M/s. Canary Tradecom Private Limited, Kolkata V. ITO, Ward - 6(1), Kolkata

MA 4/KOL/2019

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5397 (ITAT-KOLKATA)
• Duration Of Justice: 21 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 04-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Opportunity of being heard
• Section: 142(1); 131; 68; 263

Judgement Text

M.A. NO. 4/KOL/2019 (IN ITA NO. 1725/KOL/2017) & ITA NO. 1725/KOL/2017 A.Y. 2010-2011 M/S. CANARY TRADECOM PVT. LIMITED 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER M.A. NO. 4/KOL/2019 (ARISING OUT OF I.T.A. NO. 1725/KOL/2017) ASSESSMENT YEAR: 2010-2011 & I.T.A. NO. 1725/KOL/2017 ASSESSMENT YEAR: 2010-2011 M/S. CANARY TRADECOM PVT. LIMITED,................. ........APPLICANT/APPELLANT 4, FAIRLIE PLACE, 5 TH FLOOR, KOLKATA-700 001 [PAN:AADCC 5614 N ] -VS.- INCOME TAX OFFICER,................................ .............................RESPONDENT WARD-6(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 APPEARANCES BY: SHRI A.K. TIBREWAL, FCA, FOR THE APPLICANT/ASSESSEE SHRI SHANKAR KUMAR HALDER, SR. D.R. , FOR THE RESPONDENT/DEPARTMENT DATE OF CONCLUDING THE HEARING : JANUARY 25, 2019 DATE OF PRONOUNCING THE ORDER : JANUARY 25, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ):- BY THIS MISCELLANEOUS APPLICATION, THE ASSESSEE HAS SOUGHT THE RE- CALL OF THE ORDER OF THE TRIBUNAL DATED 21.08.2018 PASSED EX-PARTE DISMISSING THE APPEAL OF THE ASSESSEE FOR NON-PROSE CUTION ON THE GROUND THAT THE NOTICE FIXING THE APPEAL OF THE ASSESSEE F OR HEARING BEFORE THE TRIBUNAL ON 30.07.2018 WAS NEVER RECEIVED BY THE AS SESSEE AND, THEREFORE, THE NECESSARY ARRANGEMENTS FOR PROPER RE PRESENTATION OF ITS APPEAL COULD NOT BE MADE BY THE ASSESSEE. KEEPING I N VIEW THIS REASON GIVEN BY THE ASSESSEE, WHICH IS DULY SUPPORTED BY A N AFFIDAVIT OF THE DIRECTOR OF THE ASSESSEE-COMPANY, WE ARE SATISFIED THAT THERE WAS A M.A. NO. 4/KOL/2019 (IN ITA NO. 1725/KOL/2017) & ITA NO. 1725/KOL/2017 A.Y. 2010-2011 M/S. CANARY TRADECOM PVT. LIMITED 2 SUFFICIENT CAUSE FOR THE NON-APPEARANCE OF THE ASSE SSEE BEFORE THE TRIBUNAL ON 30.07.2018 WHEN ITS APPEAL WAS FIXED FO R HEARING. WE ACCORDINGLY RE-CALL THE EX-PARTE ORDER DATED 21.08. 2018 PASSED BY THE TRIBUNAL DISMISSING THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION KEEPING IN VIEW THE PROVISO TO RULE 24 OF THE APPEL LATE TRIBUNAL RULES, 1963 AND RESTORE THE APPEAL OF THE ASSESSEE AT ITS ORIGINAL NUMBER. 2. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH THE SIDES AT THE TIME OF HEARING OF THE MISCELLANEOUS APPLICATION FILED BY T HE ASSESSEE, THE RESTORED APPEAL OF THE ASSESSEE BEING ITA NO. 1725/ KOL/2017 INVOLVING A SHORT POINT CAN ALSO BE HEARD AND DISPOSED OF IMMED IATELY. ACCORDINGLY THEY HAVE TAKEN THE NOTICE OF SUCH HEARING AND THE APPEAL OF THE ASSESSEE BEING ITA NO. 1725/KOL/2017 HAS BEEN HEARD. 3. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH IS APPEAL ARE THAT THE ASSESSEE IS A COMPANY, WHICH IS ENGAGED IN THE BUSI NESS OF RENDERING ACCOUNTING SERVICES AND INVESTMENT IN SHARES. IN TH E ASSESSMENT ORIGINALLY COMPLETED UNDER SECTION 147/143(3) VIDE AN ORDER DATED 21.12.2011, THE TOTAL INCOME OF THE ASSESSEE WAS DE TERMINED BY THE ASSESSING OFFICER AT RS.44,170/-. THE SAID ASSESSME NT WAS SUBSEQUENTLY SET ASIDE BY THE CONCERNED LD. CIT VIDE AN ORDER DA TED 11.03.2014 PASSED UNDER SECTION 263 WITH A DIRECTION TO THE ASSESSING OFFICER TO MAKE THE ASSESSMENT AFRESH AS PER THE FOLLOWING DIRECTION:- EXAMINE THE GENUINENESS AND SOURCE OF SHARE CAPITAL, NOT ON A TEST CHECK BASIS, BUT IN RESPECT OF EACH AND EVERY SHAREHOLDER BY CONDUCTING INDEPENDENT ENQUIRY NOT THROUGH THE ASSESSEE. THE BANK ACCOUNT FOR THE ENTIRE PERIOD SHOULD BE EXAMINED IN THE COURSE OF VERIFICATION TO FIND OUT THE MONEY TRAIL OF THE SHARE CAPITAL. FURTHER THE AO SHOULD EXAMINE THE DIRECTORS AS WELL AS EXAMINE THE CIRCUMSTANCES WHICH M.A. NO. 4/KOL/2019 (IN ITA NO. 1725/KOL/2017) & ITA NO. 1725/KOL/2017 A.Y. 2010-2011 M/S. CANARY TRADECOM PVT. LIMITED 3 NECESSITATED THE CHANGE IN DIRECTORSHIP IF APPLICABLE. HE SHOULD EXAMINE THEM ON OATH TO VERIFY THEIR CREDENTIALS AS DIRECTOR AND REACH A LOGICAL CONCLUSION REGARDING THE CONTROLLING INTEREST. THE AO IS DIRECTED EXAMINE THE SOURCE OF REALIZATION FROM THE LIQUIDATION OF ASSETS SHOWN IN THE BALANCE SHEET AFTER THE CHANGE OF DIRECTORS, IF ANY. 4. IN PURSUANCE OF THE ORDER PASSED BY THE LD. CIT UNDER SECTION 263, NOTICES UNDER SECTION 142(1) WERE ISSUED BY THE ASS ESSING OFFICER TO THE ASSESSEE. THE SAID NOTICES, HOWEVER, REMAINED UN-CO MPLIED WITH BY THE ASSESSEE. THE SUMMONS ISSUED BY THE ASSESSING OFFIC ER UNDER SECTION 131 TO THE SHARE SUBSCRIBER COMPANIES ALSO FAILED TO IN VOKE ANY POSITIVE RESPONSE. THE ASSESSING OFFICER, THEREFORE, PROCEED ED TO COMPLETE THE ASSESSMENT TO THE BEST OF HIS JUDGMENT UNDER SECTIO N 144/263/147/143(3) OF THE ACT. IN THE ASSESSMENT SO COMPLETED VIDE AN ORDER DATED 10.03.2015, AN ADDITION OF RS.8,44,80,0 00/- WAS MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESS EE UNDER SECTION 68 BY TREATING THE ENTIRE SHARE CAPITAL AND SHARE PREMIUM RECEIVED BY THE ASSESSEE-COMPANY DURING THE YEAR UNDER CONSIDERATIO N AS UNEXPLAINED CASH CREDIT. 5. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 144/263/147/143(3) OF THE ACT, AN APPEAL WAS PREFER RED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND SINCE THERE WAS NO SATISFACTORY COMPLIANCE ON THE PART OF THE ASSESSEE TO THE NOTIC ES ISSUED BY THE LD. CIT(APPEALS) FIXING THE SAID APPEAL FOR HEARING FRO M TIME TO TIME, THE LD. CIT(APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE V IDE HIS APPELLATE ORDER DATED 25.04.2017 PASSED EX-PARTE. AGGRIEVED B Y THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEA L BEFORE THE TRIBUNAL. M.A. NO. 4/KOL/2019 (IN ITA NO. 1725/KOL/2017) & ITA NO. 1725/KOL/2017 A.Y. 2010-2011 M/S. CANARY TRADECOM PVT. LIMITED 4 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN SUPPORT O F THE PRELIMINARY ISSUE RAISED IN THE APPEAL OF THE ASSESSEE CHALLENGING TH E IMPUGNED ORDER PASSED BY THE LD. CIT(APPEALS) EX-PARTE, THE LD. CO UNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE BUSINESS OF THE ASSESSEE-COM PANY HAVING BEEN VIRTUALLY CLOSED AT THE RELEVANT TIME, THE NOTICES OF HEARING SENT BY THE LD. CIT(APPEALS) FIXING THE HEARINGS ON 23.02.2017, 16. 03.2017 AND 25.03.2017 WERE NEVER RECEIVED BY THE ASSESSEE AND NONE, THEREFORE, COULD APPEAR BEFORE THE LD. CIT(APPEALS) ON BEHALF OF THE ASSESSEE AT THE TIME OF THE SAID HEARINGS. HE HAS CONTENDED THAT TH E MATTER MAY, THEREFORE, BE REMITTED BACK TO THE LD. CIT(APPEALS) TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD. HE HAS ALSO UNDERTAKEN THAT IF THE MATTER IS REMITTED BACK TO THE LD. CIT(APPEALS) FOR GIVING SUCH OPPORTUNITY TO THE ASSESSEE, HE WILL FILE A LETTER BEFORE THE LD. CIT(APPEALS) GIVING HIS ADDRESS FOR THE PURPOSE OF SENDING THE NOTICES OF HEARING SO THAT THEY CAN BE PROPERTY COMPLIED WITH. KEEPING IN VIEW ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE INC LINED TO ACCEPT THIS CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. EVE N THE LD. D.R. HAS NOT RAISED ANY OBJECTION FOR SENDING THE MATTER BACK TO THE LD. CIT(APPEALS). THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) PASSED E X-PARTE IS ACCORDINGLY SET ASIDE AND THE MATTER IS REMITTED BACK TO HIM FO R DISPOSING OF THE APPEAL OF THE ASSESSEE AFRESH AFTER GIVING ONE MORE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION OF THE ASSESSEE IS ALLOWED, WHILE THE APPEAL OF THE ASSESSEE IS TREATE D AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON JANUARY 25, 2 019. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 25 TH DAY OF JANUARY, 2019 M.A. NO. 4/KOL/2019 (IN ITA NO. 1725/KOL/2017) & ITA NO. 1725/KOL/2017 A.Y. 2010-2011 M/S. CANARY TRADECOM PVT. LIMITED 5 COPIES TO : (1) M/S. CANARY TRADECOM PVT. LIMITED, 4, FAIRLIE PLACE, 5 TH FLOOR, KOLKATA-700 001 (2) INCOME TAX OFFICER, WARD-6(1), KOLKATA, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 (3) COMMISSIONER OF INCOME TAX (APPEALS)-23, KOLKA TA, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.