M/S. ANOOP TEA CO. PVT. LTD.,KOLKATA vs. DCIT, CC - 4(3), KOLKATA, KOLKATA

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ITSSA 50/KOL/2024Status: DisposedITAT Kolkata23 September 20244 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal, after considering the affidavit filed by the assessee and the ex-parte nature of the CIT(A)'s orders, felt that in the interest of substantive justice, the matters should be remanded back to the file of the CIT(A). The Tribunal directed the CIT(A) to afford the assessee an opportunity of being heard and to consider the case afresh. Specifically, the CIT(A) was instructed to consider the assessee's argument that the orders were not valid in law due to the alleged absence of incriminating material found during the search and seizure operation concerning the impugned issues. The Tribunal allowed the four appeals for statistical purposes, remanding the matters for fresh consideration.

What were the facts?

The assessee, M/s. Anoop Tea Co. Pvt. Ltd., filed appeals against the orders of the CIT(A) for Assessment Years (AYs) 2012-13 and 2014-15 to 2016-17. These appeals arose from search and seizure operations conducted on the Agarwal Group of cases, leading to proceedings under Section 153C of the Income Tax Act, 1961. The Assessing Officer (AO) made additions on account of alleged bogus interest under Section 36(1)(iii) amounting to Rs. 26,662/- and an addition of Rs. 65 lakh under Section 68. The CIT(A) passed ex-parte orders for all assessment years due to the assessee's non-compliance with notices dated 05.01.2024 and 07.03.2024. The assessee contended that non-compliance was due to reasonable cause, including the departure of the person handling taxation matters and the late joining of a new incumbent.

What were the issues?

1. Whether the ex-parte orders passed by the CIT(A) for AYs 2012-13 and 2014-15 to 2016-17 are valid in law, considering the assessee's claim of reasonable cause for non-compliance with notices? Assessee's Contentions: The assessee argued that the non-compliance with the CIT(A)'s notices was due to reasonable cause, as detailed in an affidavit. The reasons included the illness and subsequent departure of the employee responsible for tax matters in January 2024, and the new incumbent joining only in May 2024, preventing the company from being aware of the notices. The assessee requested that these circumstances be construed as 'sufficient cause' for condoning the non-compliance, emphasizing the need for substantial justice. Alternatively, the assessee requested a remand of the matter back to the CIT(A) to present their case properly. The assessee also questioned the validity of the orders, alleging no incriminating material was found during the search and seizure operation pertaining to the impugned issues. Revenue's Contentions: The Department relied on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 153C,Section 36(1)(iii),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘B’ BENCH, KOLKATA

Before: SRI RAJPAL YADAV, VICE- & SRI SANJAY AWASTHI

आयकर अपीलीय अधिकरण कोलकाता 'बी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA श्री राजपाल यादव, उपाध्यक्ष (कोलकाता क्षेत्र) एवं श्री संजय अवस्थी, लेखा सदस्य के समक्ष Before SRI RAJPAL YADAV, VICE-PRESIDENT & SRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.(S.S.)A. Nos.: 47 & 48 to 50/KOL/2024 Assessment Years: 2012-13 & 2014-15 to 2016-17 M/s. Anoop Tea Co. Pvt. Ltd......................................................Appellant [PAN: AACCA 1872 F] Vs. DCIT, CC-4(3), Kolkata..........................................................Respondent Appearances: Assessee represented by: Siddarth Jhajharia, FCA. Department represented by: Abhijit Kundu, CIT DR. Date of concluding the hearing : August 22nd, 2024 Date of pronouncing the order : September 23rd, 2024 ORDER Per Bench: The instant batch of four appeals are filed by the assessee bearing numbers IT(SS)A Nos. 47 & 48 to 50/KOL/2024. In all these appeals, the issue involved is common. Accordingly, these four appeals are being disposed off with this consolidated order. As the issue involved in all these appeals is common, the lead case is being treated as IT(SS)A Nos. 47/KOL/2024 pertaining to AY 2012-13.

I.T.(S.S.)A. Nos.: 47 & 48 to 50/KOL/2024 AYs: 2012-13 & 2014-15 to 2016-17 M/s. Anoop Tea Co. Pvt. Ltd. 1.1. In this case it is recorded that the assessee has filed its return for the present year on 30.09.2013 at ‘NIL’ income. Thereafter, on 25.09.2020 a search and seizure operation was carried out at various premises of Agarwal Group of cases. Proceedings u/s 153C of the Income Tax Act, 1961 (in short the 'Act') were initiated. The Assessing Officer (hereinafter referred to as ld. 'AO') is seen to have made additions on account of alleged bogus interest u/s 36(1)(iii) of the Income Tax Act, 1961 (in short the 'Act') at Rs. 26,662/- and an addition of Rs. 65 lakh u/s 68 of the Act. 1.2. Right at the outset, the ld. AR placed on record an affidavit in all the four cases and for the sake of convenience the affidavit for AY 2012-13 [IT(SS)A Nos. 47/KOL/2024] is being extracted for reference:

“I, Rajesh Agarwal, son of Late Vijay Kumar Agarwal, residing at HB -165, HB Block, Sector - Ill, Salt Lake, Kolkata - 700106, West Bengal, India, being the Director of M/s Anoop Tea Co. Pvt Ltd., (hereinafter referred to as “the Co.”) having Registered Office at P.O. Birpara, Dist. - Jalpaiguri, West Bengal - 735228, India, do hereby solemnly affirm that - 1. That, the Co., have preferred an Appeal before the Hon’ble Income Tax Appellate Tribunal, Kolkata; 2. That the Appeal No. is IT(SS) No. 47/Kol/2024 which is fixed for hearing before the “B” Bench of Hon’ble Income Tax Appellate Tribunal, Kolkata on 22nd August, 2024. 3. That the Appeal is against the order dated 1st May, 2024, passed by the CIT(A) - 27, Kolkata for the Assessment Year 2012-13. 4. The Order has been passed ex-parte by the CIT(A) for non-compliance to his notices dated 5.1.2024 and 7.3.2024. 5. The reasons for non-compliance are as follows- a) The person who looks after the taxation matter of the Co., was not keeping well from middle of December 2023 and left the services in January, 2024. b) The new incumbent joined in May, 2024 and hence the Company could not know about the notices issued by the CIT(A). c) However, such non-compliance to the notices of the CIT(A) was only due to “reasonable cause” as stated above. It is humbly submitted that this Hon’ble Income Tax Appellate Tribunal, at Kolkata, on scrutinising the facts and circumstances in the accompanying

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I.T.(S.S.)A. Nos.: 47 & 48 to 50/KOL/2024 AYs: 2012-13 & 2014-15 to 2016-17 M/s. Anoop Tea Co. Pvt. Ltd. application, may please construe facts and circumstances as "sufficient cause" for non-compliance to the notices issued by the CIT(A). The facts and circumstances elucidated in the accompanying application involves the question of "substantial justice", where the non-compliance, deserves to be condoned in the overall interest of justice. On the other hand if condoning the condonation of non-compliance is being denied it would seriously undermine the cause of justice, resulting into miscarriage of justice for the appellant.” 1.3. The ld. AR pointed out that they have requested the Income Tax Department for providing documents pertaining to satisfaction etc. recorded prior to initiation of impugned proceedings. Alternatively, the ld. AR requested that in the light of contents of the affidavit (supra), it may be considered for remanding back the matter to the file of the Commissioner of Income Tax (Appeals) [hereinafter referred to as ld. 'CIT(A)'] for an opportunity to present the case before him in a proper manner. The ld. AR also read out para 5 of the affidavit (supra) and elaborated on the reasons for not being able to pursue the matter before the ld. CIT(A). 1.4. The ld. DR relied on the orders of the authorities below. 2. We have carefully gone through the contents of the affidavit and the impugned order in which it has been briefly mentioned in para 4 at page 3 that fresh notices issued on 05.01.2024 07.03.2024 were not responded to by the assessee. It is seen that the ld. CIT(A) thereafter proceeded to uphold the action of ld. AO in an ex-parte manner. After a perusal of the orders of the authorities below and the averments of the ld. AR it is felt that in the interest of substantive justice these four matters need to be remanded back to the file of ld. CIT(A) for considering the case after affording an opportunity of being heard to the assessee. It is also directed that the ld. CIT(A) would consider the lead argument of the appellant that the four orders were not valid in the eyes of law as allegedly there was no incriminating material found during the course of search and seizure operation pertaining to the impugned issues. With these remarks and considering the affidavit filed, we hereby remand this matter back to the file of ld. CIT(A) for consideration afresh.

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I.T.(S.S.)A. Nos.: 47 & 48 to 50/KOL/2024 AYs: 2012-13 & 2014-15 to 2016-17 M/s. Anoop Tea Co. Pvt. Ltd. 3. In the result, the four appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open Court on 23rd September, 2024. Sd/- Sd/- [Rajpal Yadav] [Sanjay Awasthi] Vice President Accountant Member Dated: 23.09.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. M/s. Anoop Tea Co. Pvt. Ltd., C/o. M/s. Salarpuria Jajodia & Co., 7, C.R. Avenue, 3rd Floor, Kolkata, West Bengal, 700072. 2. DCIT, CC-4(3), Kolkata. 3. CIT(A)-27, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order

Assistant Registrar ITAT, Kolkata Benches Kolkata

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