04 - 2019 , W E CHECKED UP THE LOG BOOK WRITINGS DT. 04 - 04 - 2019 AND WE NOTE THAT WE HAVE IN FACT MADE A 2 MA. NO. 142/KOL/2019 M/S. EXCELSIOR SERVICES P.LTD. RECORDING /WRITING IN OUR LOG BOOK REGISTER THAT THE ISSUE NEEDS TO BE RESTORED BA CK TO THE AO FOR DE - N O VA ASSESSMENT . 4. WE NOTE THAT WHILE ARGUING THE APPEAL ON 4 - 4 - 2019 THE LEARNED AR OF THE ASSESSEE HAD BROUGHT TO OUR NOTICE AN AFFIDAVIT DT. 2 - 4 - 2019 , FILED BY SHRI VIKASH RUNGTA, DIRECTOR OF THE ASSESSEE HEREIN, M/S. EXCELSIOR S E RVI C ES PVT. LTD . , ( WHICH HAD BEEN DULY NOTORISED ) BY STATING AS UNDER: - 1. THAT AT PRESENT, I AM A DIRECTOR OF M/S. EXCELSIOR SERVICES PVT. LTD., WELL CONVERSANT WITH THE FACTS OF THE CASE AND HENCE COMPETENT TO SWEAR THIS AFFIDAVIT. 2. THAT IN THE INSTANT CA SE, THE ADDITION HAS BEEN MADE ON ACCOUNT OF SHARE APPLICATION MONEY RECEIVED BY THE COMPANY OF RS.4,23,00,000/ - 3. THAT, THE COMPANY BELONGS TO THE 'SAI GROUP'. THE SHARE APPLICATION MONEY HAS BEEN RECEIVED BY THE ASSESSEE COMPANY FROM THE COMPANIES BELON GING TO THE SAME GROUP. 4. THAT, MRS. PRITI AGARWAL ALONG WITH HER SISTER - IN - LAW MRS. VIBHA AGARWAL AND MOTHER - IN - LAW MRS. SABITA AGARWAL WERE COMMON DIRECTOR IN MOST OF THE SHARE APPLICANT COMPANIES AN DIRECTOR OF THE ASSESSEE COMPANY DURING THE RELEVAN T YEAR AS WELL AS NOW. THIS FACT CONFIRMS THAT ALL THE COMPANIES ARE GROUP COMPANIES. 5. THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, I ATTENDED THE HEARINGS BEFORE THE AO AND SUBMITTED ALL THE DETAILS AS REQUISITIONED BY HIM. ALSO, NOTICES U/S 1 33(6) WERE ISSUED TO ALL THE APPLICANT COMPANIES AND REPLIES WERE SUBMITTED BEFORE HIM BY THE RESPECTIVE COMPANIES. 6. THAT THE AO DURING THE ASSESSMENT PROCEEDINGS HAVE ASKED TO PRODUCE THE DIRECTORS OF THE APPLICANT COMPANIES. 'HOWEVER, DUE TO TIME CONSTRAINT AND SINCE THE DIRECTOR WAS OUT OF STATION THE SAME WAS NOT POSSIBLE AND THIS FACT WAS INTIMATED TO THE AO VIDE OUR LETTER DATED 24.02.2015. 7. THAT, THE A O DURING THE ASSESSMENT PROCEEDINGS DID NOT CONSIDER THE REPLY AND DOCUMENTS SUBMITTED BY THE SHARE APPLICANT COMPANIES AND PASSED THE ORDER MAKING GENERALISED ASSUMPTIONS AND RELYING ON VARIOUS CASE LAWS: 8. THAT, A SEARCH & SEIZURE OPERATION WAS ALSO CONDUCTED ON THE 'SAI GROUP' ON 09.06.2016. THE. ASSESSEE COMPANY AND SOME OF THE A PPLICANT COMPANIES WERE ALSO COVERED UNDER THE SAID SEARCH AND THEIR ASSESSMENTS HAVE BEEN COMPLETED U / S 153A. 9. THAT, IN VIEW OF THE ABOVE DISCUSSION, IT IS HUMBLY PRAYED BEFORE THE HON'BLE BENCH THAT CONSIDERING THE ABOVE MENTIONED FACTS, IF THE MA TTER MAY BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION SINCE THE A O HAS NOT CONSIDERED THE DOCUMENTS SUBMITTED BEFORE HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ALSO, THE DIRECTORS OF THE APPELLANT COMPANY ARE ALSO READY TO APPEAR BEFORE HIM IF HE REQUIRES SO. 10. THAT THE PETITIONER SHALL BE DUTY BOUND TO COMPLY WITH THE DIRECTIONS OF THE HON'BLE BENCH. 5. FROM A PERUSAL OF THE AFORESAID AFFIDAVIT AND WHILE ARGUING THE APPEAL, THE LD.AR BROUGHT TO OUR NOTICE T HAT THE DIRECTOR OF THE ASSESSEE CO M PANY BELONGS TO SAI GROUP AND 3 MA. NO. 142/KOL/2019 M/S. EXCELSIOR SERVICES P.LTD. SHARE APPLICATION MONEY HAS BEEN RECEIVED BY THE ASSESSEE FROM THE COMPANIES BELONGING TO THE SAME G ROUP . THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE DIRECTOR ( SHRI VIKASH RUN GTA ) HAD IN FACT ATTENDED THE HEARINGS BEFORE THE AO AND HAD SUBMITTED ALL THE DETAILS AS REQUISITIONED BY THE A.O . ACCORDING TO SAID DIRECTOR , THE NOTICES ISSUED U/S. 133(6) OF THE ACT THE AO HAD BEEN DULY REPLIED BY THE RESPECTIVE SHARE APPLICANTS. HO WEVER, THE AO HAS TAKEN AN ADVERSE VIEW SINCE DIRECTORS OF THE SHARE APPLICANT COMPANIES DID NOT APPEAR BEFORE THE AO . SINCE THE S HARE APPLICANTS BELONG TO THE SAME G ROUP , THE DIRECTORS ARE ALSO COMMON . IT WAS BROUGHT TO OUR NOTICE T HAT, MRS. PRITI AGARWA L ALONG WITH HER SISTER - IN - LAW MRS. VIBHA AGARWAL AND MOTHER - IN - LAW MRS. SABITA AGARWAL WERE COMMON DIRECTOR S IN MOST OF THE SHARE APPLICANT COMPANIES AS WELL AS DIRECTOR OF THE ASSESSEE COMPANY DURING THE RELEVANT YEAR AS WELL AS NOW ALSO . TH ESE FACT S AC CORDING TO LD.AR CONFIRMS THAT ALL THE COMPANIES (SHARE SUBSCRIBING AS WELL AS ASSESSEE COMPANY) ARE G ROUP COMPANIES . ACCORDING TO THE LD.AR , DIRECTORS OF THE SHARE SUBSCRIBING COMPANY(IES) COULD NOT APPEAR BEFORE THE AO ONLY BECAUSE THEY WERE OUT OF STA TION AND HAS UNDERTAKEN TO APPEAR BEFORE THE AO GIVEN AN OPPORTUNITY . 6. WE NOTE THAT LD. CIT(A) IN THIS CASE HAS PASSED AN EX PARTE ORDER WITHOUT GOING TO THE MERITS OF THE CASE. DURING THE HEARING BEFORE US, THE LD.AR HAS BROUGHT THE AFORESAID FACTS TO OUR NOTICE. HOWEVER, WHEN THE DICTATION WAS GIVEN AFTER 2 MONTHS (APPROX.) THE LOG BOOK ON WHICH THE FACTS HAS BEEN RECORDED DURING THE HEARING HAS NOT BEEN TAKEN INTO CONSIDERATION WHILE PASSING THE IMPUGNED ORDER, WHICH HAS RESULTED IN THE MISTAKE APP ARENT FROM RECORD IN THE IMPUGNED ORDER WHICH WE ACCEPT. IN THE OPEN COURT AFTER THE HEARING CONCLUDED , WE HAD IN FACT MADE AN OBSERVATION THAT THE LD. CIT(A)S ORDER IS BEING SET - ASIDE AND THE MATTER WOULD BE RESTORED BACK TO THE AO FOR FRESH ADJUDICAT ION. HOWEVER, SINCE VIDE ORDER DT. 03 - 06 - 2019 WE HAD SET ASIDE THE ORDER OF THE LD. CIT(A) BACK TO HIS FILE WITHOUT TAKING INTO CONSIDERATION THE LOG BOOK, WE ARE INCLINED TO CORRECT THE MISTAKE AS APPARENT ON RECORD (OF OUR ORDER DT. 03 - 06 - 2019) AND TH E MATTER NEEDS TO BE RESTORED BACK TO THE AO FOR DENEVO ASSESSMENT SINCE THE ASSESSEE DID NOT GET PROPER OPPORTUNITY BEFORE THE AO. FOR DOING THAT WE RELY ON THE DECISION OF 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 READS THUS : 4 MA. NO. 142/KOL/2019 M/S. EXCELSIOR SERVICES P.LTD. WE WILL STRAIGHTAWAY AGREE WI TH 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. 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 AS IDE. 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 . THEREFORE, FOR THE REASONS SET OUT SUPRA AND IN TH E LIGHT OF THE HONBLE S UPREME C OURT S ORDER IN TIN BOX (SUPRA) , WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE AO FOR DENEVO ASSESSMENT AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING H E ARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE THE A.O TO PARTICIPATE IN THE ASSESSMENT PROCEEDING DILIGENTLY. THEREFORE, INSTEAD OF PARA 3 OF THIS TRIBUNAL ORDER DT. 03.06.2019, WHEREIN IT IS HELD AS UNDER: - 3. SINCE THE IMPUGNED ORDER HAS BEEN PASSED EX PARTE WITHOUT GOING INTO THE MERITS OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE APPEAL SHOULD BE DECIDED ON MERITS AFTER HEARING THE ASSESSEE, THEREFORE, WE SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) AND RESTORE THE APPEAL BACK TO THE FILE OF LD. CIT(A) TO A DJUDICATE THE APPEAL AFRESH AND PASS A SPEAKING ORDER AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE THE LD. CIT(A) TO PARTICIPATE IN THE APPELLATE PROCEEDING DILIGENTLY. 5 MA. NO. 142/KOL/2019 M/S. EXCELSIOR SERVICES P.LTD. TO BE READ AS : THEREFORE, FOR THE REASONS SET OUT SUPRA AND IN THE LIGHT OF THE HONBLE SUPREME COURT IN TIN BOX (SUPRA) WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK TO THE AO FOR DENEVO ASSESSMENT AFTER AFFORDING REASONABLE OPPOR TUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE THE A.O TO PARTICIPATE IN THE ASSESSMENT PROCEEDING DILIGENTLY. 7 . IN THE RESULT, THE MISC. APPLICATIONS FILED BY THE ASSESS E E IS ALLOWED . ORDER PRONOUNCED IN T HE OPEN COURT ON 27 SEPT. 201 9 SD/ - SD/ - ARJUN LAL SAINI A.T. VARKEY ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 27 SEP T., 2019 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ ASSESSEE: M/S. EXCELSIOR SERVICES PVT. LTD 89 AJC BOSE ROAD, SAI PLAZA, 5 TH FL., ROOM NO. 501, KOLKATA - 14. 2 RESPONDENT/ REVENUE: THE I.T.O., WARD 9(2) , KOLKATA . 3. CIT, 4. CIT(A), KO LKATA 5. DR, GUWAHATI BENCHES, KOLKATA **PP/SPS TRUE COPY BY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA