AURO SHIKHA VINIMAY PVT. LTD.,KOLKATA vs. I.T.O., CC-4(3), KOLKATA, KOLKATA

Q: Which sections of the Income-tax Act were involved?

Section 132, Section 133A, Section 143(3), Section 153A, Section 144

ITSSA 18/KOL/2023Status: DisposedITAT Kolkata26 May 2023AY 2011-201213 pages

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeals for statistical purposes. The Tribunal noted that the assessment orders were framed under section 143(3)/153A/144. While acknowledging that the assessment orders were ex-parte, the Tribunal found that the service of notices was not proper. The affidavit filed by the assessee's Authorized Representative indicated that e-mail IDs were registered on the Income Tax Portal, but no notices were ever issued or served on these registered e-mails after the initial physical notices in September 2019, which were replied to with requests for adjournment. Following the shift to electronic service of notices due to COVID-19, the Department failed to issue notices on the registered e-mail IDs. Consequently, the orders of the CIT(Appeals) were deemed unsustainable. To avoid multiplicity of proceedings and the need for a remand report from the Assessing Officer, the Tribunal set aside the impugned orders and remitted all proceedings back to the Assessing Officer for fresh adjudication in accordance with the law.

What were the facts?

A batch of 19 appeals were filed by Tirupati Fuels Pvt. Limited, Balaji Coke Industry Pvt. Limited, Auro Shikha Vinimay Pvt. Limited, Ortem Merchants Pvt. Limited, and Coastal Fuel Pvt. Limited against orders of the CIT(Appeals) for assessment years spanning 2007-08 to 2013-14. These appeals stemmed from search and seizure operations conducted on the "Balaji Coke" Group of cases on March 29, 2012, and subsequent dates. The group is involved in manufacturing and trading LAM Coke, Coke, Coal, Steel, and allied products. The Assessing Officer passed assessment orders under section 143(3)/153A/144 on March 23, 2015. The assessees appealed to the CIT(Appeals), who upheld the Assessing Officer's findings in ex-parte orders. The assessees then filed these appeals before the Tribunal.

What were the issues?

1. Whether the orders of the CIT(Appeals) are sustainable when the assessees contend that no notices were sent to their registered e-mail IDs on the Income Tax Portal, as evidenced by an affidavit from their Authorized Representative. The assessee argued that despite having registered their e-mail IDs since 2020, no notices were served electronically, and physical notices were only received twice before the COVID-19 pandemic, after which communication shifted to electronic mode without proper service. The assessee prayed for the impugned orders to be set aside and for the appeals to be decided on merits. 2. Whether the proceedings should be reinstituted at the Assessing Officer's level, as suggested by the Revenue's counsel, given that the assessment orders were also ex-parte. The Revenue's counsel submitted that it would be better to re-examine all details at the Assessing Officer's level.

Which sections of the Income-tax Act were involved?

Section 132,Section 133A,Section 143(3),Section 153A,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ BENCH, KOLKATA

Before: Shri Rajpal Yadav, Vice- & Shri Girish Agrawal

Per Bench:- This is a bunch of 19 (nineteen) appeals filed at the instance of the different assessees against the separate orders of ld. Commissioner of Income Tax (Appeals), Kolkata-21 dated 16.03.2022 for A.Ys. 2009-10, 07-08, 08-09, 2010-11 to 2013-14, dated 20.05.2022 for A.Y. 2007-08, dated 19.05.2022 for A.Y. 2009-10, dated 17.06.2022 for A.Ys. 2010-11 & 2011-12, dated 13.10.2022 for A.Y. 2012-13, dated 18.05.2022 for A.Y. 2010-11, dated 19.05.2022 for A.Y. 2011-12, dated 18.05.2022 for A.Ys. 2012-13 & 2013-14, dated 13.10.2022 for A.Y. 2009-10, dated 19.05.2022 for A.Y. 2010-11 & dated 29.12.2022 for A.Y.2008-09.

The ld. Counsel for the assessees during the course of hearing compiled the details of these appeals in tabular form exhibiting the following information:- Serial No., name of the assessee, assessment year, IT(SS) No., year in which appeals were filed before the Tribunal, Ground No., issues on which additions/disallowances made by the ld. Assessing Officer, amount involved under each Head of grounds of appeal and grounds by the ld. Counsel showing 4

IT(SS))A Nos. 2, 6, 7-22, 33/KOL/2023 A.Ys. : 2009-2010, 2007-08, 2008-09, 2010-11 to 2013-14, 2007-08, 2009-10 to 2012-13, 2010-11 to 2013-14, 2009-2010, 2010-2011, & 2008-2009

Therefore, in order to appreciate these details involved scientifically, we take this chart on the record and made part of this order.

Brief facts of the case are that a search & seizure operation under section 132(1) coupled with the survey operation under section 133A of the Income Tax Act, 1961 were carried out in “Balaji Coke” Group of Cases on 29.03.2012. According to the ld. Assessing Officer, thereafter search and seizure operation on subsequent dates were carried out on various concerns of the Group and at residences of the Directors of those concerns at Kolkata. These operations were carried out at factory premises in Vishakhapatnam, Dhanbad, Uluberia and in Gujarat. The Group is engaged in the business of manufacturing and trading of LAM Coke, Coke, Coal, Steel and allied products. According to the ld. Assessing Officer, during search and survey, various details were found and seized. The jurisdictions over all the assessees were centralized at Kolkata. He passed an assessment order on 23.03.2015 under section 143(3)/153A/144 on the different entities.

IT(SS))A Nos. 2, 6, 7-22, 33/KOL/2023 A.Ys. : 2009-2010, 2007-08, 2008-09, 2010-11 to 2013-14, 2007-08, 2009-10 to 2012-13, 2010-11 to 2013-14, 2009-2010, 2010-2011, & 2008-2009 4. Dissatisfied with their orders passed in the individual cases in each assessment year, assessees carried the matters in appeals before the ld. CIT(Appeals). The ld. CIT(Appeals) concurred with the ld. Assessing Officer in an ex-parte order impugned herein.

Ld. Counsel for the assessee while impugning these orders contended that on the e-mail ID registered with the Income Tax Portal since 2020, no notice has been sent. For buttressing this contention, he filed an affidavit of the ld. Authorized Representative of the assessee, namely Shri Pankaj Baid, who is a practising Advocate. This affidavit reads as under:-

IT(SS))A Nos. 2, 6, 7-22, 33/KOL/2023 A.Ys. : 2009-2010, 2007-08, 2008-09, 2010-11 to 2013-14, 2007-08, 2009-10 to 2012-13, 2010-11 to 2013-14, 2009-2010, 2010-2011, & 2008-2009

IT(SS))A Nos. 2, 6, 7-22, 33/KOL/2023 A.Ys. : 2009-2010, 2007-08, 2008-09, 2010-11 to 2013-14, 2007-08, 2009-10 to 2012-13, 2010-11 to 2013-14, 2009-2010, 2010-2011, & 2008-2009 Therefore, he prayed that the impugned orders be set aside and the ld. 1st Appellate Authority be directed to decide these appeals on merit.

On the other hand, ld. CIT(DR) submitted that assessment orders are also ex-parte orders and, therefore, it is better that if these proceedings are reinstituted at the level of ld. Assessing Officer, who can re-examine all these details.

We have duly considered the rival contentions and gone through the record carefully. A perusal of the assessment record would indicate that assessment orders have been framed under section 143(3)/153A/144. When these assessment orders were framed on 23.03.2015, the meaning and scope of section 153A was in a very dwindling stage. Recently Hon’ble Supreme Court in the case of PCIT-vs.- Maruti Suzuki India Limited (2019) 416 ITR 613 (SC) has adjudicated the scope of section 153A, wherein Hon’ble Supreme Court concurred with various Hon’ble High Courts on one aspect that the income in a searched assessment under section 153A is to be determined on the basis of incriminating material found during the course of search. The assessment orders before us are no doubt ex-parte but they are not passed

Apart from the above, a perusal of the affidavit of the ld. Counsel for the assessees would indicate that after becoming the e-notice mandatory, the e-mail of all these assessees have been registered on the Portal of the Income Tax Department and no notice on these e-mail have ever been issued or served by the Department. It is pertinent to note that the first two notices must be in physical term were replied by the assessees with a request for adjournment. These two notices were around September, 2019 but thereafter in March, 2020 COVID struck up. The Income Tax Department has also started services of notice through Electronic Mode only. The Department has not issued notices on the Registered Mail on the Portal of the Income Tax Department, therefore, there is no proper service upon the assessees. Hence, the orders of the ld. CIT(Appeals) passed on respective appeals of these appellants are not sustainable.

We appreciate the contentions of the ld. D.R. that impugned orders are ex-parte assessment order. For adjudicating these issues on merit, the ld. 1st Appellate Authority would have to call for a remand report from the

IT(SS))A Nos. 2, 6, 7-22, 33/KOL/2023 A.Ys. : 2009-2010, 2007-08, 2008-09, 2010-11 to 2013-14, 2007-08, 2009-10 to 2012-13, 2010-11 to 2013-14, 2009-2010, 2010-2011, & 2008-2009 ld. Assessing Officer and a round of enquiry would commence at the level of ld. Assessing Officer. Thus there will be multiplicity of the proceeding. The ld. 1st Appellate Authority would be dependent upon the remand report of the ld. Assessing Officer, which would be akin to an assessment order because on every item, he has to conduct enquiry and submit a report. In order to avoid this exercise, we deem it appropriate that both the impugned orders are to be set aside and all these proceedings are remitted back to the file of ld. Assessing Officer for fresh adjudication in accordance with law. 10. In the result, all the appeals of different assessees are allowed for statistical purposes.

Order pronounced in the open Court on May 26, 2023.

Sd/- Sd/- (Girish Agrawal) (Rajpal Yadav) Accountant Member Vice-President(KZ) Kolkata, the 26th day of May, 2023

Copies to : (1) Tirupati Fuels Pvt. Limited, 4, Government Place, Delta House, 2nd Floor, Kolkata-700001 (2) Balaji Coke Industry Pvt. Limited, 4, Government Place, Delta House, Kolkata-700001

(4) Ortem Merchants Pvt. Limited, 4, Government Place, Delta House, Kolkata-700001

(5) Coastal Fuel Pvt. Limited, 4, Government Place, Delta House, Kolkata-700001

(6) Income Tax Officer, Central Circle-4(3), Kolkata, Aayakar Bhawan Poorva, 110, Shanti Pally, Kolkata-700107 (7) Commissioner of Income Tax (Appeals), Kolkata-21; (8) Commissioner of Income Tax , (9) The Departmental Representative (10) Guard File TRUE COPY By order

Assistant Registrar Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.

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